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NewsBot Date: December 12, 2006 06:36:00 PM
ABM News ABM Industries Announces Fourth Quarter and Fiscal Year 2006 Financial Results
SAN FRANCISCO--(BUSINESS WIRE)--ABM Industries Incorporated (NYSE:ABM), a leading facility
services contractor in the United States, today reported income from
continuing operations for the fourth quarter of fiscal 2006 of $61.6
million ($1.24 per diluted share), compared to $8.5 million ($0.17 per
diluted share) for the prior year fourth quarter. As anticipated,
results for the fourth quarter and fiscal year include $45.1 million
($0.91 per diluted share) from the settlement of the World Trade Center
insurance claims. Sales and other income for the fourth quarter of
fiscal 2006 were $696.7 million, up 5.8% from $658.7 million in the
fourth quarter of fiscal 2005. When the Company’s
income from settlement of the World Trade Center insurance claims and
unusual IT expenses are excluded, the Company’s
“Operating Earnings,”
a non-GAAP financial measure, for the fourth quarter of 2006 were $18.4
million ($0.37 per diluted share) as compared to $8.5 million ($0.17 per
diluted share) in the same quarter of 2005.
“We closed a strong year with solid revenue
growth in the fourth quarter, improved margins in our Janitorial,
Parking, Security and Engineering segments, and cash flow from
operations of nearly $100 million due in large part to the successful
resolution of our World Trade Center insurance claims,”
commented Henrik C. Slipsager, ABM’s president
and chief executive officer. “Our focus and
execution on key strategic initiatives continues to enhance our
competitive position within the facility services industry. As our
customers’ requirements change we must
respond by expanding our capabilities and enhancing our service
platforms. ABM Engineering, which posted another quarter and year of
double digit growth top and bottom line, exemplifies our effort to
respond to market demands.”
The Company reported income from continuing operations during the year
ended October 31, 2006 of $93.2 million ($1.88 per diluted share) on
sales and other income of $2.71 billion, compared to $43.6 million
($0.86 per diluted share) on sales and other income of $2.59 billion for
last year. The increase in income from continuing operations was
primarily due to the $45.1 million for the settlement of World Trade
Center insurance claims and $3.6 million higher benefit from the
reduction of the Company’s self insurance
reserves related to prior years’ insurance
claims. These improvements were partially offset by $2.6 million of
share-based compensation costs as a result of the adoption of Statement
of Financial Accounting Standards (“SFAS”)
No. 123R effective November 1, 2005, and $2.0 million charge related to
the outsourcing of the Company’s information
technology infrastructure and services in October 2006. When the Company’s
income from the settlement of World Trade Center insurance claims and
unusual IT expenses are excluded, operating earnings for fiscal year
2006 were $50.2 million ($1.01 per diluted share), compared with $42.8
million ($0.85 per diluted share) in fiscal year 2005.
A reconciliation of non-GAAP operating earnings for the fourth quarter
and fiscal year ended October 31, 2006 and applicable prior periods is
included in the tables below titled: “Reconciliation
of ABM’s Operating Earnings with Income from
Continuing Operations (GAAP).”
Earnings Guidance
Mr. Slipsager concluded, “In addition to our
business success, our financial position remains very strong. We ended
the year with $134.0 million in cash and cash equivalents, $312.5
million in working capital and no long term debt. For the first time in
ABM’s history, total assets exceeded $1
billion. Given the strength of our balance sheet and our cash flow from
continuing operations, we remain well positioned to continue to expand
our business through a combination of acquisitions and organic growth.
We expect GAAP basis income from continuing operations for fiscal 2007
will be in the range of $1.00 to $1.05 per diluted share. On a non-GAAP
basis, we expect operating earnings for 2007 will be in the range of
$1.10 to $1.15 per diluted share, the difference being our IT
outsourcing initiative.”
Conference Call
On Wednesday, December 13, 2006 at 6:00 a.m. (PST), ABM will host a live
webcast of remarks by President and Chief Executive Officer Henrik C.
Slipsager, and Executive Vice President and Chief Financial Officer
George B. Sundby. The webcast will be accessible at www.irconnect.com/primecast/06/q4/abm_4q2006.html.
