- Grew fourth quarter revenue 4.1% to
$2.1 billion, including 3.8% organic growth - Fourth quarter net income of
$62.8 million and GAAP EPS of$0.96 , up 29% and 32%, respectively - Fourth quarter adjusted EBITDA of
$144.2 million , up 10% - Fourth quarter adjusted EPS of
$1.01 , up 13% - Board of Directors approves a
$150 million expansion of existing share repurchase authorization - Fiscal 2024 adjusted earnings per share expected to be in range of
$3.20 to$3.40 (1)
“Our team executed well in the fourth quarter, delivering 4.1% revenue growth and strong margins, resulting in double-digit growth in net income, adjusted EBITDA and adjusted EPS. Our broad-based organic revenue growth and improved adjusted EBITDA margin was bolstered by strong operating performances in our Aviation and Technical Solutions segments," said
"For full year fiscal 2023, ABM delivered solid performance in what was an unusually difficult operating environment, marked by labor shortages, wage inflation, rising interest rates and softness in commercial real estate. Our team successfully navigated these challenges, and our results highlight the advantages of our end market diversification and relentless focus on our clients," continued
"Looking to fiscal 2024, we expect generally healthy market conditions for our Technical Solutions, Aviation, Education and M&D segments. We also anticipate that the commercial real estate markets served by B&I will remain challenged, and that we will be impacted by the reallocation of some business by a large client in M&D. Combined, we expect that these factors, along with protracted labor inflation, will likely keep our enterprise-wide revenue growth rate modest and adjusted EBITDA margin in the range of 6.2% to 6.5% (1)."
"Our team is focused on winning new business, continuing to expand our services with existing clients, and driving operational efficiency through our ELEVATE program, while carefully managing costs. Supported by our leading market position and solid free cash flow, we will continue to invest in our growth and strategic initiatives, strengthening ABM for the long-term while also returning capital to our stockholders."
(1) When the company provides expectations for adjusted EPS and adjusted EBITDA margin on a forward-looking basis, a reconciliation of the differences between these non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See “Outlook” and “Use of Non-GAAP Financial Information” below for additional information.
Fourth Quarter Fiscal 2023 Results
For the fourth quarter of fiscal 2023, the Company reported revenue of
GAAP net income was
Adjusted net income was
Adjusted EBITDA grew 10% to
Full Year Fiscal 2023 Results
For fiscal 2023, the Company reported revenue of
On a GAAP basis, net income was
Adjusted net income for fiscal 2023 was
Adjusted EBITDA for fiscal 2023 was
ABM also released its 2022 Environmental, Social and Governance ("ESG") Impact Report in the fourth quarter. The report highlights progress on the Company's long-term commitments and solutions that enable clients to address ESG risks and opportunities.
Liquidity, Capital Structure & Share Repurchases
The Company ended the quarter with total indebtedness of
Net cash provided by operating activities for the fourth quarter and full year of fiscal 2023, was
During the fourth quarter, the Company repurchased 2.7 million shares of common stock at an average share price of
Subsequent to the end of the fourth quarter, ABM's Board of Directors approved a
Quarterly Cash Dividend
Subsequent to the end of the fourth quarter, ABM's Board of Directors approved a quarterly cash dividend of
Outlook
For fiscal 2024, ABM expects adjusted EPS of
The Company cannot provide a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures for Adjusted EPS and adjusted EBITDA margin in 2024 without unreasonable effort due to the uncertainty of timing of any gains or losses related to, but not limited to, items such as prior-year self-insurance adjustments, acquisition and integration related costs, legal costs and other settlements, as well as transformation initiative costs. Although we have attempted to estimate the amount of gains and losses of such items for the purpose of explaining the probable significance of these components, this calculation involves a number of unknown variables, resulting in a GAAP range that we believe is too large and variable to be meaningful.
Conference Call Information
ABM will host its quarterly conference call for all interested parties on
A supplemental presentation will accompany the webcast on the Company's website.
