ABM Industries (ABM) 6 Jun 232023 Q2 Earnings call transcript

Greetings, and welcome to the ABM Industries Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. President Relations Vice ABM Senior Goldberg, of for Investor Industries. Paul you. Thank

begin. You may

issued the results. of welcome Good me second Chief is Officer; and My I'm note Call. morning, release today accompanying Paul that copy morning, and our we Vice to and our Second our quarter everyone, Executive and the are ABM's Please Scott earlier our website Quarter President announcing financial Officer. ABM. Executive Relations our Chief Vice Investor at and release XXXX Salmirs, Earnings Goldberg, Financial Earl slide Senior With President A be and name President of presentation abm.com. XXXX press found this an can on Ellis,

the After to Scott contain statements. Q&A would begin, you before remind predictions, forward-looking and and like I we estimates, Earl's But prepared presentation host our will session. call that other today and remarks, we

and represent words, Our judgment intended they and holds. future expects, use to the statements similar of our what expressions the these are estimates, of current identify

slide as believe uncertainties filings While and are accompanies the subject are statements inherently be These results in these presentation our SEC. differ reasonable, risks factors described the to our our materially. could to to well cause that as them actual that with we

presentation call, During is the measures on financial will be end the available historical tab. the financial and non-GAAP and under at this course GAAP the the presented. of non-GAAP of information certain company's A numbers, Investor reconciliation the website of

that, over the call to I Scott. now with would turn And to like

controls, to We results quarter Education strong in price revenue segments. ABM escalations, and driving delivering discuss our growth and adjusted the X.X% and cost manufacturing thank you organic implementing and Aviation, second focus through generated Thanks, EBITDA second for results. in Distribution, all us morning, growth. on consistent and these Paul. today quarter, joining organic our achieved Good solid growth results our

real continued market, challenging office orders, estate. lower impacts supply than recovery work from offset commercial labor These a and the factors the for chain more of still slow constraints, occupancy

operational performance as $X most our financial the the quarter. of of our which last included from team. quarter second EBITDA of margin revenue with project Our to adjusted and discussed parking generated dedication talent an diversification, our end benefit ABM and billion, speaks In resilience importantly, the the of all, prior of model, and X.X%, period business market earnings

our a macroeconomic Despite more than XXXX goals. on we challenging we achieve target anticipated, environment remain to financial

many focused to company before us. across on We capturing opportunities growth continue the of and share driving the be our

first in we months the fact, from $XXX XXXX, for of generated up million $XXX six last In new million sales, year.

also initiatives, future which invest our an in and improved operational experience our our clients and team ELEVATE our members. to including efficiency deliver continue both enhance will for We

each for demand discuss environment groups. industry now the I'll our of

B&I. rates at XX% quarter Office Let's a blended second on relatively density in the approximately begin remained at with stable levels basis.

This pattern well to trend certain Although density. gathering like usage work elevator work and cleanups, large freight Tuesday are employers hybrid Monday continue for driven of remains to space demand cleaning, continue office This by and as accommodate which many work. higher-margin employees Thursday, and Friday. commercial office office largely on is through fairly carpet remotely service, likely remote limits occupied orders

when markets As their consolidation of we a reduction space footprint see result office of reduce office their a as density, clients expire. to leases beginning metro the are in in

on create yet additional anticipate of vacancy pressures contraction not experienced a our rates could further we and that have we business. increases Although in scope resulting work,

Class A newer we're which However, well concentrated we feel real that positioned given is heavily our profile, very commercial estate properties. within

a than properties. C much impacted, buildings are Class B still it's A Class Although to and degree lesser Class

on stabilize towards that buildings, tenants believe our as higher quality will it also multi-tenant migrate We portfolio.

real commercial need estate occupancy our more density. sizable which a be of electrical stable to and an exposure systems regardless to of engineering, as maintained is Additionally, be HVAC tends portion

the in travel as anticipate will related travel to we Activity business be growth our new go aviation Aviation. reflective complemented forward, we to the returned revenue leisure levels. markets, transportation and Moving overall pre-pandemic including Accordingly, by has parking essentially business opportunities. growth rate and of market

fact, In U.K. a we won transportation multimillion-dollar expansion two passenger of at airports. recently major services

in travel enhances which parking also and experience. We the our solution expect growth improves for clients continued Vantage revenue ABM

from logistics new new only in and but continues and be clients Demand benefiting distribution manufacturing existing business e-commerce solid, also and to end expansion from not within markets.

