ABM Industries Incorporated
) reported strong third quarter fiscal 2013 results (ended July
31, 2013) with net income of $16.1 million or 29 cents per share
compared with $12.6 million or 23 cents per share in the
year-earlier quarter. Excluding non-recurring items, adjusted
earnings for the reported quarter improved to 41 cents per share
from 37 cents in the year-ago quarter. The adjusted earnings beat
the Zacks Consensus Estimate by 3 cents.
Total revenue increased 12.8% year over year to $1, 216.8 million
in the quarter, primarily attributable to accretive acquisitions
and organic growth from new sales and expansion of services with
Revenues from the segment increased 3.2% year over year in the
quarter to $621.8 million, representing the largest quarterly
organic sales improvement in 5 years, largely driven by new
significant business wins. However, segment operating profit
declined 1.3% to $34.4 million.
Organic revenues improved 6.3% year over year to $152.8 million,
while operating profit increased 21.5% to $7.0 million.
Revenues from the segment declined 0.6% year over year to $154.0
million during the quarter, although operating profit expanded
4.3% to $8.1 million.
The segment reported revenues of $96.2 million compared with
$91.6 million in the year-ago quarter, representing a 5.0%
year-over-year increase. Operating profit increased 36.7% to $4.0
Building & Energy Solutions:
Revenues from the segment increased 21.6% to $104.9 million,
owing to accretive acquisitions and new commercial service and
maintenance contracts like bundled energy solutions jobs.
Operating profits climbed a stellar 82.5% to $6.7 million with
stringent cost-cutting measures and benefits from investments in
healthcare vertical and energy businesses.
Adjusted EBITDA improved 14.9% in the reported quarter to $57.2
million, driven by incremental contribution from the recent
acquisitions and new businesses.
ABM Industries has a healthy pipeline of future businesses and is
particularly going strong in government business. The company
expects to continue its bull run in the coming quarters as well
with continued healthy margin improvements and seamless
integration of acquired businesses. Management also reiterated
that corporate restructuring initiatives were well on track to
have a sustained long-term growth momentum.
Cash and cash equivalents at quarter-end were $38.7 million. Net
cash from operations was $46.5 million for the reported quarter
compared with $28.3 million in the prior-year period. This
enabled the company to reduce its outstanding debt under its
credit facility by $36 million to $348 million.
Banking on the strong quarterly results, ABM Industries narrowed
its guidance for fiscal 2013 and now anticipates income from
continuing operations to be in the range of $1.26 to $1.31 per
share compared with earlier projections of $1.21 to $1.31 a
share. Adjusted income is expected to be in the range of $1.45 to
$1.50 per share compared with previous expectations of $1.40 to
ABM Industries' strategy entails growth through acquisitions. The
company expects to extend its global footprint as well as
strengthen its position in existing markets through successful
integration of these companies and organic growth across the
ABM Industries presently has a Zacks Rank #3 (Hold). Other
players in the industry that warrant a look include
AMN Healthcare Services Inc.
CTPartners Executive Search Inc.
), each carrying Zacks Rank #2 (Buy).
ABM INDUSTRIES (ABM): Free Stock Analysis
AMN HLTHCR SVCS (AHS): Free Stock Analysis
CTPARTNERS EXEC (CTP): Free Stock Analysis
INSPERITY INC (NSP): Free Stock Analysis
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