EXHIBIT 99.1
ABM INDUSTRIES ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS
Company Achieves 39.1% Increase in Income From
Continuing Operations
SAN FRANCISCO, CA —
June 7, 2005 — ABM Industries Incorporated (NYSE:ABM), a
leading facility services contractor in the United States, today
reported income from continuing operations for the second quarter
of fiscal 2005 was $10.1 million ($0.20 per diluted share), up
39.1%, compared to $7.3 million ($0.15 per diluted share) for
the prior year second quarter. Sales and other income for the
second quarter of fiscal 2005 were $639.6 million, up 10.1%
from $580.9 million in the second quarter of fiscal 2004. Net
income, which includes income from discontinued operations, was
$10.5 million ($0.20 per diluted share) for the second quarter
of fiscal 2005, up 43.2% compared to $7.3 million ($0.15 per
diluted share) for the prior year second quarter. On June 2,
2005, the Company completed the sale of substantially all of the
operating assets of its wholly owned subsidiary, CommAir Mechanical
Services, which was included in discontinued operations. The
Company will realize a pre-tax gain from the sale of CommAir
Mechanical Services of approximately $21.0 million in the
third quarter of fiscal 2005.
“We’re very pleased
with the performance of our business,” commented Henrik
Slipsager, ABM’s president and chief executive officer.
“Quarterly sales reached an all-time high for a second
quarter and, exclusive of one-time items, net income was in line
with previous guidance, despite higher costs associated with
Sarbanes-Oxley compliance.”
Slipsager continued, “The
Company’s sales grew due to contributions from acquisitions,
new customers in all operating segments, and an expansion of
services with existing Janitorial and Engineering customers. Our
Parking, Security, Engineering and Lighting businesses posted
double-digit growth in operating profits. Parking benefited from
new contracts, improvement at airport locations due to increased
air traffic across the country, and the termination of unprofitable
contracts. Profit contributions from SSA, Sentinel, and Amguard
acquisitions enabled Security to achieve year-over-year growth of
37.9% despite absorbing a pre-tax charge of $0.4 million for bad
debt.”
Quarterly income from continuing
operations include a number of one-time items. As previously
announced by the Company, the Janitorial operation recognized a
$6.3 million pre-tax charge, or $3.8 million ($0.08 per
diluted share) after-tax, for amounts awarded to the plaintiff in a
discrimination lawsuit following the Company’s loss on
appeal. The Company has further appealed to the Washington Supreme
Court. Substantially offsetting this charge, the Company recognized
a $2.7 million ($0.05 per diluted share) income tax benefit from
the settlement of prior year state tax audits and recorded a
$1.2 million pre-tax gain, or $0.7 million ($0.01 per
diluted share) after-tax, related to indemnity payments received on
the Company’s World Trade Center insurance.
The second quarter of fiscal 2005
had one fewer workday than the comparable period in fiscal 2004,
resulting in an after-tax benefit of $1.4 million ($0.03 per
diluted share) on contracts with
variable labor cost but fixed
monthly pricing. On a fiscal year-to-date basis, workdays were the
same as the comparable prior year period.
The Company’s income from
continuing operations during the first six months of fiscal 2005
was $18.2 million ($0.36 per diluted share), up 35.4%,
compared to $13.4 million ($0.28 per diluted share) for the
same period last year. Sales and other income for the six months
ended April 30, 2005 were $1.28 billion, up 11.8%,
compared to $1.14 billion for the comparable period last year.
Net income, which includes income from discontinued operations, was
$18.4 million ($0.36 per diluted share) up 34.8% compared to
$13.7 million ($0.28 per diluted share) for the first half of
2004.
“ABM is focusing its
financial and management resources on businesses that contribute to
our position as a leader in the facility services industry,”
Mr. Slipsager continued. “Our financial position remains
very strong. At the end of the second quarter, excluding the
proceeds from the CommAir sale, the Company had over
$52 million in cash and cash equivalents, approximately $246
million in working capital and no debt giving us the base to expand
our existing operations by continuing to execute ABM’s
acquisition strategy.”
Mr. Slipsager concluded,
“Given the current economic climate, our operations are
expected to continue to generally perform at or above our earlier
forecasts. The time and costs associated with the initial
certification of internal controls, as required by Section 404
of Sarbanes-Oxley, is higher than anticipated. Reflecting continued
operational strength and the previously mentioned third-quarter
gain related to the sale of CommAir, we are increasing our fiscal
2005 guidance for net income to $1.17 to $1.23 per diluted
share.”
Conference
Call
Wednesday morning, June 8, 2005 at 6:00 a.m. (PDT), ABM will
host a live webcast of remarks by President & Chief Executive
Officer Henrik C. Slipsager, and Executive Vice President &
Chief Financial Officer George B. Sundby. A webcast of the
conference call will be accessible at
www.irconnect.com/primecast/05/q2/abm_2q2005.html. Listeners are
asked to be online at least 15 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 one year. 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
877/440-9648 within 15 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 #
6676327.
About ABM
Industries
ABM Industries Incorporated is among the largest facility services
contractors listed on the New York Stock E