the contracts in For second example, in quarter new we in million semiconductor the over alone. market added $XX

with broaden to highlighting We company. a growth also aerospace further our in client attractive base efforts leading saw markets. our successful end

remain growth of revenue segment to remainder expect for the on in our the M&D pace year. We

Education, the of of drive the fiscal mid-single-digit in addition sizable organic in and clients business In revenue fourth new in new quarter year XXXX this helped has segment. this wins growth

our confident given further We trajectory positioning. a ABM pre-pandemic will continue perspective, support positive market have and a growth that I'm strong remains will our normalization anticipate margin margin segment the achieved. and we margin business we've labor new of From competitive pipeline above opportunities, levels, progress

start which enhancements. demand Technical HVAC and with business by contract EV a building macroeconomic exceeds to win are for Western district market as charging multiple for Infrastructure the infrastructure The well conditions to upgrades backlog by ATS environment as slowly microgrids Pennsylvania, evidenced in Solutions as million. after $XXX lighting as our Furthermore, a includes improving for a significant school concerns, our year, Moving and remains Solutions. positive slow hampered

eMobility. to Turning

a completing automotive of programs, including $XX the multiple to second As resiliency approximately deliver we million a for network. discussed charger the call, and projects, on consumer generated major second retailers to one multinational in several pace accelerate goods our large we begin expect in as revenue, power quarter new dealer on the company. including to last installations we half of year the installation EV two RavenVolt systems of

half to excited we the about of back accelerate growth. the for of outlook EV, strong the beginning believe long-term to we're will at be this runway a as to ATS what Overall, we begin multiyear Similar materials in year be continue to of and long-awaited expect arrive. growth

this In to area plan leader that hub. growth electrification and facility electrification creating of opportunity, the clear will multiple house electrification The EV the first eMobility, Atlanta kind fact, support recently establish in announced center infrastructure we serving ecosystem planned our construct resiliency, in power turnkey ABM an as will to solutions. solutions the sectors, it's

second significant We quarter, system ELEVATE. headway planned and during deployment Turning the systems. XX to our including initiatives cloud-based the of boundary our successful initial integrated on made ERP

on the focused and Education Our have than been segment initial results more implementation encouraging. our

programmed each leverage we on and implementations pace a will collective as industry segment and through managed As we progress forward, future our learning move experience.

advanced for In estate of provides their productivity and the across productivity reach commercial capability workforce in levels markets. analytics addition, This portfolios. our we has tool, which usage critical real teams our with for been labor our extended optimizing optimization

launch approaching also a application are for our enabler a pilot the the members, ELEVATE We of mobile program. team frontline digital new for key

to on journey. continue progress we ESG our Lastly, make

on our time, our be mixture macroeconomic to markets the in distinctions The despite and is our the Inc. proud will of resiliency challenges of Diversity This, first continue of accelerated estate. our ABM our of and and among lead DEMI. many commercial company teammates the talent to our the named and has culture allow to culture away headwinds the I other reflects been in end drive us real couldn't path. For list of heading awards, where companies our the extraordinary noteworthy

over Now to the it I'll turn Earl financials. for

Thank good morning, everyone. you, Scott, and

please to For earnings our Slide X. those presentation, of you turn following along with

$X to comprised increased of billion, X.X%. growth X.X% revenue growth Second and quarter organic of of X.X% from acquisitions revenue

Net of X. and respectively, in was share, to income costs, in segment, Slide by higher-margin and to income higher driven or in expense $X.XX compared from was year. expense, tight The especially partially lower last Aviation second quarter interest offset work per income orders. X%, and GAAP $XX.X labor million by on Moving up operations, the net controls higher diluted increase X% as our volume

income diluted Adjusted at the from adjusted period. net higher per up from cost million, net primarily was reflects interest offset and X% operations by adjusted flat income $X.XX, expense. year and prior was Adjusted controls higher share EPS effective income earnings $XX.X

