- Revenue up 3.9% to
$2.1 billion , all organic growth - Net income of
$44.7 million and GAAP EPS of$0.70 , up 16% and 21%, respectively, includes certain discrete tax benefits of$4.4 million , or$0.07 per share - Adjusted EBITDA of
$116.7 million , down 5% - Adjusted EPS of
$0.86 , up 9% - Raises outlook for fiscal year 2024 adjusted EPS to
$3.30 to$3.45 , up from$3.20 to$3.40 (1)
“ABM is off to an excellent start in 2024, generating revenue growth of 3.9%,” said
“We are raising the outlook for full year adjusted EPS based on our overall first quarter results, which included the recognition of certain discrete tax benefits, further supported by the resilience of B&I and solid revenue growth across the rest of our segments. As such, we now expect full year adjusted EPS to be in the range of
(1) When the company provides expectations for adjusted EPS on a forward-looking basis, a reconciliation of the differences between these non-GAAP expectations and the corresponding GAAP measure generally is not available without unreasonable effort. See “Outlook” and “Use of Non-GAAP Financial Information” below for additional information.
First Quarter Fiscal 2024 Results
For the first quarter of fiscal 2024, the Company reported revenue of
GAAP net income was
Adjusted net income was
Adjusted EBITDA for the first quarter decreased 5% to
Liquidity & Capital Structure
The Company ended the first quarter with total indebtedness of
Quarterly Cash Dividend
The Company’s Board of Directors declared a cash dividend of
Outlook
Based on solid first quarter results and the recognition of certain discrete tax benefits, ABM is raising its outlook for fiscal year 2024 (“FY24”) adjusted EPS. The Company now expects FY24 adjusted EPS to be in the range of
The Company cannot provide a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures for Adjusted EPS and adjusted EBITDA margin in 2024 without unreasonable effort due to the uncertainty of timing of any gains or losses related to, but not limited to, items such as prior-year self-insurance adjustments, acquisition and integration related costs, legal costs and other settlements, as well as transformation initiative costs. Although we have attempted to estimate the amount of gains and losses of such items for the purpose of explaining the probable significance of these components, this calculation involves a number of unknown variables, resulting in a GAAP range that we believe is too large and variable to be meaningful.
Conference Call Information
ABM will host its quarterly conference call for all interested parties on
A supplemental presentation will accompany the webcast on the Company's website.
A replay will be available approximately two hours after the webcast through
About ABM
ABM (NYSE: ABM) is one of the world’s largest providers of integrated facility solutions. A driving force for a cleaner, healthier, and more sustainable world, ABM provides essential services and forward-looking solutions that improve the spaces and places that matter most. From curbside to rooftop, ABM provides comprehensive facility services that includes janitorial, engineering, parking, electrical & lighting, energy solutions, HVAC & mechanical, landscape & turf, and mission critical solutions. ABM delivers these custom facility solutions to properties across a wide range of industries – from commercial office buildings to universities, airports, hospitals, data centers, manufacturing plants and distribution centers, entertainment venues and more. Founded in 1909, ABM serves over 20,000 clients, with annualized revenue of over
Cautionary Statement under the Private Securities Litigation Reform Act of 1995
This press release contains both historical and forward-looking statements about
Use of Non-GAAP Financial Information
