EXHIBIT 99.2
For further information, please contact ABM's Senior Vice
President & Chief Financial Officer, George B. Sundby,
at 415/733-4000 (or e-mail gsundby@abm.com).
ABM INDUSTRIES ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
SAN FRANCISCO, June 10, 2003 -- ABM Industries Incorporated (NYSE:ABM) today
reported net income for the quarter ended April 30, 2003 of $9.9 million ($0.20
per diluted share) compared to $14.0 million ($0.27 per diluted share) reported
for the second quarter of fiscal 2002. Revenues for the second quarter of 2003
were $589.8 million, up 11% from $530.2 million in the second quarter of 2002.
The quarter ended April 30, 2002 included a $4.3 million ($2.7 million after
tax, $.05 per diluted share) gain from the receipt of an initial payment from
the World Trade Center insurance claim. Included in the quarter ended April 30,
2003 were revenues and operating profits generated by ABM Lakeside Building
Maintenance, which ABM acquired in July 2002, and the Company's acquisition of
Horizon's self-performed janitorial operations in January 2003.
Net income for the six months ended April 30, 2003 was $14.2 million
($0.29 per diluted share) compared to $22.0 million ($0.43 per diluted share)
reported for the first half of fiscal 2002. Revenues for the first half of 2003
were $1,170.5 million, up 11% from $1,057.7 million in the first half of 2002.
"Given the tough economic environment, our second quarter performance was
solid," said Henrik C. Slipsager, ABM's President and Chief Executive Officer.
"High vacancies in office buildings, the downturn in travel related to SARS and
the Iraqi war,
and customers' continued tightening of budgets that reduced higher margin
capital project work and extra services, all made a difference in our results
today," said Slipsager.
"We are pleased that the changes we implemented to improve the performance
of both our Lighting and Janitorial Northeast Region, which had disappointing
first quarters, are showing positive returns. Furthermore, the integration of
Horizon's self-performed janitorial acquisition is on schedule and we are very
excited about the recently completed acquisition of the southern California
operations of Valet Parking Service," said Slipsager. "Despite this progress, we
anticipate that the difficult economic environment will continue for the
remainder of 2003. We expect 2003 diluted earnings per share to be approximately
$0.85 per share. We are fundamentally well-positioned for internal growth when
the economy improves," he added.
Wednesday morning, June 11, at 6:00 a.m. (Pacific Standard Time), ABM will
host a live webcast of remarks by President & Chief Executive Officer Henrik C.
Slipsager and Senior Vice President & Chief Financial Officer George B. Sundby,
who will also answer questions from a panel of financial analysts who will join
Slipsager and Sundby on the conference call. The webcast will be accessible at
www.irconnect.com/primecast/03/q2/abm_2q2003.mhtml by clicking on ABM at that
site. Listeners are requested 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. The webcast will be archived at this URL for the next
year. In addition to the webcast, a
limited number of toll-free telephone lines will 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 for 48 hours beginning two hours
after the call ends by dialing 800/642-1687, and then entering ID #923689.
ABM Industries Incorporated is one of the largest facility services
contractor listed on the New York Stock Exchange. With fiscal 2002 revenues in
excess of $2.1 billion and more than 62,000 employees, ABM provides janitorial,
parking, engineering, security, lighting, elevator, mechanical and network
services for thousands of commercial, industrial, institutional and retail
facilities in hundreds of cities across North America. The ABM Family of
Services includes ABM Janitorial, Ampco System Parking, ABM Engineering,
American Commercial Security (ACSS), Amtech Lighting, Amtech Elevator, CommAir
Mechanical and ABM Service Network.
