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EX-99.1 - EXHIBIT 99.1 - ABM INDUSTRIES INC /DE/t1600645_ex99-1.htm
8-K - FORM 8-K - ABM INDUSTRIES INC /DE/t1600645_8k.htm

 

Exhibit 99.2

 

Cover Slide Title (20pt. Bold) First Quarter 2016 Teleconference March 9, 2016

 

 

Agenda 2 3 4 Capital Structure Fiscal 2016 Outlook Forward - Looking Statements and Non - GAAP Financial Information: Our discussions during this conference call will include forward - looking statements. Actual results could differ materially fro m those projected in the forward - looking statements. Some of the factors that could cause actual results to differ are discussed in the Company’s 2015 Annual Report on Form 10 - K and in our 2016 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 other 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 wi th U.S. generally accepted accounting principles (“U.S. GAAP”). Reconciliations of those non - GAAP financial measures to the most directly comparable U.S. GAAP financ ial measures can be found on the Investor Relations portion of our website at http://investor.abm.com and at the end of this presentation. 1 ABM Business Overview 2 First Quarter 2016 Review

 

 

First Quarter 2016 Review 3

 

 

Normalized Q1 FY15 Adj. EBITDA Margin Illustrative for comparative purposes 4 * Reflects the sale of Security

 

 

Segment Results 5 Janitorial Services • Revenues of $685.7m, increase of 3.0% y - o - y • Operating profit of $33.7m, de crease of 2.0 % y - o - y Facility Services • Revenues of $158.5m, increase of 1.5% y - o - y • Operating profit of $5.1m, de crease of 13.6% y - o - y Parking • Revenues of $162.0m, increase of 4.0% y - o - y − Management reimbursement revenues of $80.1m, increase of 4.0% y - o - y • Operating profit of $ 5.0 m, de crease of 23.1% y - o - y BESG Other (Air Serv ) • Revenues of $149.8m, increase of 25.5% y - o - y • Operating profit of $6.5m, in crease y - o - y • Revenues of $112.4m, increase of 15.6% y - o - y • Operating profit of $1.7m, de crease of 34.6% y - o - y

 

 

First Quarter 2016 Review 6

 

 

Capital Structure

 

 

Select Cash Flow & Balance Sheet Items Leverage 8 Q1 FY16 Leverage of ~1.9x 2 Note: Acquisitions shown represent purchase above $15m 1 Decrease in FY15 Q4 leverage due to disposition of Security 2 Leverage calculated as total indebtedness / pro - forma adjusted EBITDA Leverage Target 2.5x

 

 

Select Cash Flow & Balance Sheet Items Shareholder Return 9 *Accelerated Q2 FY13 dividend payment in Q1 FY13

 

 

Fiscal 2016 Outlook

 

 

Fiscal 2016 Outlook 11 Metric Amount Adjusted Income from continuing operations per diluted share $1.50 - $1.60 Income from continuing operations per diluted share $1.02 - $1.12 Depreciation & Amortization $56m - $60m Interest Expense $10m - $12m Capital Expenditures $40m - $50m Adjusted EBITDA Margin 3.9% - 4.1% Tax Rate (excluding WOTC) 1 40% - 44% Estimated 2016 Savings H1 2016 - $4m – $6m H2 2016 - $6m - $14m 1. This tax rate excludes the $0.20 impact of the 2015 and 2016 Work Opportunity Tax Credits 2. Fiscal 2016 has one more work day, which the Company anticipates will increase labor expense by approximately $4m on a pre - tax basis 2016 Working Days 2 Quarter Q1 Q2 Q3 Q4 Days 65 65 65 66 Δ y - o - y 0 +1 - 1 +1

 

 

