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ABM Navigates Labor Issues on Way to Record Revenues

Print Article Contributed by BSM Staff

NEW YORK -- ABM, a provider of facility solutions, posted record revenues in the third quarter, helped by a 2017 acquisition and successful navigation of a tight labor market.

The company saw a third quarter profit of $33.6 million, or 51 cents a share, on sales of $1.6 billion, compared to a profit of $32.9 million, or 58 cents a share, on sales of $1.3 billion in the same period last year.

"We delivered results that demonstrate our ability to navigate the current labor environment,” said Scott Salmirs, president and CEO of ABM Industries. “We executed against our initiatives and performed in line with our expectations for the third quarter."

Revenue related to the 2017 acquisition of GCA Services Group of $260 million was predominantly reflected in the Education, Technology & Manufacturing, and Business & Industry segments.
Organic revenue growth of 4.5 percent was primarily driven by growth within the Business & Industry segment, which includes a large UK-related contract win from September 2017.

Income from continuing operations of $33.7 million, or $0.51 per diluted share, was impacted by higher amortization, interest expense and higher share count related to the GCA acquisition.

Net cash provided by continuing operating activities increased to $74.2 million for the quarter, reflecting better working capital management and the contribution from GCA.

"At this time, we continue to experience the impact from a tighter labor market and we do not expect to see a material change in this trend in the current macroeconomic environment,” said Salmirs. “Our teams have been implementing mitigation plans, including intensified labor management and cost containment.  Concurrently, we are executing on key process and IT initiatives that will enable us to run our business with more agility and efficiency over the long term."

The company ended the quarter with total debt, including standby letters of credit, of $1.2 billion. It has assets of $3.74 billion, and liabilities of $2.28 billion.