ABM INDUSTRIES INC DE

Previous wording

•Revenues increased by $45.3 million, or 2.2%, to $2,114.9 million during the three months ended January 31, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 1.6% and acquisition growth of 0.6%. The organic revenue growth was due to the higher project revenues due to the timing of certain microgrid systems design and installation projects within Technical Solutions and net new business and expansion of business with existing customers within Aviation and Education. The increase in revenues was partially offset by attrition of engineering customers within B&I and a loss of a certain customer within M&D. Acquisition growth was driven by a $12.7 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Current wording

•Revenues increased by $93.5 million, or 4.6%, to $2,111.7 million during the three months ended April 30, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 3.7% and acquisition growth of 0.8%. The organic revenue growth was due to higher project revenues due to the higher microgrid projects within Technical Solutions and net new business and expansion of business with existing customers within B&I, Aviation, M&D, and Education. The increase in revenues was partially offset by a loss of a certain customer within M&D in the first quarter of 2025. Acquisition growth was driven by a $16.6 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Previous wording

•We had an increase in operating profit of $3.5 million, to $77.6 million, during the three months ended January 31, 2025, as compared to the prior year period. The increase was primarily attributed to:

Current wording

•We had an increase in operating profit of $1.0 million, to $82.3 million, during the three months ended April 30, 2025, as compared to the prior year period. The increase was primarily attributed to:

Previous wording

◦respective revenue increases and contract and service mix and operational efficiencies; and

Current wording

◦respective revenue increases, contract and service mix, and operational efficiencies; and

Previous wording

◦base wage increases within Aviation and Education; and

Current wording

◦base wage increases within Aviation and Education.

Previous wording

•Net cash used in operating activities was $106.2 million during the three months ended January 31, 2025, as compared to net cash used in operating activities of $0.1 million during the prior year period. The change was primarily driven by an increase in working capital due to the transition to the Company’s new ERP systems for our Business and Industry and Manufacturing and Distribution segments that temporarily delayed invoicing to certain clients within these industry groups. We anticipate improvement in our operating cash flows next quarter and full normalization in the second half of fiscal year 2025.

Current wording

•Net cash used in operating activities was $73.9 million during the six months ended April 30, 2025, as compared to net cash provided by operating activities of $116.9 million during the prior year period. The change was primarily driven by an increase in working capital due to the transition to the Company’s new ERP systems for our Business and Industry and Manufacturing and Distribution segments that temporarily delayed invoicing to certain clients within these industry groups. We anticipate continued improvement in our operating cash flows and full normalization in the second half of fiscal year 2025.

Previous wording

•Dividends of $16.4 million were paid to shareholders, and dividends totaling $0.265 per common share were declared during the three months ended January 31, 2025.

Current wording

•Dividends of $32.9 million were paid to shareholders, and dividends totaling $0.530 per common share were declared during the six months ended April 30, 2025.

Previous wording

•At January 31, 2025, total outstanding borrowings under our Amended Credit Facility were $1.5 billion. At January 31, 2025, we had up to $238.0 million of borrowing capacity.

Current wording

•At April 30, 2025, total outstanding borrowings under our Amended Credit Facility were $1.6 billion. At April 30, 2025, we had up to $599.1 million of borrowing capacity.

Previous wording

Revenues increased by $45.3 million, or 2.2%, to $2,114.9 million during the three months ended January 31, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 1.6% and acquisition growth of 0.6%. The organic revenue growth was due to the higher project revenues due to the timing of certain microgrid systems design and installation projects within Technical Solutions and net new business and expansion of business with existing customers within Aviation and Education. The increase in revenues was partially offset by attrition of engineering customers within B&I and a loss of a certain customer within M&D. Acquisition growth was driven by a $12.7 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Current wording

Revenues increased by $93.5 million, or 4.6%, to $2,111.7 million during the three months ended April 30, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 3.7% and acquisition growth of 0.8%. The organic revenue growth was due to higher project revenues due to the higher microgrid projects within Technical Solutions and net new business and expansion of business with existing customers within B&I, Aviation, M&D, and Education. The increase in revenues was partially offset by a loss of a certain customer within M&D in the first quarter of 2025. Acquisition growth was driven by a $16.6 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Previous wording

Operating expenses increased by $28.8 million, or 1.6%, to $1,855.1 million during the three months ended January 31, 2025, as compared to the prior year period. Gross margin increased by 53 bps to 12.3% in the three months ended January 31, 2025, from 11.8% in the prior year period. The increase in gross margin was primarily driven by contract and service mix and operational efficiencies as well as an absence of a $5.3 million unfavorable self-insurance reserve adjustment related to prior year claims from actuarial evaluations completed in the three months ended January 31, 2024, partially offset by base wage increases within Aviation and Education.