To supplement ABM’s consolidated financial information, the Company has presented net income and net income per diluted share as adjusted for items impacting comparability for the first quarter of fiscal years 2024 and 2023. These adjustments have been made with the intent of providing financial measures that give management and investors a better understanding of the underlying operational results and trends as well as ABM’s operational performance. In addition, the Company has presented earnings before interest, taxes, depreciation and amortization, and excluding items impacting comparability (adjusted EBITDA) for the first quarter of fiscal years 2024 and 2023. Adjusted EBITDA is among the indicators management uses as a basis for planning and forecasting future periods. Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue excluding management reimbursement. We cannot provide a reconciliation of forward-looking non-GAAP adjusted EBITDA margin measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. The Company has also presented Free Cash Flow which is defined as net cash provided by (used in) operating activities less additions to property, plant and equipment. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for financial statements prepared in accordance with accounting principles generally accepted in
We round amounts to millions but calculate all percentages and per-share data from the underlying whole-dollar amounts. As a result, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Unless otherwise noted, all references to years are to our fiscal year, which ends on
Contact: | |
Investor Relations: | |
(212) 297-9721 | |
ir@abm.com |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED) | |||||||||||
Three months ended | |||||||||||
(in millions, except per share amounts) | 2024 | 2023 | Increase / (Decrease) | ||||||||
Revenues | $ | 2,069.6 | $ | 1,991.3 | 3.9 | % | |||||
Operating expenses | 1,826.3 | 1,749.8 | 4.4 | % | |||||||
Selling, general and administrative expenses | 154.6 | 150.6 | 2.7 | % | |||||||
Amortization of intangible assets | 14.6 | 19.5 | (24.8 | )% | |||||||
Operating profit | 74.1 | 71.4 | 3.7 | % | |||||||
Income from unconsolidated affiliates | 1.3 | 1.1 | 16.4 | % | |||||||
Interest expense | (21.3 | ) | (19.8 | ) | (7.6 | )% | |||||
Income before income taxes | 54.0 | 52.7 | 2.5 | % | |||||||
Income tax provision | (9.3 | ) | (14.2 | ) | 34.4 | % | |||||
Net income | $ | 44.7 | $ | 38.5 | 16.1 | % | |||||
Net income per common share | |||||||||||
Basic | $ | 0.70 | $ | 0.58 | 20.7 | % | |||||
Diluted | $ | 0.70 | $ | 0.58 | 20.7 | % | |||||
Weighted-average common and common equivalent shares outstanding | |||||||||||
Basic | 63.5 | 66.3 | |||||||||
Diluted | 63.9 | 66.8 | |||||||||
Dividends declared per common share | $ | 0.225 | $ | 0.220 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES SELECTED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED) | ||||||||
Three months ended | ||||||||
(in millions) | 2024 | 2023 | ||||||
Net cash used in operating activities (a) | $ | (0.1 | ) | $ | (70.9 | ) | ||
Additions to property, plant and equipment | (13.6 | ) | (13.8 | ) | ||||
Other | 0.5 | 1.3 | ||||||
Net cash used in investing activities | $ | (13.1 | ) | $ | (12.5 | ) | ||
Taxes withheld from issuance of share-based compensation awards, net | (9.5 | ) | (12.7 | ) | ||||
Dividends paid | (14.1 | ) | (14.4 | ) | ||||
Borrowings from debt | 301.0 | 264.5 | ||||||
Repayment of borrowings from debt | (284.1 | ) | (147.6 | ) | ||||
Changes in book cash overdrafts | 8.2 | 6.8 | ||||||
Financing of energy savings performance contracts | — | 0.4 | ||||||
Repayment of finance lease obligations | (1.0 | ) | (0.8 | ) | ||||
Net cash provided by financing activities | $ | 0.5 | $ | 96.2 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1.2 | 2.2 |
(a) The three months ended
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED) | ||||||
(in millions) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 58.0 | $ | 69.5 | ||
