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

Sep 09, 2020 • 08:30 am ET

Previous

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

Share
Close

Loading Event

Loading Transcript

Q & A
Executive
Scott Salmirs

of the office building or to your head of facilities and them saying, we're back to normal, there is no more virus protection, right. So we think -- I think that's going to be completely embedded going forward. And then even as we restaff the buildings, we think we're going to find efficiencies as workplace expands. So we are truly optimistic about our ability to kind of maintain the margins in that 5.5% to 6% range. And then the big question will be, do we break out past that 6%. And from our perspective, it's just too early right now to determine that.

Analyst
Tim Mulrooney

Okay. Good color. Thank you. Sticking on this subject of EnhancedClean, in your press release, you kind of highlighted, hey, we had a lot of higher margin work in the quarter. So my question is -- and now I'm kind of thinking about your B&I and your T&M segments, how much of that higher margin work was emergency work and how much do you think is kind of here to stay? In other words, how much of it do you think was one-time tag work versus the longer tail EnhancedClean type work?

Executive
Scott Salmirs

Yeah, you may not like this answer, but I have to tell you, it's just too early to tell, right. I think generally speaking, March was the month which was part of Q2 where there was a lot of reactive work, right. I think -- I think for this quarter, it was more programmatic in the hope that it would create safety and people wanting to get back. I think the real test for us, Tim, is how much of this will be embedded into the future. And for us to hit the $100 million sales mark in EnhancedClean -- remember, EnhancedClean is different than work orders. EnhancedClean means, I want to put a program in place, in my property for six to nine months, right, that's kind of been what it's been averaging. And so we think it's the tip of the iceberg. Aspirationally, do I want to see that double next year? I do.

So I think the big thing is that virus protection is here to stay, and whether you're an educational facility, whether you are an airport, or you're an office building, you can't move into the future without a program that's going to make people feel safe. And so we're optimistic, I think it's a little early. I believe, by next quarter, we'll have a probably a better window into how much of this we've gotten embedded into kind of that six to nine month range of EnhancedClean.

Analyst
Tim Mulrooney

Okay, great. No, that was great answer. I think I understand how it's laid out now. More of it -- more EnhancedClean type work this quarter than last quarter. So transitioning some of that short emergency tag work into the longer-term higher margin EnhancedClean, that makes sense. If I could sneak in one more -- one more, Scott, because I really wanted