Current wording

Operating expenses increased by $77.5 million, or 4.4%, to $1,841.0 million during the three months ended April 30, 2025, as compared to the prior year period. Gross margin increased by 19 bps to 12.8% in the three months ended April 30, 2025, from 12.6% in the prior year period. The increase in gross margin was primarily driven by contract and service mix and operational efficiencies within Aviation and Education as well as an absence of a $4.3 million unfavorable self-insurance reserve adjustment related to prior year claims from actuarial evaluations completed in the three months ended April 30, 2024 within Corporate. The increase in gross margin was partially offset by base wage increases within Aviation and Education.

Previous wording

Selling, general and administrative expenses increased by $14.4 million, or 9.3%, to $169.0 million during the three months ended January 31, 2025, as compared to the prior year period. The increase in selling, general and administrative expenses was primarily attributable to:

Current wording

Selling, general and administrative expenses increased by $15.2 million, or 9.5%, to $175.1 million during the three months ended April 30, 2025, as compared to the prior year period. The increase in selling, general and administrative expenses was primarily attributable to:

Previous wording

Amortization of intangible assets decreased by $1.3 million, or 9.4%, to $13.3 million during the three months ended January 31, 2025, as compared to the prior year period. The decrease was primarily due to the lower amortization of intangibles, primarily intangibles acquired as part of the Able Acquisition.

Current wording

Amortization of intangible assets decreased by $0.4 million, or 2.5%, to $13.2 million during the three months ended April 30, 2025, as compared to the prior year period. The decrease was primarily due to the lower amortization of intangibles, primarily intangibles acquired as part of the Able Acquisition, partially offset by amortization of intangibles from the Quality Uptime Acquisition.

Previous wording

Interest expense increased by $1.6 million, or 7.1%, to $22.9 million during the three months ended January 31, 2025, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Current wording

Interest expense increased by $3.3 million, or 16.1%, to $23.9 million during the three months ended April 30, 2025, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Previous wording

Our effective tax rates from income on operations for the three months ended January 31, 2025, and January 31, 2024, were 21.4% and 17.3%, respectively, resulting in provisions for taxes of $11.9 million and $9.3 million, respectively.

Current wording

Our effective tax rates from income on operations for the three months ended April 30, 2025, and April 30, 2024, were 29.4% and 29.9%, respectively, resulting in provisions for taxes of $17.6 million and $18.7 million, respectively.

Previous wording

We had a loss of $1.1 million on interest rate swaps during the three months ended January 31, 2025, as compared to a loss of $16.0 million during the three months ended January 31, 2024, primarily due to underlying changes in the fair value of our interest rate swaps.

Current wording

We had a loss of $5.4 million on interest rate swaps during the three months ended April 30, 2025, as compared to a gain of $10.3 million during the three months ended April 30, 2024, primarily due to underlying changes in the fair value of our interest rate swaps.

Previous wording

We had a foreign currency translation loss of $7.6 million during the three months ended January 31, 2025, as compared to a foreign currency translation gain of $5.4 million during the three months ended January 31, 2024. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Current wording

We had a foreign currency translation gain of $14.3 million during the three months ended April 30, 2025, as compared to a foreign currency translation loss of $1.7 million during the three months ended April 30, 2024. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Previous wording

Operating profit decreased by $1.9 million, or 4.8%, to $39.4 million during the three months ended January 31, 2025, as compared to the prior year period. Operating profit margin decreased by 33 bps to 10.0% in the three months ended January 31, 2025, from 10.3% in the prior year period. The decrease in operating profit margin was primarily attributable to investments to hire certain technical expertise to support future growth and higher legal expense, partially offset by the contract mix.