$XXX This parking X.X% X.X% Adjusted EBITDA of prior previously prior by periods. recognition the the million, increased adjusted over margin recorded associated expenses year year. with project boosted versus to as Aviation mentioned was was and connected XX% last in performance revenue the EBITDA were

the margin impact EBITDA from over X% was Excluding project, was X.X%. adjusted adjusted parking $XXX.X up the million, year, and EBITDA last

year. operating Operating Organic essentially reflecting X. to disinfection revenue declined and orders, Now margin Able year profit of versus revenues turning mainly volume expected X.X%, the of results from a certain to was billion. $X beginning million, work to the in client on our contracts X%, with prior X.X% flat segment $XX.X prior and declined Slide B&I acquisition. B&I decreased slightly attrition including lower the year-over-year

Aviation year. This project, $XX.X earnings margin improvement eighth XX% by prior versus revenue Adjusting mentioned related XX.X% parking in growth. marking Aviation's growth million, last consecutive was was the operating million project increased activity. of the compared previously project was $X.X to operating and traffic, revenue for as X.X% profit parking in leisure of driven as revenue parking $XX.X million and was parking including the million, million $XX profit to period. of the increased $XXX.X well airline business along recognition with the year-over-year quarter was X.X%. Margin

and grew The labor in Manufacturing Education with the XX million, margin to X% to to million, X. addition million, of in X% expansion sciences increased favorable basis mix. and and semiconductor fiscal points of benefiting the revenue Turning inflation reflects demand clients decreases quarter primarily in in clients new $XX.X and profit margin to market. Slide changes operating the $XXX.X and from XX.X%. operating XXXX. life market and distribution X% fourth to profit decreased Operating revenue declined reflecting cost $XXX.X

driven million, Technical revenue operating the from slightly to the our essentially down $XXX.X and half projects. revenue versus the the to delay programs, year Organic due which X%, was while charger profit XX% to of second X.X%. solution was year of contribution margin timing grew Education the the to RavenVolt. $XX.X installation weighted period by some largely million, prior of flat large are declined EV infrastructure Solutions

$XX.X in amortization was delayed $XX.X operating for the operating of by $XX by margin and Backlog over related were generated second strong and to back quarter, X% in the profit of driven and a million of is aided revenue decreases The million, last was compared X.X% RavenVolt mix expectations in note, and the supporting margin RavenVolt profit acquisition. ATS changes in intangibles nearly receipt our million, of year. service ATS’s materials. largely the $XXX margin of year. Of in profit half million to the

adjusted ended standby million. in times. EBITDA ratio including $XX.X credit, of billion, cash X. $X.X debt on We in million, QX, a second Moving had forma Slide and resulting to the total including of million debt cash we end of of with X.X available total the of equivalents $XX.X to $XXX.X liquidity pro At quarter letters of

the flow cash terms and second from was was increase of in $XX expect The million, in $XX.X from million over we debt. of total Interest the $XX quarter, rates the $X a higher sequentially significantly second in was as to in interest solid million generation. free period up increase million cash and year-over-year year prior as QX. quarter well due back year the expense Free up half a

from driven fair shown Now expect comparability, $X.XX let's $X.XX, by range from the EPS value outlook, move in GAAP the on to consideration. benefit our as our prior in outlook, full-year XXXX to contingent related now be We primarily a up Slide to items $X.XX impacting XX. of of to changes on fiscal

the $X.XX. remains outlook unchanged $X.XX to EPS Our adjusted for at

for curve. to of yield million and $XX range. estimated previously now expense Interest full about is actions above the This the around reflecting $X high expected end Fed million forward recent forecast year, the is the be

XX%. last Our items full-year at mentioned is to we grow to quarter, a and anticipated between rate expect tax XX% rate. mid-single-digit discrete adjusted be EBITDA before as And

segment XXXX now X.X% end free it to range and cash between decrease range and of $XX million represents CARES the full driven capital our million are Act combined we $XXX XX flow for before increasing expect million, our adjusted by now to in to QX needs second EBITDA payment of made the the year. installment million. interest million higher of expected expense. growth be X.X% Additionally, largely to in elevate We basis $XX in integration $XX for cost expect low of This $XX to ATS and approximately which of full-year the the and prior from half final $XXX support a the in be points. forecast, working million margin and our was by

of be adjusted guidance. half be per cadence with XXXX. consistent in the the adjusted materially EPS, year. to quarterly We With the of from our of full-year we different generated XX% to respect QX XX% earnings fiscal first to EPS not expect approximately share anticipate adjusted QX will prior

