ABM Industries (ABM) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

ABM INDUSTRIES ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
Company Achieves 68% Increase in Income From Continuing Operations
Company Raises Fiscal 2005 Guidance

SAN FRANCISCO, CA — September 7, 2005 —ABM Industries Incorporated (NYSE:ABM), a leading facility services contractor in the United States, today reported income from continuing operations for the third quarter of fiscal 2005 was $21.7 million ($0.43 per diluted share), up 68.2%, compared to $12.9 million ($0.25 per diluted share) for the prior year third quarter. Sales and other income for the third quarter of fiscal 2005 were $650.1 million, up 6.1% from $612.8 million in the third quarter of fiscal 2004. Net income for the quarter ended July 31, 2005, which included an after-tax gain of $14.2 million ($0.29 per diluted share) as a result of the previously announced sale of substantially all of the operating assets of CommAir Mechanical Services in the third quarter was $35.9 million ($0.72 per diluted share) compared to $13.1 million ($0.26 per diluted share) for the third quarter of fiscal 2004.

“During the third quarter, we achieved record revenue and quarterly earnings above our previous guidance,” commented Henrik Slipsager, ABM’s president and chief executive officer. “We experienced revenue and operating profit gains in our janitorial, parking, security and engineering segments due to contributions from acquisitions, new customers, and expansion of services with existing customers. In addition, we repurchased nearly 1.4 million shares of stock, bringing the fiscal year-to-date total to 1.6 million shares,” he added.

“We successfully completed the sale of CommAir Mechanical Services during the third quarter, which highlights and reinforces ABM’s strategy of focusing our financial and management resources on the businesses we are confident will grow and contribute to our position as a leading national service provider. We were also pleased with our handling of a labor dispute involving Service Employee union organizing in Houston, Texas. Despite work stoppages at various customer locations around the country, ABM was able to continue operations and provide uninterrupted service to its customers with no loss of business. The labor dispute relating to Houston has now been successfully resolved,” he continued.

The 2005 actuarial report covering substantially all of the Company’s self-insurance reserves was completed in the third quarter of 2005. The report showed favorable developments in the California workers’ compensation and general liability claims, which required the Company to record in the third quarter of 2005 a $9.0 million pre-tax ($5.5 million after-tax or $0.11 per diluted share) benefit from the reduction of the Company’s self-insurance reserve. Of the $9.0 million, $5.5 million ($3.5 million after-tax or $0.07 per diluted share) was attributable to reserves for 2004 and prior years, while $3.5 million ($2.2 million after-tax or $0.04 per diluted share) was a reduction of the insurance provision for the six months of fiscal 2005. The $5.5 million ($3.5 million after-tax or $0.07 per diluted share) was recorded by Corporate, while the $3.5 million ($2.2 million after-tax or $0.04 per diluted share) was allocated to the operating segments.

Mr. Slipsager continued, “I am very pleased that through the efforts of our safety and insurance departments, and in coordination with our service operations, the safety programs we developed

and implemented have now resulted in a reduction of expenses associated with our California workers’ compensation and general liability programs. These reductions will enable us to be more competitive going forward.”

The Company’s income from continuing operations during the first nine months of fiscal 2005 was $39.9 million ($0.79 per diluted share), up 51.5%, compared to $26.3 million ($0.53 per diluted share) for the same period last year. Sales and other income for the nine months ended July 31, 2005 were $1.93 billion, up 9.8%, compared to $1.76 billion for the comparable period last year. Net income, which includes income from discontinued operations, was $54.3 million ($1.08 per diluted share) up 102.6% compared to $26.8 million ($0.54 per diluted share) for the first nine months of 2004.

“Given the current economic climate and our improving operational strength, we are increasing our fiscal 2005 guidance for net income from $1.36 to $1.40 per diluted share. This excludes acquisitions but includes the net effect of higher than anticipated costs related to the first year Sarbanes-Oxley 404 reporting and the expected fourth quarter gain from the sale of one of our parking leases,” Slipsager concluded.

Conference Call
On Thursday, September 8, 2005 at 6:00 a.m. (PDT), 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/05/q3/abm_3q2005.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 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 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 # 9050893.

About ABM Industries
ABM Industries Incorporated is among the largest facility services contractors listed on the New York Stock Exchange. With fiscal 2004 revenues in excess of $2.4 billion and more than 73,000 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, which includes American Commercial Security (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.