Current wording

Operating profit decreased by $3.7 million, or 8.5%, to $39.9 million during the three months ended April 30, 2025, as compared to the prior year period. Operating profit margin decreased by 120 bps to 10.0% in the three months ended April 30, 2025, from 11.2% in the prior year period. The decrease in operating profit margin was primarily attributable to contract mix and investments made in the fourth quarter of 2024 to hire certain technical expertise to support future growth.

Previous wording

Aviation revenues increased by $20.6 million, or 8.2%, to $270.1 million during the three months ended January 31, 2025, as compared to the prior year period. The increase was primarily attributable to new business and scope expansions with the existing clients. Management reimbursement revenues for this segment totaled $10.6 million and $9.5 million for the three months ended January 31, 2025 and 2024, respectively.

Current wording

Aviation revenues increased by $21.9 million, or 9.2%, to $260.1 million during the three months ended April 30, 2025, as compared to the prior year period. The increase was primarily attributable to new business and scope expansions with the existing clients both domestically and internationally. Management reimbursement revenues for this segment totaled $12.6 million and $8.2 million for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

Operating profit increased by $2.5 million, or 25.9%, to $12.2 million for the three months ended January 31, 2025, as compared to the prior year period. Operating profit margin increased by 63 bps to 4.5% in the three months ended January 31, 2025. The operating profit margin increased primarily due to contract mix, partially offset by base wage increases.

Current wording

Operating profit increased by $3.4 million, or 26.2%, to $16.5 million for the three months ended April 30, 2025, as compared to the prior year period. Operating profit margin increased by 85 bps to 6.3% in the three months ended April 30, 2025. The operating profit margin increased primarily due to contract mix and operational efficiencies, particularly in managing overhead costs, partially offset by base wage increases.

Previous wording

Education revenues increased by $5.2 million, or 2.4%, to $225.3 million during the three months ended January 31, 2025, as compared to the prior year period. The increase was primarily attributable to new business wins and an increase in work orders.

Current wording

Education revenues increased by $2.2 million, or 1.0%, to $227.8 million during the three months ended April 30, 2025, as compared to the prior year period. The increase was primarily attributable to new business wins.

Previous wording

Operating profit increased by $1.3 million, or 9.9%, to $14.0 million for the three months ended January 31, 2025, as compared to the prior year period. Operating profit margin increased by 43 bps to 6.2% in the three months ended January 31, 2025, from 5.8% in the prior year period. The increase in operating profit margin was primarily attributable to operational efficiencies, particularly in managing overtime, materials and supplies, and general and administrative headcount, partially offset by base wage increases.

Current wording

Operating profit increased by $2.3 million, or 19.4%, to $13.8 million for the three months ended April 30, 2025, as compared to the prior year period. Operating profit margin increased by 93 bps to 6.0% in the three months ended April 30, 2025, from 5.1% in the prior year period. The increase in operating profit margin was primarily attributable to operational efficiencies, particularly in managing overtime, materials and supplies, and general and administrative headcount, partially offset by base wage increases.

Previous wording

Technical Solutions revenues increased by $36.4 million, or 21.9%, to $202.3 million during the three months ended January 31, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 14.2% and acquisition growth of 7.7%. The organic revenue growth was primarily driven by higher project revenues due to the timing of certain microgrid systems design and installation projects, partially offset by a decrease in electric vehicle charging station sales. Acquisition growth was driven by a $12.7 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Current wording

Technical Solutions revenues increased by $34.0 million, or 19.3%, to $210.2 million during the three months ended April 30, 2025, as compared to the prior year period. Revenue growth was comprised of organic growth of 9.8% and acquisition growth of 9.5%. The organic revenue growth was primarily driven by higher project revenues due to the higher microgrid projects as well as certain infrastructure solutions projects, partially offset by a decrease in electric vehicle charging station revenues. Acquisition growth was driven by a $16.6 million revenue increase from the Quality Uptime Acquisition, which was completed in June 2024.