A replay will be available approximately two hours after the webcast through
ABOUT ABM
ABM (NYSE: ABM) is one of the world’s largest providers of integrated facility services. A driving force for a cleaner, healthier, and more sustainable world, ABM provides essential services and forward-looking solutions that improve the spaces and places that matter most. ABM’s comprehensive services include janitorial, engineering, parking, electrical and lighting, energy and electric vehicle charging infrastructure, HVAC and mechanical, landscape and turf, and mission critical solutions. ABM serves a wide range of industries—from commercial office buildings to universities, airports, hospitals, data centers, manufacturing plants and distribution centers, entertainment venues and more. Founded in 1909, ABM serves over 20,000 clients, with annualized revenue exceeding
Cautionary Statement under the Private Securities Litigation Reform Act of 1995
This press release contains both historical and forward-looking statements about
Use of Non-GAAP Financial Information
To supplement ABM’s consolidated financial information, the Company has presented net income and net income per diluted share as adjusted for items impacting comparability for the fourth quarter and full fiscal years 2023 and 2022. These adjustments have been made with the intent of providing financial measures that give management and investors a better understanding of the underlying operational results and trends as well as ABM’s operational performance. In addition, the Company has presented earnings before interest, taxes, depreciation and amortization, and excluding items impacting comparability (adjusted EBITDA) for the fourth quarter and full fiscal years 2023 and 2022. Adjusted earnings per share and adjusted EBITDA are among the indicators management uses as a basis for planning and forecasting future periods. Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue excluding parking management reimbursement revenue. We cannot provide a reconciliation of forward-looking non-GAAP adjusted earnings per share and EBITDA margin measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. The Company has also presented Free Cash Flow which is defined as net cash provided by (used in) operating activities less additions to property, plant and equipment. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for financial statements prepared in accordance with accounting principles generally accepted in
We round amounts to millions but calculate all percentages and per-share data from the underlying whole-dollar amounts. As a result, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Unless otherwise noted, all references to years are to our fiscal year, which ends on
Contact: | |
Investor Relations: | |
(212) 297-9721 | |
ir@abm.com | |
Financial Schedules ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
(in millions, except per share amounts) | 2023 | 2022 | Increase / (Decrease) | ||||||||
Revenues | $ | 2,092.9 | $ | 2,011.1 | 4.1 | % | |||||
Operating expenses | 1,806.9 | 1,753.1 | 3.1 | % | |||||||
Selling, general and administrative expenses | 161.3 | 159.7 | 1.0 | % | |||||||
Amortization of intangible assets | 18.3 | 19.2 | (4.8 | )% | |||||||
Operating profit | 106.4 | 79.1 | 34.5 | % | |||||||
Income from unconsolidated affiliates | 0.9 | 0.6 | 60.1 | % | |||||||
Interest expense | (20.5 | ) | (16.0 | ) | (28.4 | )% | |||||
Income before income taxes | 86.8 | 63.7 | 36.3 | % | |||||||
Income tax provision | (24.0 | ) | (14.9 | ) | (61.7 | )% | |||||
Net income | 62.8 | 48.9 | 28.5 | % | |||||||
Net income per common share | |||||||||||
Basic | $ | 0.97 | $ | 0.74 | 31.1 | % | |||||
Diluted | $ | 0.96 | $ | 0.73 | 31.5 | % | |||||
Weighted-average common and common equivalent shares outstanding | |||||||||||
Basic | 64.8 | 66.4 | |||||||||