SAFE HARBOR STATEMENT
Cautionary Safe Harbor Disclosure for Forward Looking Statements under the
Private Securities Litigation Reform Act of 1995: Because of the factors set
forth below, as well as other variables affecting the Company's operating
results, past financial performance should not be considered a reliable
indicator of future performance, and investors should not use historical trends
to anticipate results or trends in future periods. The statements contained
herein which are not historical facts are forward-looking statements that are
subject to meaningful risks and uncertainties, including but not limited to: (1)
significant decreases in commercial real estate occupancy, resulting in reduced
demand and pricing pressures on building maintenance and other facility services
in the Company's major markets, (2) inability to pass through cost increases in
a timely manner, or at all, or to reduce expenses when sales decline, (3) loss
or bankruptcy of one or more of the Company's major customers, which could
adversely affect the Company's ability to collect its accounts receivable or
recover its deferred costs as well as having an adverse impact on future
revenue, (4) major collective bargaining issues that may cause loss of revenues
or cost increases that non-union competitors can use to their advantage in
gaining market share, (5) significant shortfalls in adding additional customers
in existing and new territories and markets, (6) inability to successfully
integrate acquisitions into
the Company, (7) a protracted slowdown in the Company's acquisition activities,
(8) legislation or other governmental action that severely impacts one or more
of the Company's lines of business, such as price controls that could restrict
price increases, or the unrecovered cost of any universal employer-paid health
insurance, as well as government investigations that adversely affect the
Company, (9) reduction or revocation of the Company's line of credit, which
would increase interest expense or the cost of capital, (10) cancellation or
nonrenewal of the Company's primary insurance policies, as many customers
contract out services based on the contractor's ability to provide adequate
insurance coverage and limits, (11) catastrophic uninsured or underinsured
claims against the Company, the inability of the Company's insurance carriers to
pay otherwise insured claims, or inadequacy in the Company's reserve for
self-insured claims, (12) inability to employ entry level personnel at
competitive wage rates due to labor shortages, (13) resignation, termination,
death or disability of one or more of the Company's key executives, which could
adversely affect customer retention and day-to-day management of the Company,
and (14) other material factors that are disclosed from time to time in the
Company's public filings with the United States Securities and Exchange
Commission, such as reports on Forms 8-K, 10-Q and 10-K.
BALANCE SHEET SUMMARY (UNAUDITED)
APRIL 30, APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
ASSETS
Current assets $441,020,000 $444,112,000 -0.7%
Goodwill 185,540,000 124,465,000 49.1%
All other assets 103,330,000 99,529,000 3.8%
Total assets $729,890,000 $668,106,000 9.2%
LIABILITIES
Current liabilities $246,796,000 $213,272,000 15.7%
Other non-current liabilities 92,626,000 86,111,000 7.6%
Total liabilities $339,422,000 $299,383,000 13.4%
STOCKHOLDERS' EQUITY $390,468,000 $368,723,000 5.9%
Total liabilities and stockholders' equity $729,890,000 $668,106,000 9.2%
SELECTED CASH FLOW INFORMATION (UNAUDITED)
THREE MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,429,000 $ 27,850,000 -80.5%
NET CASH USED IN INVESTING ACTIVITIES $ (4,511,000) $ (9,122,000) -50.5%
Common stock issued $ 3,115,000 $ 5,753,000 -45.9%
Stock buyback -- (16,670,000) --
Dividends paid (4,670,000) (4,463,000) 4.6%
Net debt payments -- (942,000) --
Decrease in bank overdraft -- (7,299,000) --
NET CASH USED IN FINANCING ACTIVITIES $ (1,555,000) $(23,621,000) -93.4%