Previous wording

Corporate expenses increased by $8.5 million, or 11.4%, to $83.2 million during the three months ended January 31, 2025, as compared to the prior year period. The increase in corporate expenses was primarily attributable to:

Current wording

Corporate expenses increased by $3.2 million, or 4.0%, to $82.9 million during the three months ended April 30, 2025, as compared to the prior year period. The increase in corporate expenses was primarily attributable to:

Previous wording

•a $2.0 million increase in acquisition and integration costs.

Current wording

•a $2.0 million increase in costs associated with systems’ go-live; and

Previous wording

•an absence of a $5.3 million unfavorable self-insurance reserve adjustment from actuarial evaluations completed in the three months ended January 31, 2024.

Current wording

Operating expenses increased by $106.3 million, or 3.0%, to $3,696.1 million during the six months ended April 30, 2025, as compared to the prior year period. Gross margin increased by 37 bps to 12.6% in the six months ended April 30, 2025, from 12.2% in the six months ended April 30, 2024. The increase in gross margin was primarily driven by operational efficiencies within Aviation and Education and an absence of a $9.7 million unfavorable self-insurance reserve adjustment from actuarial evaluations completed in the six months ended April 30, 2024 within Corporate. The increase in gross margin was partially offset by change in contract mix within M&D.

Previous wording

•an $8.1 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, and headcount expansion from recent acquisitions and ongoing business growth within Technical Solutions; and

Current wording

•a $10.2 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, headcount expansion from recent acquisitions, and ongoing business growth within Technical Solutions during the three months ended January 31, 2025;

Previous wording

Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations. Our effective tax rate for the three months ended January 31, 2024, was reduced by discrete items, primarily adjustments for uncertain tax positions, share based compensation, and return to provision adjustments related to our non-U.S operations.

Current wording

Our effective tax rate for the six months ended April 30, 2025 benefited from discrete items, primarily from $4.2 million for return to provision adjustments related to our non-U.S. operations. Our effective tax rate for the six months ended April 30, 2024, benefited from discrete items, primarily from $2.4 million for uncertain tax positions, $2.2 million for share-based compensation, and $2.2 million for return to provision adjustments related to our non-U.S. operations.

Previous wording

B&I revenues decreased by $10.2 million, or 1.0%, to $1,022.9 million during the three months ended January 31, 2025, as compared to the prior year period. The revenue decrease was primarily driven by the attrition of certain engineering clients and a decrease in work orders, partially offset by client expansions and new wins both domestic and international. Management reimbursement revenues for this segment totaled $71.3 million and $70.5 million for the three months ended January 31, 2025 and 2024, respectively.

Current wording

B&I revenues increased by $15.6 million, or 0.8%, to $2,038.4 million during the six months ended April 30, 2025, as compared to the prior year period. The revenue increase was primarily driven by client expansions both domestic and international, partially offset by attrition of certain engineering clients. Management reimbursement revenues for this segment totaled $143.1 million and $139.1 million for the six months ended April 30, 2025 and 2024, respectively.

Previous wording

Operating profit increased by $10.0 million to $16.6 million during the three months ended January 31, 2025, as compared to the prior year period. Operating profit margin increased by 424 bps to 8.2% in the three months ended January 31, 2025, from 4.0% in the prior year period. The increase in operating profit margin was primarily attributable to the contract mix, partially offset by higher selling, general, and administrative expenses, mainly due to increased compensation costs associated with headcount expansion from recent acquisitions and ongoing business growth.

Current wording

Operating profit increased by $6.5 million, or 27.6%, to $30.0 million during the six months ended April 30, 2025, as compared to the prior year period. Operating profit margin increased by 40 bps to 7.3% in the six months ended April 30, 2025, from 6.9% in the six months ended April 30, 2024. The increase in operating profit margin was primarily attributable to the contract mix, partially offset by higher amortization of intangible assets.

Previous wording

•a $3.6 million increase in accruals for actual and potential legal settlements.