Diluted | 65.3 | 66.9 | |||||||||
Dividends declared per common share | $ | 0.220 | $ | 0.195 | |||||||
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED) | |||||||||||
Years Ended | |||||||||||
(in millions, except per share amounts) | 2023 | 2022 | Increase / (Decrease) | ||||||||
Revenues | $ | 8,096.4 | $ | 7,806.6 | 3.7 | % | |||||
Operating expenses | 7,037.6 | 6,757.5 | 4.1 | % | |||||||
Selling, general and administrative expenses | 572.8 | 628.3 | (8.8 | )% | |||||||
Amortization of intangible assets | 76.5 | 72.1 | 6.1 | % | |||||||
Operating profit | 409.5 | 348.8 | 17.4 | % | |||||||
Income from unconsolidated affiliates | 3.9 | 2.4 | 60.1 | % | |||||||
Interest expense | (82.3 | ) | (41.1 | ) | (99.9 | )% | |||||
Income before income taxes | 331.1 | 310.0 | 6.8 | % | |||||||
Income tax provision | (79.7 | ) | (79.6 | ) | (0.2 | )% | |||||
Net income | 251.3 | 230.4 | 9.1 | % | |||||||
Net income per common share | |||||||||||
Basic | $ | 3.81 | $ | 3.44 | 10.8 | % | |||||
Diluted | $ | 3.79 | $ | 3.41 | 11.1 | % | |||||
Weighted-average common and common equivalent shares outstanding | |||||||||||
Basic | 66.0 | 67.1 | |||||||||
Diluted | 66.3 | 67.5 | |||||||||
Dividends declared per common share | $ | 0.880 | $ | 0.780 | |||||||
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES SELECTED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
(in millions) | 2023 | 2022 | ||||||
Net cash provided by operating activities | $ | 139.1 | $ | 117.1 | ||||
Additions to property, plant and equipment | (17.9 | ) | (13.0 | ) | ||||
Purchase of business, net of cash acquired | — | (137.9 | ) | |||||
Other | 0.8 | 2.8 | ||||||
Net cash used in investing activities | $ | (17.1 | ) | $ | (148.2 | ) | ||
Proceeds from issuance of share-based compensations awards, net | 0.8 | 0.8 | ||||||
Repurchases of common stock, including excise taxes | (111.0 | ) | (23.0 | ) | ||||
Dividends paid | (14.0 | ) | (12.8 | ) | ||||
Borrowings from debt | 384.5 | 489.3 | ||||||
Repayment of borrowings from debt | (397.6 | ) | (412.4 | ) | ||||
Changes in book cash overdrafts | (9.8 | ) | (1.1 | ) | ||||
Financing of energy savings performance contracts | — | 1.2 | ||||||
Repayment of finance lease obligations | (0.7 | ) | (0.7 | ) | ||||
Net cash (used in)/ provided by financing activities | $ | (147.9 | ) | $ | 41.2 | |||
Effect of exchange rate changes on cash and cash equivalents | (2.3 | ) | (1.1 | ) |
Years Ended | ||||||||
(in millions) | 2023 | 2022 | ||||||
Net cash provided by operating activities(a) | $ | 243.3 | $ | 20.4 | ||||
Additions to property, plant and equipment | (52.6 | ) | (50.8 | ) | ||||
Purchase of business, net of cash acquired | — | (194.6 | ) | |||||
Other | (9.5 | ) | 3.9 | |||||
Net cash used in investing activities | $ | (62.1 | ) | $ | (241.5 | ) | ||
Taxes withheld from issuance of share-based compensations awards, net | (10.5 | ) | (9.9 | ) | ||||
Repurchases of common stock, including excise taxes | (138.1 | ) | (97.5 | ) | ||||
Dividends paid | (57.5 | ) | (51.9 | ) | ||||
Borrowings from debt | 1,178.5 | 1,479.4 | ||||||
Repayment of borrowings from debt | (1,136.0 | ) | (1,096.9 | ) | ||||
Changes in book cash overdrafts | (20.3 | ) | 4.3 | |||||
Financing of energy savings performance contracts | 0.5 | 9.9 | ||||||
Repayment of finance lease obligations | (3.0 | ) | (1.9 | ) | ||||
Net cash (used in)/ provided by financing activities | $ | (186.3 | ) | $ | 235.5 | |||
Effect of exchange rate changes on cash and cash equivalents | 1.6 | (4.2 | ) |
(a) The year ended
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED) | |||||||
(in millions) | 2023 | 2022 | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 69.5 | $ | 73.0 | |||
Trade accounts receivable, net of allowances | 1,365.0 | 1,278.7 | |||||
Costs incurred in excess of amounts billed | 139.2 | 75.8 | |||||