With that, let for Scott closing comments. it turn to me back

target. XXX achieved at basis goals, Thanks, And In it blue-collar points time has financial rate the pandemic inflation these late XXXX service Earl. Despite U.S. X% for Today, higher. average was market X% to our has rate from towards delivered over rate is labor XX-year our close full the and progress ever our and XXXX trended announced T-bill and expanded initial X%. as we XX%. been. on year the is the is X.X%, was business X.X%. our offerings, XX-year XXXX, around the down Inflation important The high unemployment challenging headwinds, for peaked XXXX targets, in and job ELEVATE T-bill the to of the currently as approximately we've

Today, ever better ABM positioned stronger before. and is than

success resilient and Our ELEVATE benefits consistent the our from model, reflects our by business ABM investments, team. the execution

As tirelessly business achieving towards ABM we value the higher-margin our confident continues by goals, ability for build strength provider. to I'm our our into move we to of our as higher-growth, evolve in solution core facility stakeholders a work underpinned forward,

let's with take So, questions. that, some

[Operator Instructions].

Capital from question. question with Markets. of Eastman KeyBanc comes proceed first your the with Our Sean line Please

Thanks, my for taking question.

just on sounds customer So, ATS. macro conditions. to on weak half just how is charging now. and round second wanted discussion on RavenVolt going start with pace It I piece energy like just light ramp. that a for I and blowing wanted out trending the is in EV bundled the solutions a to side sounds It like of the decision-making

of a even about offering. or Look, seen the or it's question, share market of in It's pause of but the fact still pipeline more in remarks, opening get that's board, a the the are a -- challenging my in mentioned won than right, reflection we more mode just No, it's rates. great really like, And we in Yes. that nice economics But across the Western probably strong. slow, not interest right Sean. job because little segment slower our now, clients bit pipeline sales we've won some Pennsylvania. the a just viability I that is what we'd

because school it know clients needs it, they think the trigger. for of trigger the at question it's facility retrofitting to if a the of together us, for look you and giving I So, right, to pull you're core pull that the retrofitting, it's waiting high a getting because upgrades board they need the that right? So, sign

but as hoping we're delay little half as a the ever. back will more be confident It's bit stronger. So, side, we're just on the

where on we the diversified. also we And don't top underpinning. the ATS about now RavenVolt, and but with as nice lot, still is And business solution that's that's mechanical a starting EV part a about in to a solutions, because to that, And addition of of point our talk thing bundled you do have out, up. electrical we're the energy we core microgrid ramp that have

in So, it's segment. that diversification nice to have

And for we've for expectation run to Thanks Okay. on I'm the get on chain, up project Scott. mean should I timing, ATS. of a the had it kind for then pocket. mean, maybe margins I everything an is finish where guess trying that to half, just when we've off rating be? be where should ATS. first Obviously, supply air I had we planned just

that right? And high it's it's when no get that. humming, to reason it won't single there's back Historically, Yes. digit,

kicked you scale. just more put not orientation a EV, the twosies, a Sean where want, is stuff, are like and the get the playing and been we go dealership like if bundled which large-scale I It's think the lower you're we you is and it's microgrids like haven't right? in with facility yet, higher-margin energy per to because XXX even which scale three have can solutions contract in that the moving said That's fleet or automaker And is in charges dealership. margin. an in to onesie, two like ones which the that really we're market, a BMW, putting we've

part our well. ramp-up of as strategy So that's

So, squarely time that back confident high margin I'm over we'll single-digit into range. get

below more, to relative now over normalized. And going we're you. been like step What feel maybe a in there's whether Got there? historically margins and I the vacancy work normalized level dynamic, orders. pandemic Okay. terms that, think work the How order and order then to Scott, two just to like one of down lighter having we about we to down years, around we've rates from risk highs -- from talking normal work seen orders But some that about downside. past have should anchored work

Yes.

