On September 6, 2024, ABM Industries Inc (ABM, Financial) released its 8-K filing for the third quarter of fiscal 2024. ABM Industries Inc is a provider of integrated facility solutions, operating through five segments: Business and Industry, Manufacturing and Distribution, Education, Aviation, and Technical Solutions. The company primarily operates in the United States.
Performance Overview
ABM Industries Inc reported a revenue increase of 3.3% to $2.1 billion, surpassing the analyst estimate of $2.04 billion. This growth includes 2.8% organic growth. The company's net income was $4.7 million, a significant decrease of 95% from the previous year, primarily due to increased likelihood of a cash earn-out payment under the Ravenvolt acquisition agreement. However, adjusted net income rose by 13% to $59.5 million, with adjusted EPS at $0.94, up 19% from the prior year, exceeding the analyst estimate of $0.75.
Segment Performance
Revenue growth was driven by the Technical Solutions and Aviation segments, which grew by 25% and 13%, respectively. The Education segment also saw a 4% increase. However, the Business & Industry segment experienced a 1% decline due to ongoing softness in the commercial real estate market, which was partially offset by diversification and market segmentation efforts. The Manufacturing & Distribution segment also saw a 1% decline, reflecting the expected rebalancing of certain work by a large client.
Financial Achievements
Adjusted EBITDA increased by 2% to $128.1 million, maintaining a flat adjusted EBITDA margin of 6.4%. Net cash provided by operating activities was $79.5 million, and free cash flow was $64.1 million, compared to $149.1 million and $138.3 million in the prior year, respectively. The decline in cash flow was largely due to the timing of payments of accounts payable and the absence of the Employee Retention Credit received in the prior year.
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue | $2,094.2 million | $2,028.2 million | 3.3% |
| Net Income | $4.7 million | $98.1 million | (95.2%) |
| Adjusted Net Income | $59.5 million | $52.8 million | 13% |
| Adjusted EPS | $0.94 | $0.79 | 19% |
Balance Sheet and Cash Flow
ABM Industries Inc ended the third quarter with total indebtedness of $1,416.8 million and available liquidity of $513.9 million, including $86.3 million in cash and cash equivalents. The company declared a quarterly cash dividend of $0.225 per common share, payable on November 4, 2024, to shareholders of record on October 3, 2024.
Outlook
Based on its strong third-quarter performance, ABM Industries Inc has raised its outlook for fiscal year 2024 adjusted EPS to a range of $3.48 to $3.55, up from the previous range of $3.40 to $3.50.
“ABM’s strong third quarter performance is further validation that our strategy is working. Our investments in the energy resiliency markets, particularly in microgrids, which grew significantly, as well as those investments in technology, including tools that improve labor efficiency and our go-to-market approach, helped us deliver another quarter of solid organic growth on an enterprise level and resilient margins,” said Scott Salmirs, President & Chief Executive Officer.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from ABM Industries Inc for further details.
