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ABM Industries Announces Second Quarter 2012 Financial Results

ABM (NYSE:ABM), a leading provider of integrated facility solutions, today announced financial results for the fiscal 2012 second quarter that ended April 30, 2012.

 

(in millions,

  Three Months Ended     Six Months Ended  

except per share data)

April 30, Increase April 30, Increase
(unaudited)   2012   2011   (Decrease) 2012   2011   (Decrease)
                       
Revenues   $ 1,057.2   $ 1,060.1   (0.3 )% $ 2,131.0   $ 2,089.3   2.0 %
                       
Income from continuing operations $ 11.7   $ 14.2 (17.6 )% $ 22.4   $ 22.6 (0.9 )%
 
Income from continuing operations per diluted share   $ 0.21   $ 0.26   (19.2 )% $ 0.41   $ 0.42   (2.4 )%
                       
Adjusted income from continuing operations $ 16.3 $ 15.0 8.7 % $ 28.0 $ 26.7 4.9 %
 
Adjusted income from continuing operations per diluted share   $ 0.30   $ 0.28   7.1 % $ 0.51   $ 0.50   2.0 %
                       
Net income $ 11.7 $ 14.2 (17.6 )% $ 22.3 $ 22.6 (1.3 )%
 
Net income per diluted share   $ 0.21   $ 0.26   (19.2 )% $ 0.41   $ 0.42   (2.4 )%
                       
Net cash provided by continuing operating activities   $ 42.6   $ 31.3   36.1 % $ 54.4   $ 31.5   72.7 %
                       
Adjusted EBITDA   $ 40.5   $ 42.0   (3.6 )% $ 76.4   $ 77.7   (1.7 )%
 

(This release refers to non-GAAP financial measures described as “Adjusted EBITDA,” “Adjusted Income from Continuing Operations,” and “Adjusted Income from Continuing Operations per Diluted Share” (or “Adjusted EPS”). Refer to the accompanying financial tables for supplemental financial data and corresponding reconciliation of these non-GAAP financial measures to certain GAAP financial measures.)

 

Highlights of the Company’s fiscal 2012 second quarter include:

  • Revenues were $1.06 billion in the fiscal 2012 second quarter, flat compared to $1.06 billion last year. Longer than anticipated start dates on recently awarded contracts coupled with lower than expected contribution from government business impacted revenue growth.
  • Adjusted income from continuing operations for the fiscal 2012 second quarter was $16.3 million, or $0.30 per diluted share, compared to $15.0 million, or $0.28 per diluted share, in the second quarter of fiscal 2011. The combined decrease in interest and income tax expense of $4.2 million after-tax, offset higher payroll related expenses of $1.7 million after-tax associated with increases in state unemployment insurance rates.
  • Net income was $11.7 million, or $0.21 per diluted share, compared to $14.2 million, or $0.26 per diluted share, in the 2011 second quarter. Net income in fiscal 2012 second quarter includes $3.0 million after-tax charge for certain legal settlements or $0.06 per diluted share.
  • Net cash flow from continuing operations increased $11.3 million, or 36.1%, to $42.6 million in the fiscal 2012 second quarter, compared to $31.3 million last year. Outstanding borrowings under the Company’s credit facility were reduced by $27 million in the quarter.

Second Quarter Results and Recent Events

“Operating results were in line with our expectations with the exception of government and government-related businesses. Adjusted income from continuing operations was up 9% as we maintained our focus on cost control measures and benefited from employment-based tax credits due to our hiring practices,” said ABM’s president and chief executive officer Henrik Slipsager. “Net Income was adversely impacted by legal settlements we made to mitigate long-term risks. We generated revenues from new clients and expanded services to existing clients in the Janitorial and Security segments. Janitorial benefited from client wins in the high-technology sector, although overall the segment was negatively affected by the delayed timing of starting recently signed jobs. New business in Security generated a 6% increase in revenue and along with cost reductions drove a 13% increase in operating profit. Despite lower year-over-year revenues in Parking, we increased margins due to an improved mix of work performed and select cost reductions. Our Facility Solutions segment continues to be impacted by the timing of government contracts and the postponement of the start of existing projects.”

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