ABM Industries(US:ABM)2026-03-10 18:17Revenue Performance - Revenues increased by $128.6 million, or 6.1%, to $2,243.5 million for the three months ended January 31, 2026, driven by organic growth of 5.5% and acquisition growth of 0.6%[108]. - Revenues for the Business & Industry segment increased by $42.2 million, or 4.1%, to $1,065.1 million for the three months ended January 31, 2026, compared to the prior year[123]. - Manufacturing & Distribution revenues rose by $28.0 million, or 7.1%, to $422.3 million during the same period, driven by business expansion with existing clients and new business wins[125]. - Aviation segment revenues increased by $27.6 million, or 10.2%, to $297.7 million, attributed to new business wins and scope expansions with existing clients[127]. - Education revenues grew by $3.4 million, or 1.5%, to $228.7 million, primarily due to new business wins[129]. - Technical Solutions revenues increased by $27.4 million, or 13.6%, to $229.7 million, with organic growth of 7.1% and acquisition growth of 6.4%[131]. Profitability - Operating profit decreased by $2.9 million, or 3.7%, to $74.7 million during the same period, primarily due to restructuring charges and project delays[108]. - Operating profit for the Business & Industry segment increased by $0.3 million, or 0.4%, to $79.7 million, while the operating profit margin decreased by 28 bps to 7.5%[124]. - Operating profit for Manufacturing & Distribution decreased by $3.1 million, or 7.7%, to $36.3 million, with a margin decline of 139 bps to 8.6%[126]. - Education segment operating profit surged by $7.6 million, or 54.2%, to $21.6 million, with a margin increase of 322 bps to 9.4%[130]. Cash Flow - Net cash provided by operating activities improved by $168.2 million to $62.0 million for the three months ended January 31, 2026, compared to cash used in the prior year[108]. - Net cash provided by operating activities improved to $62.0 million in Q1 2026, compared to cash used of $106.2 million in Q1 2025, marking a $168.2 million improvement[146]. - Net cash used in investing activities decreased to $12.6 million in Q1 2026 from $14.4 million in Q1 2025[147]. - Net cash used in financing activities was $55.2 million in Q1 2026, a shift from net cash provided of $116.9 million in Q1 2025, primarily due to increased share repurchases[148]. Expenses and Costs - Gross margin decreased by 69 basis points to 11.6% for the three months ended January 31, 2026, primarily due to strategic pricing decisions and service mix[111]. - Selling, general and administrative expenses increased by $0.8 million, or 0.4%, to $169.8 million during the three months ended January 31, 2026[112]. - Corporate expenses decreased by $1.3 million, or 1.6%, to $81.9 million, mainly due to a reduction in accruals for potential legal settlements[133]. Debt and Financing - Total outstanding borrowings under the Amended Credit Facility were $1.6 billion as of January 31, 2026, with a borrowing capacity of up to $507.7 million[108]. - As of January 31, 2026, total outstanding borrowings under the Amended Credit Facility were $1.6 billion, with a weighted average interest rate of 5.44%[139]. - Interest expense increased by $1.1 million, or 4.9%, to $24.0 million during the three months ended January 31, 2026, driven by higher borrowings[115]. Share Repurchases - Total number of shares repurchased in the three months ended January 31, 2026, was 2.07 million, compared to 0.42 million in the same period of 2025[143]. - Average price paid per share for repurchases was $44.13 in Q1 2026, down from $51.23 in Q1 2025[143]. - Total cash paid for share repurchases in Q1 2026 was $91.1 million, significantly higher than $21.3 million in Q1 2025[143]. - Authorization for share repurchases remaining as of January 31, 2026, was $92.0 million[142]. Tax and Accounting - Effective tax rate increased to 25.6% for the three months ended January 31, 2026, compared to 21.4% in the prior year[116]. - The company is evaluating the impact of recently issued accounting standards on its financial statements, including those related to income tax disclosures and expense disaggregation[152]. - The company reported no material changes related to market risk from the previous annual report[153]. Restructuring and Cost Savings - The Restructuring Program is expected to deliver approximately $35.0 million of annualized cost savings once fully implemented in 2026[103]. - Foreign currency translation gain was $9.5 million for the three months ended January 31, 2026, compared to a loss of $7.6 million in the prior year[120].