Attached files
| file | filename |
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| 8-K - FORM 8-K - ABM INDUSTRIES INC /DE/ | c22129e8vk.htm |
| EX-99.1 - EXHIBIT 99.1 - ABM INDUSTRIES INC /DE/ | c22129exv99w1.htm |
Exhibit 99.2
| Third Quarter 2011 Investor Conference Call September 9, 2011 |
| Agenda 1 Introduction & Overview | Henrik Slipsager, Chief Executive Officer 2 Third Quarter 2011 Financial Review | Jim Lusk, Chief Financial Officer 3 Third Quarter 2011 Review & Outlook | Henrik Slipsager, Chief Executive Officer 4 Questions and Answers Forward-Looking Statements and Non-GAAP Financial Information: Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in the Company's 2010 Annual Report on Form 10-K and in our 2011 reports on Form 10-Q and Form 8-K. These reports are available on our website at http://investor.abm.com/ under "SEC Filings". A description of factors that could cause actual results to differ is also set forth at the end of this presentation. Also, the discussion during this conference call will include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). Reconciliations of those non- GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found on the Investor Relations portion of our website at http://investor.abm.com and at the end of this presentation. |
| Third Quarter 2011 Financial Highlights Revenue from companies acquired in 2010 contributed to 24% year-over-year top-line growth. Janitorial tag revenue up 11% year-over-year Achieved double digit growth in Revenue, Net Income and Adjusted Income from Continuing Operations 20% increase in Adjusted EBITDA Cash flow from continuing operations of $51 million Acquisitions slightly accretive, excluding transaction costs Paid 181st consecutive dividend |
| Results Synthesis - Key Financial Metrics Net Income Net Income of $27.9 million, up 33.0% or $6.9 million . Net income increased primarily as a result of a $4.7 million increase in divisional operating profit driven by the companies acquired in 2010, a $4.7 million discrete tax benefit, and $1.5 million from settling a dispute related to an acquisition. This year- over-year increase in third quarter income was partially offset by higher share-based compensation expenses of $2.2 million and a $1.9 million increase in interest expense. Adjusted EBITDA1 Adjusted EBITDA of $54.9 million was $9.0 million, or 19.7% higher. The year-over-year growth in Adjusted EBITDA for the third quarter of 2011 is the result of an increase of $7.7 million in pre-tax divisional operating profit and $1.2 million of income from unconsolidated affiliates. Cash Flow The increase of $15.8 million was driven primarily by timing of vendor payments 1 Reconciliation of Adjusted Income from Continuing Operations and Adjusted EBITDA can be found in the appendix of this presentation |
| Cash Flow & Select Balance Sheet Information Insurance comparison Comparison of working capital and net trade receivables (In thousands) (In thousands) (In thousands) Cash Flow from Operating Activities (in millions) Days sales outstanding (DSO) for third quarter were 50 days DSO up 1 day year-over-year and up 2 days sequentially |
| Engineering Services & Energy Solutions Q3 2011 Results Synthesis - Revenue1 Revenue up 4.1% Tag revenue up 11% year-over-year Organic revenue of approximately $12 million Revenue up 24%. Third consecutive quarter of revenue surpassing $1 billion Janitorial Services Parking & Shuttle Services Security Services Revenue up 150.3%. Linc acquisition contributed $143 million Revenue up 34.2% L&R acquisition contributed $43 million Revenue up 3.3%. 1Excludes Corporate |
| Q3 2011 Results Synthesis - Operating Profits1 Janitorial operating profit of $40.1 million increased $1.8 million or 4.6% as the segment benefited from higher revenue associated with the Diversco acquisition and new business. Partially offsetting the $1.8 million increase in operating profit was $0.9 million of higher state unemployment insurance costs and an increase of $0.6 million in fuel expense Engineering operating profit increased $3.8 million to $9.9 million or 61.5% resulting from $4.0 million of operating profits associated with the Linc acquisition The 23.1% increase or $1.3 million in Parking's operating profit to $7.2 million was primarily the result of $0.7 million of operating profit associated with L&R Security operating profit was up $0.8 million or nearly 39% primarily from the reduction in general and administrative expenses 1Excludes Corporate |
| Operating Segment Highlights ABM's Linc Government Services one of six companies with opportunity to bid on task orders under a five-year $9.7 billion Department of Defense contract for Language Services Started Integrated Facility Services (IFS) contract for 9/11 Memorial & Museum ABM Energy continued its leadership position in installing of electric vehicle charging stations with recent installations in Southern California ABM Engineering recently awarded an IFS contract for a client in the automotive industry Ampco System Parking awarded Midwest international airport contract |
