The ABM Building Solutions division of
ABM Industries Incorporated
) has partnered with Chipley, Florida-based Washington-Holmes
Technical Center to help the latter in cutting energy consumption
through its Bundled Energy Solution (BES) Program and save roughly
$2 million in the process.
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The BES Program is cost efficient and simply caters to building
owners as well as facility managers who are interested in improving
energy management. Each client can get solutions as per his/her own
requirements. Moreover, the clients can reallocate the savings from
the project and pay for the improvements on the energy front.
The project will deal with fixing lights, refurbishing exhaust
systems, installation of web-based heating, ventilation and
air-conditioning (HVAC) control system among others in the
buildings on the campus. ABM intends to complete the project this
year by August. It is expected that the program will benefit
Washington-Holmes Technical Center by reducing energy consumption
by more than 1 million kilowatt hour per year.
Besides, ABM will also offer the students of the Center an
opportunity to gather experiences on Building Trades Program. The
students will get the privilege to do field survey and recommend
their suggestions on improving the efficiency alongside ABM.
Earlier, ABM had partnered with other institutions including South
Gate Community Schools in Michigan, Madison County School District
in Madison County in Georgia, Fayette County Career & Technical
Institute ("FCCTI") in Pennsylvania.
We expect that the BES program will benefit ABM to get many more
new deals in addition to renewing the contracts of the existing
ones. This will also enable the company to combat with the growing
threats from both local and national players including privately
held companies like ARAMARK Corporation, Central Parking
Corporation, UGL Services UNICCO Operations Co., given the low cost
of entry into the facility services business.
ABM has significantly improved its efficiencies with the
acquisition of Linc Group in December, 2010. However, a significant
portion of Linc's revenues is generated through government
contracts. Reduced government spending on outsourced services as
well as payment delays may weigh on its revenues.
ABM retains a short-term Zacks #4 Rank (Sell). We have a long-term
Neutral recommendation on the stock.