a down think I of we're look, levels pre-pandemic and to reflection that's now work. getting back So, right really hybrid

way you you give a the from elevator having right? will this to furniture they're here's it for ranges They're freight because So, think calling people work the orders, think celebration. about, right, about getting some maybe clarity, birthday deliveries. When

want party. they having up It's on spotting porters a two because they're pizza to staying So, carpets. come

a all the five Fridays we're by you office Mondays week So, those on when and the higher a we calls are during really were three those and were and a and still things, that. get in onetime less instead people stabilized week, rate we of encouraged of days now hybrid than days at pre-pandemic,

overlay the what state that's watching is it the spending. the they're brought down are just think People now of I incrementally economy. more

overhang. that's think a I So, little an of bit

back up have into pre-pandemic to up the orders pop again when levels. we a than will future at recovery, again higher pop to willing So, work bet that I’m if I were back and look

just percentage not on question, basis, more temporary to see think double round to much I have we're overhang think out this I a the going now. But we So, deterioration. do

maybe not be revenues where are stabilized. volumetrically little bit, compressed Now, we now dollars, that we're but of like kind on margin of percentage. be because a -- can pretty kind feel I will is

thanks. Okay, turn I’ll over. it it. Appreciate

next the Baird. with Justin Please comes Our Hauke from of line proceed your question. with question

despite ask incremental I little just to the clarify wanted up and guidance good the to despite Hi, big pieces margin morning. held -- with moving of the kind bit expense. the moving a because interest picture of EPS some the

specifically, was And of pieces moving bit the which control, the that's little little bit continued cost kind better like a and that. to on What than maybe corporate come in a little Just better a bit it seems weaker? expected.

the for just corporate what maybe you're of So at outlook the year? for for looking back the half

Absolutely. I'll Sure. that one. take

when in look the headwinds the we we in which So, actually work to as well happened continued at of margin X, the throughout lower in pressure market. labor continue had kind what shape a of as some see dip quarter orders, has

So, of When continued able that. good labor news to looked to through we've able offset was project, see majority at quarter, the the a that see we've inflation, that flow-through parking to -- year's is price last also we from large been which offset escalations. we had

when margins, in parking. call part actually the up flow-through of actually that was the And you got from so, deferred at the look we previously that

margins X.X%. margins, back good were spite so we out of what flow-through able -- last of quarter parking year, challenges really the seeing we're in actually for the continued in you about we're even if feel from the our project that the So, that still is

still pleased challenges the in of we're continued that deliver range. able actually within really, feel so, being to of And the we that midpoint really we're our spite seeing,

the just half the thinking back expense, you're dollar year? Okay. maybe run what kind the of rate, of in And a like corporate

Yes.

look the impacting expenses, that like an I excluding items that expenses, about -- say corporate when the of the $XX at expect in would -- say million average over kind comparability. of would corporate So, we you I

even And mean then second guess parking on just question, Great. the backing the here. I out the onetime segment. I

it expecting trend of market Your when like organic prepared I that maybe rate growth rates just kind about want kind kind of you more is the year? that and you're trends. segment? the by back What talked there to in remarks decelerate of strong. what of for sounded understand for what the you're to have that half you growth been And really about your that mean of market the thinking

from generally think parking Sure. hybrid work look, I mean stable standpoint, are like Like speaking, is I revenues of place. industry an kind in now. I think

it both commercial of our stable. segments, we what have pretty is parking then two it those real aviation. in like estate of The kind business segments, us, So, is. side, the because I in And real -- on key estate for and we’re think

productized we and to is So, new it. it I vantage it's more help we're about really excited is management to now. clients technology, it's that's insightful, -- to something help for a what But that's give offering us, revenue accelerate us offering, parking our going think have on which about normalized insights it's works this it's so new

we're we we're stuff bit a that the parking of that some of say ahead business little a hoping in in not out grow, I of back the hopefully we're large the stabilization an segment, walking measure doing. industry. continue to of do But, So, because as but kind only market parking innovative the would

apologize. low of more your and recovery I deceleration digit, is what of rate just are about that? I for has aviation I and in adjusted or? been aviation digits. parking expectation saying so single was Or the first recovered volumes what there asking the the is, half? you're growth the from those why item, moderate the Is I in in kind high to meant now was the single strong your And for should segment more it that and kind the they guess

well, around up. That's right. right. you has been Travel That's travel know, been Anything has right. and leisure so exactly

in do a that bunch little then some. are maybe catching in like We and pre-pandemic people levels of prepared there's say we this to I we So, up, I bit think back a think we at remarks, think and feel point, are the of did terms even travel.