Trade accounts receivable, net of allowances | 1,382.0 | 1,365.0 | ||||
Costs incurred in excess of amounts billed | 120.4 | 139.2 | ||||
Prepaid expenses | 92.6 | 78.5 | ||||
Other current assets | 70.9 | 58.6 | ||||
Total current assets | 1,723.9 | 1,710.7 | ||||
Other investments | 28.3 | 28.8 | ||||
Property, plant and equipment, net of accumulated depreciation | 142.1 | 131.5 | ||||
Right-of-use assets | 109.0 | 113.4 | ||||
Other intangible assets, net of accumulated amortization | 288.5 | 302.9 | ||||
2,494.3 | 2,491.3 | |||||
Other noncurrent assets | 169.3 | 155.0 | ||||
Total assets | $ | 4,955.4 | $ | 4,933.7 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities | ||||||
Current portion of long-term debt, net | $ | 31.6 | $ | 31.5 | ||
Trade accounts payable | 243.5 | 299.1 | ||||
Accrued compensation | 201.6 | 249.7 | ||||
Accrued taxes—other than income | 62.0 | 58.9 | ||||
Deferred revenue | 104.6 | 90.1 | ||||
Insurance claims | 190.5 | 177.0 | ||||
Income taxes payable | 19.9 | 17.9 | ||||
Current portion of lease liabilities | 30.4 | 32.5 | ||||
Other accrued liabilities | 281.3 | 261.2 | ||||
Total current liabilities | 1,165.3 | 1,217.9 | ||||
Long-term debt, net | 1,296.9 | 1,279.8 | ||||
Long-term lease liabilities | 95.9 | 98.8 | ||||
Deferred income tax liability, net | 84.5 | 85.0 | ||||
Noncurrent insurance claims | 417.4 | 387.5 | ||||
Other noncurrent liabilities | 69.0 | 61.1 | ||||
Noncurrent income taxes payable | 3.8 | 3.7 | ||||
Total liabilities | 3,132.7 | 3,133.8 | ||||
Total stockholders’ equity | 1,822.7 | 1,799.9 | ||||
Total liabilities and stockholders’ equity | $ | 4,955.4 | $ | 4,933.7 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED) | |||||||||||
Three months ended | Increase/ (Decrease) | ||||||||||
(in millions) | 2024 | 2023 | |||||||||
Revenues | |||||||||||
Business & Industry | $ | 1,033.1 | $ | 1,036.6 | (0.3 | )% | |||||
Manufacturing & Distribution | 400.9 | 380.5 | 5.4 | % | |||||||
Education | 220.1 | 214.9 | 2.4 | % | |||||||
Aviation | 249.5 | 212.3 | 17.5 | % | |||||||
Technical Solutions | 165.9 | 147.0 | 12.9 | % | |||||||
Total Revenues | $ | 2,069.6 | $ | 1,991.3 | 3.9 | % | |||||
Operating profit | |||||||||||
Business & Industry | $ | 79.6 | $ | 75.9 | 4.8 | % | |||||
Manufacturing & Distribution | 41.3 | 40.9 | 1.1 | % | |||||||
Education | 12.7 | 11.8 | 7.6 | % | |||||||
Aviation | 9.7 | 8.3 | 17.4 | % | |||||||
Technical Solutions | 6.6 | 7.2 | (8.8 | )% | |||||||
Corporate | (74.7 | ) | (71.5 | ) | (4.4 | )% | |||||
Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions | (1.3 | ) | (1.1 | ) | (16.4 | )% | |||||
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | — | (0.1 | ) | NM* | |||||||
Total operating profit | 74.1 | 71.4 | 3.7 | % | |||||||
Income from unconsolidated affiliates | 1.3 | 1.1 | 16.4 | % | |||||||
Interest expense | (21.3 | ) | (19.8 | ) | (7.6 | )% | |||||
Income before income taxes | 54.0 | 52.7 | 2.5 | % | |||||||
Income tax provision | (9.3 | ) | (14.2 | ) | 34.4 | % | |||||
Net income | $ | 44.7 | $ | 38.5 | 16.1 | % |
*Not meaningful (due to variance greater than or equal to +/-100%)
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (in millions, except per share amounts) | ||||||
Three months ended | ||||||
2024 | 2023 | |||||
Reconciliation of Net Income to Adjusted Net Income | ||||||
Net income | $ | 44.7 | $ | 38.5 | ||
Items impacting comparability(a) | ||||||
Prior year self-insurance adjustment(b) | 5.3 | — | ||||
Acquisition and integration related costs(c) | 1.4 | 2.5 | ||||
Transformation initiative costs(d) | 7.0 | 17.2 | ||||
Other | 0.8 | — | ||||
Total items impacting comparability | 14.5 | 19.7 | ||||
Income tax benefit (e)(f) | (4.4 | ) | (5.5 | ) | ||
Items impacting comparability, net of taxes | 10.1 | 14.2 | ||||
Adjusted net income | $ | 54.8 | $ | 52.7 |
Three months ended | ||||||
2024 | 2023 | |||||
