ABM's BES Program to Save $2M - Analyst Blog

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The ABM Building Solutions division of ABM Industries Incorporated ( ABM ) 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.

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.
 


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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