stabilization a So, but more you'll nice I see growth. still of think steady

Great.

you very thank much. Okay,

Please with line the with Deutsche next comes Our Bank. proceed question. from of Faiza question your Alwy

I the solution morning. technical up business. on wanted good just side the follow of to again Hi, Yes.

mentioned million, recognized expecting that Just project that of have through, do walk So, of on with through year? you you you to the this those all And delays? a project expect the backlog when of what's timing revenue you us are that as us projects? $XXX walk fulfill will going be

no. recognized all be will this That No, year. Faiza. Sure,

always speaking, it, ATS story. general in typically the color school lot has work been back in a And of put the So half year to we do around some of just systems.

about August, that think So, schools aren't occupied, the fact July K-XX. in especially and the

So that's the time that you go in, and work. you do a lot of the infrastructure

is So that's of lot why a this loaded. back half

backlog So, that get signed initiated. contracts again, for us, means,

So, and in a really of lot to QX more that's happen going QX QX. QX, than

that will initiation. And the be

a So, strong in of even precise it's be think XXX But I much we through of -- exactly at QX and they QX a have can't year. give it's into it ramp initiating as bit you will backlog that how But little that in QX. projects sign the a really level. and

it's I to are kind oriented? it supply it is today because that it under just maybe of demand the clear then more -- supply Is related. I'm leading me of delays the demand-oriented. And more to… related. it's are more on was that Or was Because some comments But believe Okay. your more ready so side, impression the

of energy a switch the about on Faiza, demand a combination on supply of and the actually some the little bundled all No, microgrids, the gear. it's sorry [indiscernible]. chain. it's And specifically, on side It's bit batteries solutions both.

you of the no, now the order weeks call it's our taking what like, that's and is you'd from in maybe you'd the then beginning to "Oh, no, Now, because industry. then encouraged some something later, we to something again, item, happen And then would this competitors starting XX and the and XX see now. weeks. was I take go for now XX happening, for all It's of weeks month the taking would weeks. At another stabilize key what And like, a us. you get think get year, manufacturer, to and it's it's XX would are the

weeks and took pre-pandemic six XX. taking now something if So, it's

it as seeing can planful, it stabilization. XX, long you could As stays taking be manage we're you and around that

of robust. majority oriented. has especially been not the definitely really supply on oriented So, the the is pipeline chain really, demand RavenVolt problem, side The

Good. Okay.

Sorry, little on so want that -- up I'm why revenue. is the just impact it RavenVolt a side, to if just unclear, because wouldn't your I organic follow that's

what's explain me of little decline bit more organic a to driving the in revenue? So, in terms

Yes.

let's pull out -- just if RavenVolt a second. for So, you

segments with bundled a both big solutions. is for EV dealership, now different two just because EV there. down demand There with and there's automotive of So, big And are up we're and we core ramping there's those were energy reasons, the company. a project an And more side. winding project

So, you're seeing that half. delay to the back

So that was not timing, just timing, supply chain timing. but demand

is I they're aren't doing bit. pulling general see starting but And a backlog, up But we is one few bundled the pause. book, just a we're fact trigger energy what the loosen again, because solutions, clients the other which which about ago, orders that is seconds really talked that the have to a the we have

what decisions. And you to that it those the are start rates stabilize. I thinking think market interest making if starting is Now that is is, it then

on the if all can I detail. maybe thank on indulging me up Got you follow just And the then it. Thank initiatives. for you, ELEVATE

us sense of that being a of forward? we a a state ago, about mentioned some thinking I to talk are about getting what know maybe things. thinking next state, there? few going how that You you've initiatives you're of expect you're about about how couple should Give the the timing years talked end end

ago, which the really landing industry ELEVATE. month on group big like it had the successful implementations in will we we that's of than group, now terms ERP look, infrastructure And doing core ERP we're Because and our literally early transformation, just mean, track I with Sure. the which is of a next even launch went and next our year. group are by two-year industry because better are And well. a and it always expected. bumpy gone education it's way our happen we're process,

