ABM Industries Incorporated: Fourth Quarter Fiscal 2021 Conference Call Presentation
This presentation contains both historical and forward-looking statements regarding ABM Industries Incorporated (“ABM”) and its subsidiaries (collectively referred to as “ABM”, “we”, “us”, “our” or the “Company”). We make forward-looking statements about future expectations, estimates and projections that are uncertain, and often
contain words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “foresee”, “intend”, “likely”, “may”, “prospect” “,” Plan “,” predict, “” should “,” target “or other similar words or expressions. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and difficult to predict assumptions. For us, the specific uncertainties that could cause our actual results to differ materially from those expressed in our forward-looking statements include: The COVID-19 pandemic has had and is expected to continue to have a negative effect on the global economy, and the United States the United States economy, and it has disrupted and is expected to continue to disrupt our operations and those of our customers, which may have a negative impact on our business, our results of operations, our cash flow and our sit financial uation; our success depends on our ability to conduct profitable business despite competitive market pressures; our business success depends on our ability to attract and retain qualified personnel and senior management and to manage labor costs; investments and changes in our business, operating structure, financial reporting structure or staff related to our ELEVATE strategy, including the implementation of strategic transformations, improved business processes and technology initiatives may not have the desired effects on our financial position and results of operations; our ability to maintain long-term customer relationships is essential to our continued success; our international operations involve risks different from those we face in the United States that could affect our results of operations and financial condition; our use of subcontractors or joint venture partners to perform work under customer contracts exposes us to liability and financial risk; acquisitions,
disposals and other strategic transactions may not achieve financial or strategic objectives, disrupt our ongoing activities and have a negative impact on our operating results; we may encounter difficulties in integrating Able’s services and not realize the growth opportunities and cost synergies expected from the Able acquisition; we manage our insurable risks through a combination of third-party policies and self-insurance, and we retain a substantial portion of the risk
associated with expected losses under these programs, which exposes us to the volatility associated with these risks, including the possibility that changes in estimates of our provisions for ultimate insurance losses could result in significant charges to our earnings ; our risk management and safety programs may not have the desired effect of reducing our liability for personal injury or loss of property; we may experience breaches or disruption of our IT systems or those of our third party suppliers or customers, or other data compromises that could adversely affect our business; unfavorable developments in our collective and representative actions and other lawsuits alleging various claims could cause us to incur substantial liabilities; a significant number of our employees are covered by collective agreements which could expose us to potential liabilities related to our participation in multi-employer pension plans, the obligation to contribute to other benefit plans and to the possibility of strikes, work slowdowns or similar activities, and organizing campaigns; our business may be significantly affected by changes in tax and fiscal policies; negative or unexpected tax consequences could adversely affect our results of operations; changes in general economic conditions, such as changes in energy prices, government regulations or consumer preferences, could reduce the demand for installation services and, therefore, reduce our profits and negatively affect our financial situation ; future increases in the level of our borrowings or in interest rates could affect our results of operations; impairment of goodwill and long-lived assets could have a material adverse effect on our financial condition and results of operations; If we fail to maintain appropriate and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be adversely affected, which could adversely affect our results of operations and investor perception of our company and, therefore, could have a material adverse effect on the value of our common shares; our business may be adversely affected by adverse weather conditions; catastrophic events, disasters and terrorist attacks could disrupt our services; the actions of activist investors could disrupt our business. For more information about these risks and uncertainties we face, see ABM’s risk factors, as they may change from time to time, set out in our filings with the Securities and Exchange Commission, including including our most recent annual report on Form 10-K and subsequent filings. We urge readers to take these risks and uncertainties into account in evaluating our forward-looking statements. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date they are posted. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Use of non-GAAP financial information
To supplement ABM’s consolidated financial information, the Company has presented earnings from continuing operations and earnings from continuing operations per diluted share, adjusted for items affecting comparability, for the fourth quarter and twelve months of the financial years. October 31, 2021 and 2020. These adjustments have
was made with the aim of providing financial metrics that give management and investors a better understanding of underlying operational results and trends as well as ABM’s operational performance. In addition, the Company presented earnings before earnings from discontinued operations, net of taxes, interest, taxes, depreciation and amortization and excluding items affecting comparability (Adjusted EBITDA) for the fourth quarter and twelve months of fiscal years 2021 and 2020. Adjusted EBITDA is one of the metrics that management uses as a basis for planning and forecasting future periods. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. We cannot provide a reconciliation of adjusted non-GAAP EBITDA margin measures to GAAP due to the inherent difficulty in predicting and quantifying certain amounts that are necessary for such a reconciliation. The Company has also presented free cash flow which is defined as net cash flow generated by operating activities less additions to property, plant and equipment. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for financial statements prepared in accordance with accounting principles generally accepted in the United States of America. (See the accompanying financial tables for additional financial data and corresponding reconciliations to certain GAAP financial measures.)