Reconciliation of Net Income to Adjusted EBITDA | ||||||
Net income | $ | 44.7 | $ | 38.5 | ||
Items impacting comparability | 14.5 | 19.7 | ||||
Income tax provision | 9.3 | 14.2 | ||||
Interest expense | 21.3 | 19.8 | ||||
Depreciation and amortization | 26.9 | 30.5 | ||||
Adjusted EBITDA | $ | 116.7 | $ | 122.7 | ||
Net income margin as a % of revenues | 2.2 | % | 1.9 | % |
Three months ended | ||||||
2024 | 2023 | |||||
Revenues Excluding Management Reimbursement | ||||||
Revenues | $ | 2,069.6 | $ | 1,991.3 | ||
Management reimbursement | (80.1 | ) | (72.4 | ) | ||
Revenues excluding management reimbursement | $ | 1,989.5 | $ | 1,918.8 | ||
Adjusted EBITDA margin as a % of revenues excluding management reimbursement | 5.9 | % | 6.4 | % |
Three months ended | ||||||
2024 | 2023 | |||||
Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share | ||||||
Net income per diluted share | $ | 0.70 | $ | 0.58 | ||
Items impacting comparability, net of taxes | 0.16 | 0.21 | ||||
Adjusted net income per diluted share | $ | 0.86 | $ | 0.79 | ||
Diluted shares | 63.9 | 66.8 |
Three months ended | ||||||
2024 | 2023 | |||||
Reconciliation of | ||||||
Net cash used in operating activities(g) | $ | (0.1 | ) | $ | (70.9 | ) |
Additions to property, plant and equipment | (13.6 | ) | (13.8 | ) | ||
Free Cash Flow | $ | (13.7 | ) | $ | (84.8 | ) |
(a) The Company adjusts income to exclude the impact of certain items that are unusual, non-recurring, or otherwise do not reflect management's views of the underlying operational results and trends of the Company.
(b) Represents the net adjustments to our self-insurance reserve for general liability, workers’ compensation, automobile and medical and dental insurance claims related to prior period accident years. Management believes these prior period reserve changes do not illustrate the performance of the Company’s normal ongoing operations given the current year's insurance expense is estimated by management in conjunction with the Company's outside actuary to take into consideration past history and current costs and regulatory trends. Once the Company develops its best estimate of insurance expense premiums for the year, the Company fully allocates such costs out to the business leaders to hold them accountable for the current year costs within operations. However, since these prior period reserve changes relate to claims that could date back many years, current management has limited ability to influence the ultimate development of the prior year changes. Accordingly, including the prior period reserve changes in the Company's current operational results would not depict how the business is run as the Company holds its management accountable for the current year’s operational performance. The Company believes the exclusion of the self-insurance adjustment from net income is useful to investors by enabling them to better assess our operating performance in the context of current year profitability. For the three months ended
(c) Represents acquisition and integration related costs primarily associated with Able acquisition.
(d) Represents discrete transformational costs that primarily consists of general and administrative costs for developing technological needs and alternatives, project management, testing, training and data conversion, consulting and professional fees for i) new enterprise resource planning system, ii) client facing technology, iii) workforce management tools and iv) data analytics. These costs are not expected to recur beyond the deployment of these initiatives.
(e) The Company's tax impact is calculated using the federal and state statutory rate of 28.11% for FY2024 and FY 2023. We calculate tax from the underlying whole-dollar amounts, as a result, certain amounts may not recalculate based on reported numbers due to rounding.
(f) The three months ended
(g) The three months ended
Source:
2024 GlobeNewswire, Inc., source