infrastructure the hope. we and better going side is track So, on than

hyper in progress. other are We sales growth. And for things launched then targeting all

prepared the remarks, we You saw six the unbelievable of year heard or months had new sales. first in in -- of another

reflection team tool. only So is our hyper the efficiency not of of the just our terms field. the targeting in create management piloting that's of our but we're which going sales now And workforce culture in a people, to

people, we're time And our the in application be to to digital And connecting which are it month, real probably get is a us longer for journey is Connect, to deployed in actually not releasing to changer us. as real But, which XXX,XXX is that this game the things as field, if a XX-month people out ABM going planned. XX- across to our imagine. you going even start can

-- sense we're can So, the you enthusiasm. hopefully,

so you Thank much. Great.

[Operator Instructions] Silver from comes Associates. line next of David CL Our with your Please King with & question question. proceed the

you. compares you morning. mind this Hi, of you to on kind quarter? then you you I value Thank maybe how discussing contingent change just like to RavenVolt And wouldn't you. to bit performance your of Could it or the to booked Yes. would drill the I'm consideration. And how about make initial to little performance noticed of a wondering the business that expectations? drove date. talk to just the in particular, what fair adjustment -- if good if maybe aligns Thank down I you maybe

Sure. part RavenVolt. We're as of about as ever take the I'll first encouraged it.

than compelling is so so more is the the and phenomenal, even now. are because, probably think backlog phenomenal. did the transaction team I we And microgrids right

our half for the But light even disappointment, we word to you if because the accounting think in it's And I'll facing. that. the that end his is But just same we're chain of industry I and tunnel, hoping can't treatment the the Earl talk at back it's a year. that's a any control supply use -- and to wheelhouse. let in everyone thing want I the again, level there of So, was strong don't see

you take Earl, So, away. can it

Sure, Scott.

a just So, on quarterly at positive very valuation the as look do basis, deal on mark-to-market we model. consideration. on the outlook, the And mentioned, when still we we're contingent a Scott

chain that discount would which that, that as GAAP of which reduction high we in timing the articulate deferred on and with the liability. of in based one revenue you just However, in discount into back this a has earnings actually challenges there's then the then rate, some some And have years. then in accounting resulted happened supply to regards timing, year actually actually future

I it opposed different anything value from basis. So timing up really as would to chalk to case again, a

appreciate what wondering of be office in the that. where, other market, you My of bit. kind to commercial about. more That's be I you. quite a question Thank would I was targeting Yes. which kind about the seems news market, the

two- changed. or could right outlook. certainly wondering maybe I has other kind is up I'm think whatnot the Scott, would office the it words, In saying -- multiyear if share you outlook, front. what we're maybe You three-year and for just a of tenants the and addressed a you if But motivations market

area, to or you're take -- higher share in of have yourself that offer And keep for to a bundle growing to I'm guessing going services. higher-value

your work or with position hybrid continue the to your of kind grow necessary towards continued, your into in from your perspective, lower remote So, to will trends offering and mean, or grow, there? you be grow kind what profitability of proposition and guess, value order deal commercial kind maintain share, current in work your in occupancy for I I to your in Thank arrangements ideally evolution the market you. of rates

Well, Sure. estate. pretty be pressure going obvious. to there's in commercial real listen, That's certainly

order we've economy. the so hybrid really For the only of mentioned, around and us, side work it's because far, as been

density, revenues drill ABMs but have our are is So, And insight around portfolio engineering when into in parking. you in you matter business, And of the that electrical still in parking, may we doesn't the stabilized. as really that, those is, said, a B&I, and basement, need is the stabilized depending dense you it David, on doesn't "engineers" forget to not don't this, working down floor change. the B&I on or third how because and mechanical office

So, exposure. some that the has you're about piece really the talking janitorial of

if B predominantly But then and portfolio, those absorption migrating A into best buildings, as the anything, have are buildings. and bigger Class are rather buildings, the tenants at and look the we're and to Class newer seeing we C A market buildings compared going that positive C which are survive ABM's because we've to rest buildings, seen you of way from B the ones