Current wording

•a $4.8 million increase in accruals for actual and potential legal settlements;

Previous wording

•a $4.3 million increase in compensation and related expenses primarily due to higher salaries and certain incentive plans; and

Current wording

•a $4.3 million increase in compensation and related expenses primarily due to higher salaries and certain incentive plans;

Previous wording

On June 28, 2021, the Company amended and restated the Credit Facility, extending the maturity date to June 28, 2026, and increasing the capacity of the revolving credit facility from $800.0 million to $1.3 billion and the then-remaining term loan outstanding from $620.0 million to $650.0 million. The Amended Credit Facility provides for the issuance of up to $350.0 million for standby letters of credit and the issuance of up to $75.0 million in swingline advances. The obligations under the Amended Credit Facility are secured on a first-priority basis by a lien on substantially all of our assets and properties, subject to certain exceptions. Additionally, we may repay amounts borrowed under the Amended Credit Facility at any time without penalty.

Current wording

On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility, consisting of a $900.0 million revolver and an $800.0 million amortizing term loan. In accordance with terms of the Credit Facility, the revolver was reduced to $800.0 million on September 1, 2018.On February 26, 2025, we amended and restated the Credit Facility (the “Amended Credit Facility”), extending the maturity date to February 26, 2030, and increasing the capacity of the revolving credit facility from $1.3 billion to $1.6 billion and the then-remaining term loan outstanding from $528.1 million to $600.0 million. The Amended Credit Facility provides for the issuance of up to $250.0 million for standby letters of credit and the issuance of up to $100.0 million in swingline advances.

Previous wording

During the three months ended January 31, 2025, we made principal payments under the term loan of $8.1 million. At January 31, 2025, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.5 billion and $29.7 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 6.17%. At January 31, 2025, we had up to $238.0 million of borrowing capacity.

Current wording

During the six months ended April 30, 2025, we made principal payments under the term loan of $8.1 million. At April 30, 2025, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.6 billion and $29.7 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 6.07%. At April 30, 2025, we had up to $599.1 million of borrowing capacity.

Previous wording

We repurchased shares under the share repurchase program during the three months ended January 31, 2025, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase programmay be suspended or discontinued at any time without prior notice. At January 31, 2025, authorization for $133.2 million of repurchases remained under our share repurchase program.

Current wording

We did not repurchase shares under the share repurchase program during the three months ended April 30, 2025. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase programmay be suspended or discontinued at any time without prior notice. At April 30, 2025, authorization for $133.2 million of repurchases remained under our share repurchase program.

Previous wording

Net cash used in operating activities was $106.2 million during the three months ended January 31, 2025, as compared to net cash used in operating activities of $0.1 million during the prior year period.The change was primarily driven by an increase in working capital due to the transition to the Company’s new ERP systems for our Business and Industry and Manufacturing and Distribution segments that temporarily delayed invoicing to certain clients within these industry groups. We anticipate improvement in our operating cash flows next quarter and full normalization in the second half of fiscal year 2025.

Current wording

Net cash used in operating activities was $73.9 million during the six months ended April 30, 2025, as compared to net cash provided by operating activities of $116.9 million during the prior year period. The change was primarily driven by an increase in working capital due to the transition to the Company’s new ERP systems for our Business and Industry and Manufacturing and Distribution segments that temporarily delayed invoicing to certain clients within these industry groups. We anticipate continued improvement in our operating cash flows and full normalization in the second half of fiscal year 2025.

Previous wording

Net cash used in investing activities increased by $1.4 million during the three months ended January 31, 2025, as compared to the prior year period. This quarter’s activity was primarily related to purchases of property, plant and equipment.

Current wording

Net cash used in investing activities increased by $3.0 million during the six months ended April 30, 2025, as compared to the prior year period. This quarter’s activity was primarily related to purchases of property, plant and equipment.

Previous wording

Net cash provided by financing activities was $116.9 million during the three months ended January 31, 2025, as compared to net cash provided by financing activities of $0.5 million during the prior year period. The change was primarily related to an increase in net borrowings from our Amended Credit Facility to fund $106.2 million of net cash used by operating activities.

Current wording

Net cash provided by financing activities was $98.7 million during the six months ended April 30, 2025, as compared to net cash used in financing activities of $98.0 million during the prior year period. The change was primarily related to an increase in net borrowings from our Amended Credit Facility to fund $73.9 million of net cash used by operating activities.