| Fiscal 2011 Outlook Summary - Q3 Update Maintaining original guidance for Income from Continuing Operations of $1.23 to $1.33 per diluted share and expect to be in lower half of range Revised guidance for Adjusted Income from Continuing Operations for fiscal 2011 to reflect weaker US economy, lower contribution from Federal contracts, higher state unemployment expense, and increases in fuel and related costs Adjusted Income from Continuing Operations of $1.32 to $1.42 per diluted share One additional work day for FY2011; impact of $3.5 million to $4.5 million pre-tax One more work day in Q4; Year-to-date work days are equal on a year-over-year basis Higher leverage ratio and borrowing rates continue to generate significant year-over- year increase in interest expense Expect increase of $11 million to $12 million for the fiscal year Operating cash flow to remain strong but, as originally guided, lower year-over-year OneSource NOL's diminishing. Cash taxes estimated to be approximately $14 million to $18 million Effective tax rate of 37% to 38%, excluding discrete tax items |
| Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements, which address the company's expected business and financial performance, among other matters, contain words such as "believe", "expect", "anticipate," "intend," "plan," "should", "could" and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date that they are made. The Company undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following: risks relating to our acquisition of The Linc Group LLC ("Linc"), including risks relating to reductions in government spending on outsourced services as well as payment delay, may adversely affect a significant portion of revenues generated by government contracts, and political and compliance risks, both domestically and abroad, may adversely affect our operations; our acquisition strategy may adversely impact our results of operations; intense competition can constrain our ability to gain business, as well as our profitability; we are subject to volatility associated with high deductibles for certain insurable risks; an increase in costs that we cannot pass on to clients could affect our profitability; we provide our services pursuant to agreements which are cancelable by either party upon 30 to 90 days' notice; our success depends on our ability to preserve our long-term relationships with clients; we incur significant accounting and other control costs that reduce profitability; a decline in commercial office building occupancy and rental rates could affect our revenues and profitability; deterioration in economic conditions in general could further reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition; financial difficulties or bankruptcy of one or more of our major clients could adversely affect results; we are subject to risks relating to foreign currency fluctuations and foreign exchange exposure; our ability to operate and pay our debt obligations depends upon our access to cash; because we conduct our business through operating subsidiaries, we depend on those entities to generate the funds necessary to meet financial obligations; that portion of our revenues which are generated from international operations are subject to political risks and changes in socio-economic conditions, laws and regulations, including labor, monetary and fiscal policies, which could negatively impact our ability to operate and grow our business in the international arena; future declines or fluctuations in the fair value of our investments in auction rate securities that are deemed other-than-temporarily impaired could negatively impact our earnings; uncertainty in the credit markets and the financial services industry may impact our ability to collect receivables on a timely basis and may negatively impact our cash flow; any future increase in the level of debt or in interest rates can affect our results of operations; an impairment charge could have a material adverse effect on our financial condition and results of operations; we are defendants in several class and representative actions or other lawsuits alleging various claims that could cause us to incur substantial liabilities; since we are an attractive employer for recent emigres to this country and many of our jobs are filled by such, changes in immigration laws or enforcement actions or investigations under such laws could significantly and adversely affect our labor force, operations, financial results and our reputation; labor disputes could lead to loss of revenues or expense variations; federal health care reform legislation may adversely affect our business and results of operations; we participate in multi-employer defined benefit plans which could result in substantial liabilities being incurred; and natural disasters or acts of terrorism could disrupt our services. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report on Form 10-K for the year ended October 31, 2010 and in other reports we file from time to time with the Securities and Exchange Commission. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. |
| Appendix Unaudited Reconciliation of non-GAAP Financial Measures |
| Unaudited Reconciliation of non-GAAP Financial Measures (in thousands) |
| Unaudited Reconciliation of non-GAAP Financial Measures (in thousands, except per share data) |
| Unaudited Reconciliation of non-GAAP Financial Measures (in thousands, except per share data) |