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) an adverse internal control evaluation under Section 404 of the Sarbanes-Oxley Act that affects ABM’s stock price; (2) the Company’s significant accounting and other control costs increase; (3) major labor disputes that disrupt business; (4) an increase in costs that the Company cannot pass on to customers; (5) a change in actuarial analysis that

causes an unanticipated change in insurance reserves; (6) a change in the frequency or severity of claims against the Company, a deterioration in claims management, or the cancellation or non-renewal of the Company’s primary insurance policies; (7) low levels of capital investments by customers that impacts project sales of the Lighting segment; (8) intense competition that lowers revenue or reduces margins; (9) a decline in commercial office building occupancy rates lowers sales and profitability; (10) financial difficulties or bankruptcy of a major customer; (11) the loss of long-term customers; (12) weakness in airline travel and the hospitality industry that affects the results of the Company’s Parking segment; (13) acquisition activity slows or is unsuccessful; and (14) 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, the on-going impact of Hurricane Katrina on the United States economy and on the Company’s ability to provide services in the Gulf Coast region, legislation or other governmental action that detrimentally impacts the Company’s expenses or reduces sales by adversely affecting the Company’s customers such as state or locally mandated healthcare benefits, impairment of goodwill and other intangible assets, a reduction or revocation of the Company’s line of credit that increases interest expense and the cost of capital, 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, and inclement weather that disrupts the Company in providing 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 and in other reports it files from time to time with the Securities and Exchange Commission.

# # #

BALANCE SHEET SUMMARY

	July 31,		October 31,
	2005		2004
Assets	(UNAUDITED)
Cash and cash equivalents	$	43,202,000	$	63,369,000
Trade accounts receivable, net		350,938,000		307,237,000
Assets held for sale		—		14,441,000
Other current assets		106,079,000		100,079,000
Total current assets		500,219,000		485,126,000
Goodwill		242,343,000		225,495,000
Other intangibles, net		25,493,000		22,290,000
All other assets		109,299,000		109,613,000
Total assets	$	877,354,000	$	842,524,000
Liabilities
Liabilities held for sale	$	—	$	3,926,000
Other current liabilities		252,941,000		250,502,000
Non-current liabilities		151,726,000		145,935,000
Total liabilities		404,667,000		400,363,000
Stockholders’ Equity		472,687,000		442,161,000
Total liabilities and stockholders’ equity	$	877,354,000	$	842,524,000

SELECTED CASH FLOW INFORMATION (UNAUDITED)

	Three Months Ended July 31,
	2005			2004
Net cash flows from continuing operating activities	$	1,779,000		$	7,464,000
Net operational cash flows from discontinued operations		(690,000	)		(867,000	)
Net Cash Provided By Operating Activities	$	1,089,000		$	6,597,000
Net Cash Provided by (Used In) Investing Activities	$	18,297,000		$	(4,866,000	)
Common stock issued	$	3,662,000		$	1,848,000
Stock buyback		(27,160,000	)		(9,384,000	)
Dividends paid		(5,199,000	)		(4,869,000	)
Net Cash Used In Financing Activities	$	(28,697,000	)	$	(12,405,000	)

	Nine Months Ended July 31,
	2005			2004
Net cash flows from continuing operating activities	$	14,490,000		$	42,233,000
Net operational cash flows from discontinued operations		372,000			(29,810,000	)
Net Cash Provided By Operating Activities	$	14,862,000		$	12,423,000
Net Cash Used In Investing Activities	$	(5,501,000	)	$	(55,702,000	)
Common stock issued	$	17,387,000		$	7,510,000
Stock buyback		(31,318,000	)		(11,073,000	)
Dividends paid		(15,597,000	)		(14,604,000	)
Net Cash Used In Financing Activities	$	(29,528,000	)	$	(18,167,000	)

INCOME STATEMENT (UNAUDITED)

	Three Months Ended July 31,					Increase
	2005			2004		(Decrease)
Revenues
Sales and other income	$	650,140,000		$	612,797,000		6.1	%
Gain on insurance claim		—			—		—
Total revenues		650,140,000			612,797,000		6.1	%
Expenses
Operating expenses and cost of goods sold		570,959,000			547,891,000		4.2	%
Selling, general and administrative expenses		44,417,000			43,683,000		1.7	%
Intangible amortization		1,430,000			1,294,000		10.5	%
Interest expense		220,000			255,000		-13.7	%
Total expenses		617,026,000			593,123,000		4.0	%
Income from continuing operations before income taxes		33,114,000			19,674,000		68.3	%
Income taxes		11,422,000			6,778,000		68.5	%
Income from continuing operations		21,692,000			12,896,000		68.2	%
Income from discontinued operations, net of income taxes		(15,000	)		252,000		—
Gain on sale of discontinued operation, net of income taxes		14,221,000			—		—
Net Income	$	35,898,000		$	13,148,000		173.0	%
Net Income Per Common Share — Basic
Income from continuing operations	$	0.45		$	0.26		73.1	%
Income from discontinued operations		(0.01	)		0.01		—
Gain on sale of discontinued operation		0.29			—		—
	$	0.73		$	0.27		170.4	%
Net Income Per Common Share — Diluted
Income from continuing operations	$	0.43		$	0.25		72.0	%
Income from discontinued operations		—			0.01		—
Gain on sale of discontinued operation		0.29			—		—
	$	0.72		$	0.26		176.9	%
Average Common And Common Equivalent Shares
Basic		49,487,000			48,748,000		1.5	%
Diluted		50,462,000			50,226,000		0.5	%