A to next build tenant in space, quarters, pretty has protected. will there's or us, their for question space. a buildings It no next the So, choppy I expire going as think year Leases to be even they come for about several in, little to it. the a less we're they're so and have take

manufacturing been be there'll don't in And So, is and some we're mitigated a choppiness. because ATS, investing for have. think, But again, as another again, like whole, so we're we which I end markets distribution, us. portfolio hedge diversified. of the forget, We've that

would help real in David, targeting mitigate lastly, just to say I on ELEVATE about of the the growth think the you investments just market. estate -- what the side then hyper for is general in some compression and And us

actively closed think when So, We've closed of downturns and can in B&I before things manage at we're accelerated. the and challenges. these doing we schools these segments, airports we I pandemic look some the seen and all the were were even

in is So doing but is in be great B&I, less and may ATS great. aviation now period is talked we about, there a acceleration we where doing as

for just but Thank them. I've an issues. of of ERP one a number on what implementation been you different and that. a history other And companies here, the their quick with of touched been certainly you observer I many have has

know, Just expense? so implementation Or be bit of event this Do system. at maybe capitalized? of it expectations, have rise would treated? that that you that ERP little be above I the point? the sense it Would your Would costs be outlay in a a with extra but

target. We're Yes. right our on

of like talking the looks profile couple not overruns this expense cost at in about We the feel have good what years. sight into good of really next So, we're point. line really and

cost in So, our that's not narrative overruns.

question this Timothy our with the you. Please your final Ladies with Blair. morning line question. gentlemen, comes William from proceed of Thank Mulrooney and

morning. of quarter, good all been But you the Most Earl, Scott, my so last from headwinds gave orders. work this questions I'll keep have answered, quick.

that, normalize. you think expect was said And $XX to I it more million. I think, you'd

wasn't that didn't is if it or headwind us? because quarter, there a can admit you quantify really year-over-year for So, this there you wasn't, if

do Yes. rate It been now. $XX stabilized more million. think this much. talking into again, hasn't maybe We're we're And heading right about I

So yes.

more everything said, where the pleased environment as actually in were acute. the I and economy I that it think is is overall and happening where actually wasn't given that's -- is, this we're hybrid we

Yes. talked that disinfection non-story starting last in QX quarter we anticipated mean, related become of in reduction Because work about precipitates. as kind I orders, I like think was what the which will a QX, that

seeing of alluded future I potential just the Scott free-COVID of with to environment based in regards kind around think X% are about we'll potential on again, which be now, hybrid the headwinds reduction earlier orders what are it where, call what the to in right now that for the really typically at potentially levels, and we're work revenue.

on But higher macro be that of to to back or how X% pre-pandemic to All interpreted of go-forward pulling X%. that's right is comments kind to about headwind order the that look, else thinking there's Yes, earlier it? stuff like, it, Scott's you'd I'm I X%. think expect equal, a way how it basis. of Is kind about that's some X%, work that

right. exactly That's

about before started that with right. the even even the hybrid, we during level. again, would few last were that, And Exactly reiterate in still what economy turning before pre-pandemic I is -- months,

we're of levels. pushed is kind it's seeing of new that control kind back pre-pandemic this what almost So, like to cost us

going that optimistic, economy back we're the we're when turns. get that Tim, So, above to

M&A capital sense buybacks reduce interest at you. burden? that reduction Understood. other Does and times? one you. Last from are to prioritize debt allocation near you me, Thank your to Or comfortable make incremental it guys. things X.X on and term Thank help versus

very things, Yes. paying the our I when we limit doing cash debt cash exposure. we'll likely the both flow, news which feel with like with include to able And be most do small some question. good buybacks. to be we to is of generally provide we strong do Good would When down it's really leverage compensation. potentially talk looked addition our anti-dilutive is our to which our it about going that nature half, net ample limited flexibility share-based share in back weighted buybacks, us share in the would more at flows, to of those But feel

All right. Thank you.

turn I'll to question-and-answer that comments. back Salmirs our Thank concludes gentlemen, you. session. floor any Ladies the for and Mr. final

for thank hope very, the update looking again, and good in everybody just start to a the good is level, start I participating you all appreciate to and to much want forward QX with to everyone -- we're having ABM. summer, it. to back on We interest things an very coming

everybody. summer, great a have So,

concludes call. Thank conference today's you. This

this lines participation. you your time. disconnect may You your Thank at for