Listeners are asked to be online at least fifteen minutes early to
register, as well as to download and install any complimentary audio
software that might be required. Following the call, the webcast will be
available at this URL for a period of three months.
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 800-524-4293 within fifteen minutes before the event. Telephonic
replays will be accessible during the period from two hours to seven
days after the call by dialing 800-642-1687, and then entering ID #
3555439.
ABM Industries Incorporated (NYSE:ABM) is among the largest facility
services contractors listed on the New York Stock Exchange. With fiscal
2006 revenues in excess of $2.7 billion and more than 75,000 employees,
ABM provides janitorial, parking, security, engineering and lighting
services for thousands of commercial, industrial, institutional and
retail facilities in hundreds of cities across the United States and
British Columbia, Canada. The ABM Family of Services includes ABM
Janitorial; Ampco System Parking; ABM Security Services, which includes
American Commercial Security Services (ACSS) and Security Services of
America (SSA); ABM Facility Services; ABM Engineering; and Amtech
Lighting Services.
Cautionary Statement Under the Private Securities Litigation Reform
Act of 1995.
Cautionary Statement Under the Private Securities Litigation Reform
Act of 1995. This press release contains forward-looking statements that
set forth management’s anticipated results
based on management’s plans and assumptions.
Any number of factors could cause the Company’s
actual results to differ materially from those anticipated. These risks
and uncertainties include, but are not limited to: (1) a change in the
frequency or severity of claims against the Company, a deterioration in
claims management,the cancellation or non-renewal of the
Company's primary insurance policies or a change in our customers’
insurance needs; (2) a change in actuarial analysis that causes an
unanticipated change in insurance reserves; (3) inadequate technology
systems that cannot support the growth of the business; (4) acquisition
activity slows or is unsuccessful; (5) labor disputes that lead to a
loss of sales or expense variations; (6) a decline in commercial office
building occupancy and rental rates lowers sales and profitability; (7)
financial difficulties or bankruptcy of a major customer; (8) the loss
of long-term customers; (9) intense competition that lowers revenue or
reduces margins; (10) an increase in costs that the Company cannot pass
on to customers; (11) natural disasters or acts of terrorism that
disrupt the Company in providing services; (12) significant accounting
and other control costs that reduce the Company’s
profitability; and (13) other issues and uncertainties that may include:
new accounting pronouncements or changes in accounting policies, labor
shortages that adversely affect the Company’s
ability to employ entry level personnel, low levels of capital
investments by customers, which tend to be cyclical in nature, that
adversely impact the results of the Company’s
Lighting segment, legislation or other governmental action that
detrimentally impacts the Company’s expenses
or reduces sales by adversely affecting the Company’s
customers, unanticipated adverse jury determinations, judicial rulings
or other developments in litigation to which the Company is subject, a
reduction or revocation of the Company’s line
of credit that increases interest expense and the cost of capital, and
the resignation, termination, death or disability of one or more of the
Company’s key executives that adversely
affects customer retention or day-to-day management of the Company.
Additional information regarding these and other risks and uncertainties
the Company faces is contained in the Company’s
Annual Report on Form 10-K and in other reports it files from time to
time with the Securities and Exchange Commission. The Company undertakes
no obligation to publicly update forward-looking statements, whether as
a result of new information, future events or otherwise.
Use of Non-GAAP Financial Information
To supplement ABM's consolidated condensed financial statements
presented on a GAAP basis, ABM uses operating earnings, a non-GAAP
measure of income from continuing operations that excludes certain
costs, expenses, gains or losses. These adjustments to ABM's GAAP income
from continuing operations are made with the intent of providing both
management and investors a better understanding of the underlying
operational results and trends and ABM's marketplace performance. In
addition, this non-GAAP measure is among the primary indicators
management uses as a basis for planning and forecasting future periods.
The presentation of this additional measure, in the aggregate and on a
per-share basis, is not meant to be considered in isolation or as a
substitute for measures of net income prepared in accordance with
generally accepted accounting principles in the United States.