Forward - Looking Statement This presentation contains both historical and forward - looking statements. Forward - looking statements are not based on historica l facts but instead reflect our current expectations, estimates or projections concerning future results or events. These statements generally can be identified by the use of forward - looking word s or phrases such as "believe," "expect," “will,” "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "should," "forecast, or other similar words or phrases. These stat eme nts are not guarantees of future performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to di ffe r materially from those indicated by those statements. Forward - looking statements in this presentation include, but are not limited to, statements regarding the adoption of our 2020 strategy and t ran sformation initiative, statements regarding our future operating and financial performance, our fiscal 2016 guidance, statements regarding the cost savings we have projected to achieve by the re ali gnment of our business operations and statements regarding the timing of any of the foregoing. We cannot assure you that any of our expectations, estimates or projections will be achieved. Numerous fac tors could cause our actual results and events to differ materially from those expressed or implied by forward - looking statements. These factors include, but are not limited to the following: (1) changes to our businesses, operating structure, capital structure, or personnel relating to the implementation of our 2020 Vision strategic transformation initiative may not have the desired effects on our fi nancial condition and results of operations; (2) we have high deductibles for certain insurable risks, and therefore we are subject to volatility associated with those risks, including the possibility th at our risk management and safety programs may not have the intended effect of allowing us to reduce our insurance costs for casualty programs and that our insurance reserves may need to be materially adj ust ed from time to time; (3) our business success depends on our ability to preserve our long - term relationships with clients; (4) our business success depends on retaining senior management and attractin g and retaining qualified personnel; (5) our acquisition strategy may adversely impact our results of operations; (6) our captive insurance company may not generate the benefits that we expect; ( 7) we are subject to intense competition that can constrain our ability to gain business as well as our profitability; (8) increases in costs that we cannot pass on to clients could affect our profitabilit y; (9) we are at risk of losses stemming from accidents or other incidents at facilities in which we operate, which could cause significant damage to our reputation and financial loss; (10) negative or unexpected tax con sequences could adversely affect our results of operations; (11) changes in energy prices and government regulations could adversely impact the results of operations of our Building & Energy Solutions bus iness; (12) significant delays or reductions in appropriations for our government contracts may negatively affect our business and could have an adverse effect on our financial position, results o f o perations, and cash flows; (13) we conduct some of our operations through joint ventures, and our ability to do business may be affected by the failure of our joint venture partners to perform their obl igations; (14) our business may be negatively affected by adverse weather conditions; (15) federal health care reform legislation may adversely affect our business and results of operations; (16) we are subject to business continuity risks associated with centralization of certain administrative functions; (17) our services in areas of military conflict expose us to additional risks; (18) we are subject to cyber - security risks arising out of breaches of security relating to sensitive company, client, and employee information and to the technology that manages our operations and other business processes; (19 ) a decline in commercial office building occupancy and rental rates could affect our revenues and profitability; (20) deterioration in general economic conditions could reduce the demand for facility se rvices and, as a result, reduce our earnings and adversely affect our financial condition; (21) financial difficulties or bankruptcy of one or more of our clients could adversely affect our results; (22) a ny future increase in the level of our debt or in interest rates could affect our results of operations; (23) our ability to operate and pay our debt obligations depends upon our access to cash; (24) goodwill impair men t charges could have a material adverse effect on our financial condition and results of operations; (25) impairment of long - lived assets may adversely affect our operating results; (26) we are defendan ts in class and representative actions and other lawsuits alleging various claims that could cause us to incur substantial liabilities; (27) changes in immigration laws or enforcement actions or inves tig ations under such laws could significantly adversely affect our labor force, operations, and financial results; (28) labor disputes could lead to loss of revenues or expense variations; (29) we particip ate in multiemployer pension plans that under certain circumstances could result in material liabilities being incurred; (30) actions of activist investors could be disruptive and costly and could cause uncert ain ty about the strategic direction of our business; and (31) disasters or acts of terrorism could disrupt services. The list of factors above is illustrative and by no means exhaustive. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report o n F orm 10 - K for the year ended October 31, 2015, and in other reports the Company files from time to time with the Securities and Exchange Commission (the "SEC") (including all amendments to those reports). The Company urges readers to consider these risks and uncertainties in evaluating its forward - looking statements. The Company cautions readers not to place undue reliance upon any su ch forward - looking statements, which speak only as of the date made. The Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward - looking statemen ts contained herein (or elsewhere) to reflect any change in the Company's expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement is made, w het her as a result of new information, future events or otherwise, except as otherwise required by the federal securities laws. 12

 

 

Appendix - Unaudited Reconciliation of non - GAAP Financial Measures

 

 

Unaudited Reconciliation of non - GAAP Financial Measures 14 (a) Represents severance and other costs related to the departure of our former CEO. (b) Represents costs related to the Company’s branding initiative. (c) Includes legal and other cost incurred in connection with an internal investigation into a foreign entity affiliated with a former joi nt venture partner. (d) Includes costs for 2020 Vision Transformation Initiative, net of the reversal of certain share - based compensation costs. ($ in millions)

 

 

Unaudited Reconciliation of non - GAAP Financial Measures 15 (e) Adjusted EBITDA does not include interest income of $0.3 million for certain long term energy contracts, in which case a gros s u p of both interest income and interest expense is being recorded. Thus, interest expense for the three months ended January 31, 2016, is shown n et of interest income of $0.3 million. ($ in millions, except per share amounts)

 

 

2016 Guidance 16