Prepaid expenses | 78.5 | 82.1 | |||||
Other current assets | 58.6 | 51.6 | |||||
Total current assets | 1,710.7 | 1,561.2 | |||||
Other investments | 28.8 | 14.5 | |||||
Property, plant and equipment, net of accumulated depreciation | 131.5 | 125.4 | |||||
Right-of-use assets | 113.4 | 115.2 | |||||
Other intangible assets, net of accumulated amortization | 302.9 | 378.5 | |||||
2,491.3 | 2,485.6 | ||||||
Other noncurrent assets | 155.0 | 188.5 | |||||
Total assets | $ | 4,933.7 | $ | 4,868.9 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Current portion of debt, net | $ | 31.5 | $ | 181.5 | |||
Trade accounts payable | 299.1 | 315.5 | |||||
Accrued compensation | 249.7 | 246.6 | |||||
Accrued taxes—other than income | 58.9 | 124.7 | |||||
Deferred revenue | 90.1 | 46.3 | |||||
Insurance claims | 177.0 | 171.4 | |||||
Income taxes payable | 17.9 | 6.6 | |||||
Current portion of lease liabilities | 32.5 | 30.3 | |||||
Other accrued liabilities | 261.2 | 230.2 | |||||
Total current liabilities | 1,217.9 | 1,353.2 | |||||
Long-term debt, net | 1,279.8 | 1,086.3 | |||||
Long-term lease liabilities | 98.8 | 104.5 | |||||
Deferred income tax liability, net | 85.0 | 89.7 | |||||
Noncurrent insurance claims | 387.5 | 387.7 | |||||
Other noncurrent liabilities | 61.1 | 126.0 | |||||
Noncurrent income taxes payable | 3.7 | 4.2 | |||||
Total liabilities | 3,133.8 | 3,151.7 | |||||
Total stockholders’ equity | 1,799.9 | 1,717.2 | |||||
Total liabilities and stockholders’ equity | $ | 4,933.7 | $ | 4,868.9 | |||
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED) | |||||||||||
Three Months Ended | |||||||||||
($ in millions) | 2023 | 2022 | Increase/(Decrease) | ||||||||
Revenues | |||||||||||
Business & Industry | $ | 1,033.0 | $ | 1,028.9 | 0.4 | % | |||||
Manufacturing & Distribution | 391.2 | 371.2 | 5.4 | % | |||||||
Education | 229.8 | 217.1 | 5.8 | % | |||||||
Aviation | 248.2 | 214.4 | 15.8 | % | |||||||
Technical Solutions | 190.8 | 179.6 | 6.2 | % | |||||||
Total revenues | $ | 2,092.9 | $ | 2,011.1 | 4.1 | % | |||||
Operating profit | |||||||||||
Business & Industry | 84.6 | 92.4 | (8.5 | )% | |||||||
Manufacturing & Distribution | 42.0 | 41.2 | 1.9 | % | |||||||
Education | 10.2 | 8.3 | 23.0 | % | |||||||
Aviation | 16.4 | 1.3 | NM* | ||||||||
Technical Solutions | 24.4 | 20.9 | 16.6 | % | |||||||
Corporate | (70.0 | ) | (83.8 | ) | 16.5 | % | |||||
Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions | (0.9 | ) | (0.6 | ) | (60.1 | )% | |||||
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | (0.2 | ) | (0.6 | ) | 73.9 | % | |||||
Total operating profit | 106.4 | 79.1 | 34.5 | % | |||||||
Income from unconsolidated affiliates | 0.9 | 0.6 | 60.1 | % | |||||||
Interest expense | (20.5 | ) | (16.0 | ) | (28.4 | )% | |||||
Income before income taxes | 86.8 | 63.7 | 36.3 | % | |||||||
Income tax provision | (24.0 | ) | (14.9 | ) | (61.7 | )% | |||||
Net income | $ | 62.8 | $ | 48.9 | 28.5 | % |
* Not meaningful (due to variance greater than or equal to +/-100%)
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED) | |||||||||||
Years Ended | |||||||||||
($ in millions) | 2023 | 2022 | Increase/(Decrease) | ||||||||
Revenues | |||||||||||
Business & Industry | $ | 4,089.4 | $ | 4,095.9 | (0.2 | %) | |||||
Manufacturing & Distribution | 1,526.7 | 1,445.2 | 5.6 | % | |||||||
Education | 880.4 | 834.7 | 5.5 | % | |||||||
Aviation | 925.7 | 804.0 | 15.1 | % | |||||||
Technical Solutions | 674.2 | 626.8 | 7.6 | % | |||||||
Total revenues | $ | 8,096.4 | $ | 7,806.6 | 3.7 | % | |||||
Operating profit | |||||||||||
Business & Industry | $ | 315.6 | $ | 334.9 | (5.7 | %) | |||||
Manufacturing & Distribution | 161.7 | 161.8 | — | % | |||||||
Education | 49.7 | 47.1 | 5.5 | % | |||||||
Aviation | 60.0 | 29.3 | NM* | ||||||||
Technical Solutions(1) | 53.2 | 63.8 | (16.5 | %) | |||||||
