ABM Industries(ABM) - 2025 Q1 - Quarterly Report

Revenue and Growth - Revenues increased by $45.3 million, or 2.2$2,114.9 million during the three months ended January 31, 2025, compared to the prior year period, driven by organic growth of 1.6% and acquisition growth of 0.6%[107] - Total revenues for the three months ended January 31, 2025, increased by $45.3 million, or 2.2$2,114.9 million compared to the prior year period[120] - Acquisition growth included a $12.7 million revenue increase from the Quality Uptime Acquisition, completed in June 2024[109] - Aviation segment revenues increased by$20.6 million, or 8.2%, to $270.1 million, driven by new business and scope expansions with existing clients[125] - Education segment revenues increased by$5.2 million, or 2.4%, to $225.3 million, primarily due to new business wins and increased work orders[127] - Technical Solutions segment revenues increased by$36.4 million, or 21.9%, to $202.3 million, with organic growth of 14.2$3.5 million, or 4.7%, to $77.6 million during the same period, attributed to revenue increases and operational efficiencies[107] - Gross margin improved by 53 basis points to 12.3$10.0 million to $16.6 million, with an operating profit margin increase of 424 bps to 8.2$14.4 million, or 9.3%, to $169.0 million, primarily due to higher compensation expenses from headcount expansion and legal settlements[111] - Corporate expenses increased by$8.5 million, or 11.4%, to $83.2 million, primarily due to higher legal settlements and compensation expenses[131] - Net cash used in operating activities was$106.2 million during the three months ended January 31, 2025, compared to $0.1 million in the prior year period, driven by increased working capital needs[107] - Net cash provided by financing activities increased to$116.9 million during the three months ended January 31, 2025, from $0.5 million in the prior year[150] - Net cash used in investing activities increased by$1.4 million during the three months ended January 31, 2025, primarily due to purchases of property, plant, and equipment[149] Debt and Financing - Total outstanding borrowings under the Amended Credit Facility were $1.5 billion as of January 31, 2025, with a borrowing capacity of up to$238.0 million[107] - Total outstanding borrowings under the Amended Credit Facility were $1.5 billion in cash borrowings and$29.7 million in standby letters of credit, with a weighted average interest rate of 6.17%[140] - Principal payments under the term loan amounted to $8.1 million during the three months ended January 31, 2025[140] - As of January 31, 2025, the company was in compliance with its credit facility covenants, which include a maximum total net leverage ratio of 5.00 to 1.00[139] Strategic Initiatives - The ELEVATE strategy involves investments totaling$200 - $215 million aimed at strengthening industry leadership and enhancing core services[100] - The company anticipates long-term cash uses may include strategic acquisitions and ongoing technology transformation initiatives under the ELEVATE strategy[133] - The company plans to reinvest foreign earnings to fund future non-U.S. growth and expansion, without remitting such earnings to the United States[141] Market and Risk - A foreign currency translation loss of$7.6 million was recorded during the three months ended January 31, 2025, compared to a gain of $5.4 million in the prior year period[118] - There are no material changes related to market risk from the disclosures in the Annual Report for the year ended October 31, 2024[155]