ABM Industries Inc (ABM) has reported a 79.90 percent plunge in profit for the quarter ended Oct. 31, 2016. The company has earned $7.80 million, or $0.14 a share in the quarter, compared with $38.80 million, or $0.68 a share for the same period last year. On an adjusted basis, earnings per share from continuing operations were at $0.51 for the quarter compared with $0.55 in the same period last year.
Revenue during the quarter grew 3.55 percent to $1,322.30 million from $1,277 million in the previous year period. Gross margin for the quarter contracted 76 basis points over the previous year period to 10.90 percent. Total expenses were 99.18 percent of quarterly revenues, up from 97.09 percent for the same period last year. That has resulted in a contraction of 210 basis points in operating margin to 0.82 percent.
Operating income for the quarter was $10.80 million, compared with $37.20 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $61.50 million compared with $69.40 million in the prior year period. At the same time, adjusted EBITDA margin contracted 78 basis points in the quarter to 4.65 percent from 5.43 percent in the last year period.
Scott Salmirs, president and chief executive officer of ABM Industries, commented, "I am extremely proud that we continued to execute throughout a year of significant transformation. Our entire organization will look back on 2016 as a pivotal year, where we accomplished all that we intended and set the stage for continuing acceleration. We remain committed to capturing greater value for our shareholders, customers and employees."
For financial year 2017, ABM Industries Inc projects diluted earnings per share from continuing operations to be in the range of $1.40 to $1.50. The company projects diluted earnings per share from continuing operations to be in the range of $1.80 to $1.90 on adjusted basis.
Operating cash flow drops significantly
ABM Industries Inc has generated cash of $83.50 million from operating activities during the year, down 42.96 percent or $62.90 million, when compared with the last year.
The company has spent $134.80 million cash to meet investing activities during the year as against cash inflow of $90.40 million in the last year.
Cash flow from financing activities was $52.60 million for the year as against cash outgo of $216.90 million in the last year period.
Debt increases substantially
ABM Industries Inc has witnessed an increase in total debt over the last one year. It stood at $268.30 million as on Oct. 31, 2016, up 69.81 percent or $110.30 million from $158 million on Oct. 31, 2015. ABM Industries Inc has witnessed an increase in long-term debt over the last one year. It stood at $268.30 million as on Oct. 31, 2016, up 69.81 percent or $110.30 million from $158 million on Oct. 31, 2015. Total debt was 11.76 percent of total assets as on Oct. 31, 2016, compared with 7.35 percent on Oct. 31, 2015. Debt to equity ratio was at 0.28 as on Oct. 31, 2016, up from 0.16 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 4 for the quarter from 14.31 for the same period last year.
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