Government Services | — | (0.3 | ) | NM* | |||||||
Corporate(2) | (226.6 | ) | (284.5 | ) | 20.3 | % | |||||
Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions | (3.9 | ) | (2.4 | ) | (60.1 | %) | |||||
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | (0.3 | ) | (0.9 | ) | 66.8 | % | |||||
Total operating profit | 409.5 | 348.8 | 17.4 | % | |||||||
Income from unconsolidated affiliates | 3.9 | 2.4 | 60.1 | % | |||||||
Interest expense | (82.3 | ) | (41.1 | ) | (99.9 | %) | |||||
Income before income taxes | 331.1 | 310.0 | 6.8 | % | |||||||
Income tax provision | (79.7 | ) | (79.6 | ) | (0.2 | %) | |||||
Net income | $ | 251.3 | $ | 230.4 | 9.1 | % |
*Not meaningful (due to variance greater than or equal to +/-100%)
(1) 2022 includes a
(2) 2023 includes
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) | ||||||||||||||||
($ in millions, except per share amounts) | Three Months Ended | Years Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of Net Income to Adjusted Net Income | ||||||||||||||||
Net income | $ | 62.8 | $ | 48.9 | $ | 251.3 | $ | 230.4 | ||||||||
Items impacting comparability(a) | ||||||||||||||||
Prior year self-insurance adjustment(b) | (9.5 | ) | (0.7 | ) | (11.3 | ) | (37.9 | ) | ||||||||
Legal costs and other settlements | 0.1 | (0.6 | ) | 0.1 | 0.3 | |||||||||||
Acquisition and integration related costs(c) | 3.1 | 4.0 | 14.3 | 16.6 | ||||||||||||
Transformation initiative costs(d) | 10.6 | 18.3 | 56.5 | 63.1 | ||||||||||||
Sale of healthcare customer contracts(e) | — | — | — | (7.6 | ) | |||||||||||
Change in fair value of contingent consideration(f) | — | — | (45.6 | ) | — | |||||||||||
Employee Retention Credit(g) | (1.7 | ) | — | (24.0 | ) | — | ||||||||||
Union Benefits(h) | 0.5 | — | 0.5 | — | ||||||||||||
Other(i) | 4.3 | — | 4.8 | — | ||||||||||||
Total items impacting comparability | 7.5 | 21.0 | (4.9 | ) | 34.5 | |||||||||||
Income tax benefit(j) (k) | (4.0 | ) | (10.4 | ) | (14.6 | ) | (17.8 | ) | ||||||||
Items impacting comparability, net of taxes | 3.4 | 10.6 | (19.5 | ) | 16.7 | |||||||||||
Adjusted net income | $ | 66.2 | $ | 59.4 | $ | 231.9 | $ | 247.1 |
Three Months Ended | Years Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of Net Income to Adjusted EBITDA | ||||||||||||||||
Net income | $ | 62.8 | $ | 48.9 | $ | 251.3 | $ | 230.4 | ||||||||
Items impacting comparability | 7.5 | 21.0 | (4.9 | ) | 34.5 | |||||||||||
Income tax provision | 24.0 | 14.9 | 79.7 | 79.6 | ||||||||||||
Interest expense | 20.5 | 16.0 | 82.3 | 41.1 | ||||||||||||
Depreciation and amortization | 29.3 | 30.0 | 120.7 | 112.4 | ||||||||||||
Adjusted EBITDA | $ | 144.2 | $ | 130.7 | $ | 529.1 | $ | 498.1 | ||||||||
Net income margin as a % of revenues | 3.0 | % | 2.4 | % | 3.1 | % | 3.0 | % |
Three Months Ended | Years Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues Excluding Management Reimbursement | ||||||||||||||||
Revenues | $ | 2,092.9 | $ | 2,011.1 | $ | 8,096.4 | $ | 7,806.6 | ||||||||
Management reimbursement | (78.5 | ) | (76.5 | ) | (302.3 | ) | (280.6 | ) | ||||||||
Revenues excluding management reimbursement | $ | 2,014.4 | $ | 1,934.6 | $ | 7,794.0 | $ | 7,526.0 | ||||||||
Adjusted EBITDA margin as a % of revenues excluding management reimbursement | 7.2 | % | 6.8 | % | 6.8 | % | 6.6 | % |
Three Months Ended | Years Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share | ||||||||||||||||
Net Income per diluted share | $ | 0.96 | $ | 0.73 | $ | 3.79 | $ | 3.41 | ||||||||
Items impacting comparability, net of taxes | 0.05 | 0.16 | (0.29 | ) | 0.25 | |||||||||||
Adjusted Net Income per diluted share | $ | 1.01 | $ | 0.89 | $ | 3.50 | $ | 3.66 | ||||||||
Diluted shares | 65.3 | 66.9 | 66.3 | 67.5 |
Three Months Ended | Years Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | ||||||||||||||||
