ABM Industries Incorporated (NYSE:ABM) Q3 2020 Earnings Conference Call - Final Transcript

Sep 09, 2020 • 08:30 am ET


ABM Industries Incorporated (NYSE:ABM) Q3 2020 Earnings Conference Call - Final Transcript


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Greetings and welcome to the ABM Industries Inc. Q3 2020 Earnings Call. [Operator Instructions]

It is now my pleasure to introduce your host, Susie Kim, Vice President of Investor Relations and Treasurer. Thank you. You may begin.

Susie A. Kim

Thank you all for joining us this morning. With us today are Scott Salmirs, our President and Chief Executive Officer; and Dean Chin, our Interim Chief Financial Officer. We issued our press release yesterday afternoon announcing our third quarter and fiscal 2020 financial results. A copy of this release and then the Company's slide presentation can be found on our corporate website.

Before we begin, I would like to remind you that our call and presentation today contain predictions, estimates and other forward-looking statements. Our use of the words estimate, expect, and similar expressions are intended to identify these statements. These statements represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in the slide that accompanies our presentation as well as in our filings with the SEC.

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

I would now like to turn the call over to Scott.

Scott Salmirs

Thanks, Susie. Good morning and thank you for joining us on today's call to discuss our third quarter results. As you saw in our press release, we reported revenues of $1.4 billion for the quarter. While this represents a 15% decrease versus last year, the aviation segment contributes more than half of that decline as you probably expect. Excluding aviation, revenue was down less than 8%. In addition, we saw trends improve as the quarter progressed across all of our other segments and we saw another record quarter of pandemic-driven work orders, particularly within the Business & Industry and Technology & Manufacturing segments. This offset some of the scope reductions that occurred with client disruptions and modified operations due to reduced occupancies.

We also expanded with key strategic accounts and other essential operations such as manufacturing facilities. Even within Technical Solutions, site access improved as the quarter advanced and we were able to restart churning through our strong backlog. So revenue has been resilient for us, especially when contrasted against the reduction in commerce during the quarter. And because of this dynamic nature of how our direct labor is structured, where we experienced scope reductions, we aligned staffing to match the work. This preserves margin and can even enhance it as we find efficiencies through labor strategies and other tight controls.

Our quarterly performance also reflected some difficult decisions we made early on to prepare us financially for the uncertainty of the pandemic, which was right in front of us. At the beginning of the quarter in May, we