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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Scott Salmirs

to respond to the pandemic. Again, these few examples only touch on the many, many instances of ABM fulfilling our mission of making a difference.

As COVID persists, I continue to be inspired by how our team members face adversity with commitment and pride. These results don't happen by accident, they happen through dedication to each other, operational excellence and strong client relationships. Now, what do these results mean for the full year and beyond? As we stated in our release, we feel it would be imprudent to attempt the guidance outlook at this time. Recent events have redefined the concept of uncertainty and clients are still determining what the next few months will look like for them and we are also unsure of how close it will play out. Dean will go through detail on some of the assumptions that could be considered at this juncture, but understand, information continues to come in daily and we are still in a very dynamic period.

I mean, more to the point, as I mentioned earlier, we saw top line trends improve throughout the quarter. Is this encouraging? Absolutely. However, we can't ignore how recoveries, reopenings and resurgences are still at different stages across industries and regions. We are not at a point of sustainable clarity when it comes to questions like how long the schools remain open or closed, how quickly will air travel start returning, will there be a COVID spike this fall or winter and what does that mean for office reoccupancy.

And the diversity within our portfolio means there could be a variety of outcomes as well. Look at the variance between industries like aviation versus technology and manufacturing. As one sector faces headwinds, the other is remaining strong. And headwinds don't necessarily mean lower profitability. Our variable cost structure especially with fixed fee and performance-driven contracts have been a particular strength for us. So a lot remains highly unknown and not necessarily linear to results, but more than ever, we appreciate the diversity in our portfolio mix.

Longer term, we firmly believe heightened awareness of safe and clean spaces is here to stay and we've continued to invest in our EnhancedClean program to meet our clients' needs. Our EnhancedClean program is a three-step approach that delivers healthy spaces with a certified disinfection process. We have an advisory council consisting of internal and external leading experts in infectious disease and industrial hygiene. This group will advise us on so many different aspects of ABM's business going forward and provide significant value to our clients as they return to their spaces safely, navigate change and deliver assurances to their employees, customers, and the public by demonstrating trustworthy cleaning and disinfection.

During the quarter, we formally kicked off the first wave of our EnhancedClean deployment plan targeting our top clients and educating them on this unique offering. This will be a cornerstone for sustaining some of the higher margin demand we are currently seeing. Client commitments are spanning terms of