	Nine Months Ended July 31,				Increase
	2005		2004		(Decrease)
Revenues
Sales and other income	$	1,927,860,000	$	1,755,355,000		9.8	%
Gain on insurance claim		1,195,000		—		—
Total revenues		1,929,055,000		1,755,355,000		9.9	%
Expenses
Operating expenses and cost of goods sold		1,726,542,000		1,585,606,000		8.9	%
Selling, general and administrative expenses		139,455,000		125,240,000		11.4	%
Intangible amortization		4,264,000		3,239,000		31.6	%
Interest expense		713,000		746,000		-4.4	%
Total expenses		1,870,974,000		1,714,831,000		9.1	%
Income from continuing operations before income taxes		58,081,000		40,524,000		43.3	%
Income taxes		18,202,000		14,196,000		28.2	%
Income from continuing operations		39,879,000		26,328,000		51.5	%
Income from discontinued operations, net of income taxes		233,000		495,000		-52.9	%
Gain on sale of discontinued operation, net of income taxes		14,221,000		—		—
Net Income	$	54,333,000	$	26,823,000		102.6	%
Net Income Per Common Share — Basic
Income from continuing operations	$	0.81	$	0.54		50.0	%
Income from discontinued operations		—		0.01		—
Gain on sale of discontinued operation		0.29		—		—
	$	1.10	$	0.55		100.0	%
Net Income Per Common Share — Diluted
Income from continuing operations	$	0.79	$	0.53		49.1	%
Income from discontinued operations		—		0.01		—
Gain on sale of discontinued operation		0.29		—		—
	$	1.08	$	0.54		100.0	%
Average Common And Common Equivalent Shares
Basic		49,470,000		48,658,000		1.7	%
Diluted		50,522,000		50,052,000		0.9	%

SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)

	Three Months Ended July 31,						Increase
	2005			2004			(Decrease)
Sales and Other Income
Janitorial	$	384,381,000		$	367,539,000			4.6	%
Parking		102,767,000			97,856,000			5.0	%
Security		74,702,000			65,012,000			14.9	%
Engineering		60,882,000			54,296,000			12.1	%
Lighting		26,877,000			27,510,000			-2.3	%
Corporate		531,000			584,000			-9.1	%
	$	650,140,000		$	612,797,000			6.1	%
Operating Profit
Janitorial	$	25,165,000		$	17,867,000			40.8	%
Parking		4,079,000			3,458,000			18.0	%
Security		4,302,000			2,594,000			65.8	%
Engineering		4,146,000			3,274,000			26.6	%
Lighting		927,000			442,000			109.7	%
Corporate expenses		(5,285,000	)		(7,706,000	)		-31.4	%
Operating profit from continuing operations		33,334,000			19,929,000			67.3	%
Gain on insurance claim		—			—			—
Interest expense		(220,000	)		(255,000	)		-13.7	%
Income from continuing operations before income taxes	$	33,114,000		$	19,674,000			68.3	%

	Nine Months Ended July 31,						Increase
	2005			2004			(Decrease)
Sales and Other Income
Janitorial	$	1,141,961,000		$	1,073,475,000			6.4	%
Parking		303,073,000			285,384,000			6.2	%
Security		220,465,000			157,986,000			39.5	%
Engineering		176,057,000			154,415,000			14.0	%
Lighting		85,080,000			83,060,000			2.4	%
Corporate		1,224,000			1,035,000			18.3	%
	$	1,927,860,000		$	1,755,355,000			9.8	%
Operating Profit
Janitorial	$	47,795,000		$	41,666,000			14.7	%
Parking		8,915,000			6,269,000			42.2	%
Security		9,756,000			5,787,000			68.6	%
Engineering		10,327,000			8,691,000			18.8	%
Lighting		2,421,000			1,726,000			40.3	%
Corporate expenses		(21,615,000	)		(22,869,000	)		-5.5	%
Operating profit from continuing operations		57,599,000			41,270,000			39.6	%
Gain on insurance claim		1,195,000			—			—
Interest expense		(713,000	)		(746,000	)		-4.4	%
Income from continuing operations before income taxes	$	58,081,000		$	40,524,000			43.3	%

CONTACT:
George B. Sundby
Executive Vice President and
Chief Financial Officer
ABM Industries Incorporated
(415) 733-4000