ABM Industries Incorporated (NYSE:ABM) Q1 2023 Earnings Call Transcript

David Silver: Okay. Great. I’m going to squeeze one more and then this would be about interest expense. And again, it’s — I’m thinking of yesterday’s comments by our Fed Chief. But I was just wondering a couple of things. First off, have you thought about or how do you think about the opportunity or the benefit of trying to lock in, I guess, interest rates in the current environment on the variable portion of your debt? Just using derivatives or whatever. But the — just how you view the volatility in the particular rate that you’re most sensitive to. And then if you could remind me in the variable portion, should we be tracking, I don’t know, the two year treasury or is it SOFR, what particular rate base would your variable rate borrowings be most sensitive to? Thank you.

Earl Ellis: Yes. No, thanks for the question, David. I would say we’re always looking at rate locks and kind of like our mix of fixed and variable debt. And in fact, last year, as we saw the ramp-up in rates, we were very active in investing in rate locks. And so just to put it in perspective, right now we’re about 60% fixed, 40% floating. We actually like that mix at this point in time, but it’s something we will continue to look at, absolutely. As far as our variable debt, it is actually based off of SOFR at this point in time.

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

Scott Salmirs: Well, thanks all for participating. And as you can see, there’s a lot of enthusiasm and energy in what we’re doing here. And we’re excited about the future, we’re excited about our investments in ELEVATE. And we’ll come back to you in Q2 with an update, but we’re — we feel like we’re in a really good place now. So thanks for participating today.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.