Net cash provided by operating activities | $ | 139.1 | $ | 117.1 | $ | 243.3 | $ | 20.4 | ||||||||
Additions to property, plant and equipment | (17.9 | ) | (13.0 | ) | (52.6 | ) | (50.8 | ) | ||||||||
Free Cash Flow | $ | 121.2 | $ | 104.1 | $ | 190.7 | $ | (30.4 | ) | |||||||
(a) The Company adjusts net income to exclude the impact of certain items that are unusual, non-recurring, or otherwise do not reflect management's views of the underlying operational results and trends of the Company.
(b) Represents the net adjustments to our self-insurance reserve for general liability, workers’ compensation, automobile and medical and dental insurance claims related to prior period accident years. Management believes these prior period reserve changes do not illustrate the performance of the Company’s normal ongoing operations given the current year's insurance expense is estimated by management in conjunction with the Company's outside actuary to take into consideration past history and current costs and regulatory trends. Once the Company develops its best estimate of insurance expense premiums for the year, the Company fully allocates such costs out to the business leaders to hold them accountable for the current year costs within operations. However, since these prior period reserve changes relate to claims that could date back many years, current management has limited ability to influence the ultimate development of the prior year changes. Accordingly, including the prior period reserve changes in the Company's current operational results would not depict how the business is run as the Company holds its management accountable for the current year’s operational performance. The Company believes the exclusion of the self-insurance adjustment from net income is useful to investors by enabling them to better assess our operating performance in the context of current year profitability. For the three months ended
(c) Represents acquisition and integration related costs primarily associated with Able acquisition.
(d) Represents discrete transformational costs that primarily consists of general and administrative costs for developing technological needs and alternatives, project management, testing, training and data conversion inclusive of internal costs, consulting and professional fees for i) new enterprise resource planning system, ii) client facing technology, iii) workforce management tools and iv) data analytics. These costs are not expected to recur beyond the deployment of these initiatives.
(e) Represents a
(f) Represents an adjustment to the estimate of the fair value of the contingent consideration associated with the RavenVolt acquisition.
(g) Represents Employee Retention Credit (ERC) refunds received from the
(h) Includes a
(i) Represents primarily severance and related costs associated with the Company's reorganization that impacted approximately 150 people.
(j) The Company's tax impact is calculated using the federal and state statutory rate of 28.11% for US and 22.5% for
We calculate tax from the underlying whole-dollar amounts, as a result, certain amounts may not recalculate based on reported numbers due to rounding.
(k) The Company’s tax impact also includes the following discrete items:
- For the three months ended
October 31, 2023 - a tax benefit of
$1.8 million related to expiring statue of limitations $0.4 million charge related to ERC refunds received fromIRS
- a tax benefit of
- For the year ended
October 31, 2023 - a tax benefit of
$1.8 million related to expiring statue of limitations $5.4 million charge related to ERC refunds received fromIRS
- a tax benefit of
- For the three months and the year ended
October 31, 2022 - a tax benefit of
$4.5 million and$8.1 million , respectively, related to expiring statue of limitations.
- a tax benefit of
Source:
2023 GlobeNewswire, Inc., source