SIX MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 23,243,000 $ 40,311,000 -42.3%
NET CASH USED IN INVESTING ACTIVITIES $(21,222,000) $(14,698,000) 44.4%
Common stock issued $ 7,674,000 $ 9,740,000 -21.2%
Stock buyback (9,297,000) (16,670,000) -44.2%
Dividends paid (9,310,000) (8,878,000) 4.9%
Net debt payments -- (11,819,000) --
Increase in bank overdraft -- 1,687,000 --
NET CASH USED IN FINANCING ACTIVITIES $(10,933,000) $(25,940,000) -57.9%
SUMMARY INCOME STATEMENT (UNAUDITED)
THREE MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
Sales and other income $589,829,000 $525,850,000 12.2%
Gain on insurance claim -- 4,300,000 --
------------ ------------
Total revenues 589,829,000 530,150,000 11.3%
Operating expenses and cost of goods sold 526,613,000 468,563,000 12.4%
Selling, general and administrative expenses 47,460,000 38,791,000 22.3%
Interest expense 178,000 232,000 -23.3%
Income before income taxes $ 15,578,000 $ 22,564,000 -31.0%
Net income $ 9,892,000 $ 13,989,000 -29.3%
Net income per common share:
Basic $ 0.20 $ 0.28 28.6%
Diluted $ 0.20 $ 0.27 25.9%
Average common shares outstanding:
Basic 48,994,000 49,256,000 -0.5%
Diluted 49,877,000 51,494,000 -3.1%
SIX MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
Sales and other income $1,170,455,000 $1,053,402,000 11.1%
Gain on insurance claim -- 4,300,000 --
-------------- --------------
Total revenues 1,170,455,000 1,057,702,000 10.7%
Operating expenses and cost of goods sold 1,052,996,000 943,346,000 11.6%
Selling, general and administrative expenses 95,066,000 78,407,000 21.2%
Interest expense 303,000 497,000 -39.0%
Income before income taxes $ 22,090,000 $ 35,452,000 -37.7%
Net income $ 14,230,000 $ 21,980,000 -35.3%
Net income per common share:
Basic $ 0.29 $ 0.45 -35.6%
Diluted $ 0.29 $ 0.43 -32.6%
Average common shares outstanding:
Basic 49,023,000 49,110,000 -0.2%
Diluted 49,925,000 51,086,000 -2.3%
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
THREE MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
SALES AND OTHER INCOME
Janitorial $ 343,505,000 $ 284,229,000 20.9%
Parking 91,659,000 88,353,000 3.7%
Engineering 43,945,000 42,667,000 3.0%
Security 39,008,000 34,631,000 12.6%
Lighting 33,577,000 32,071,000 4.7%
Elevator 27,292,000 28,234,000 -3.3%
Other 10,741,000 15,532,000 -30.8%
Corporate 102,000 133,000 -23.3%
------------- -------------
$ 589,829,000 $ 525,850,000 12.2%
OPERATING PROFIT
Janitorial $ 15,570,000 $ 16,327,000 -4.6%
Parking 1,022,000 1,783,000 -42.7%
Engineering 2,586,000 2,339,000 10.6%
Security 1,160,000 1,065,000 8.9%
Lighting 1,813,000 2,095,000 -13.5%
Elevator 1,043,000 608,000 71.5%
Other 70,000 74,000 -5.4%
Corporate expenses (7,508,000) (5,795,000) 29.6%
------------- -------------
OPERATING PROFIT 15,756,000 18,496,000 -14.8%
Gain on insurance claim -- 4,300,000 --
Interest expense (178,000) (232,000) -23.3%
------------- -------------
Income before income taxes $ 15,578,000 $ 22,564,000 -31.0%
SIX MONTHS ENDED APRIL 30, INCREASE
2003 2002 (DECREASE)
---- ---- ----------
SALES AND OTHER INCOME
Janitorial $ 674,357,000 $ 571,029,000 18.1%
Parking 186,074,000 177,839,000 4.6%
Engineering 89,572,000 86,337,000 3.7%
Security 76,797,000 66,794,000 15.0%
Lighting 66,723,000 64,638,000 3.2%
Elevator 55,474,000 54,727,000 1.4%
Other 21,225,000 31,688,000 -33.0%
Corporate 233,000 350,000 -33.4%
--------------- ---------------
$ 1,170,455,000 $ 1,053,402,000 11.1%
OPERATING PROFIT
Janitorial $ 23,377,000 $ 27,170,000 -14.0%
Parking 1,612,000 2,831,000 -43.1%
Engineering 4,616,000 4,660,000 -0.9%
Security 2,502,000 2,260,000 10.7%
Lighting 2,493,000 4,004,000 -37.7%
Elevator 1,994,000 1,524,000 30.8%
Other (53,000) 772,000 -106.9%
Corporate expenses (14,148,000) (11,572,000) 22.3%
--------------- ---------------
OPERATING PROFIT 22,393,000 31,649,000 -29.2%
Gain on insurance claim -- 4,300,000 --
Interest expense (303,000) (497,000) -39.0%
--------------- ---------------
Income before income taxes $ 22,090,000 $ 35,452,000 -37.7%