ABM Industries Incorporated (NYSE:ABM) Q4 2022 Earnings Call Transcript

Sean Eastman: Yes. I think that’s a good jump in, Scott. But Earl, I still want that DNA.

Earl Ellis: The DNA? So, if we think €“ look DNA, we don’t have the €“ I’m not guiding to the exact number, but what I can tell you is that the DNA is really associated with the acquisitions of RavenVolt. If you look at what we’re guiding from an acquisition perspective, we have the RavenVolt as the latest acquisition. And again, what we shared last quarter is that we’re anticipating that to be $0.03 to $0.04 of accretive EPS net of the interest expense.

Sean Eastman: Okay. All right. That helps. Great. And over the past several quarters, we’ve been waiting for contract rebids to occur in a meaningful fashion. My understanding was lot of those decisions were, kind of being pushed out through the pandemic. And I wondered if those decisions have started to kick-off and how you would characterize how ABM is faring in terms of retention, and maybe market share gains?

Scott Salmirs: Sure. I mean, look, I think you saw we had a 93% retention rate this year, which was phenomenal from our perspective, right? And so, it hasn’t been, yet, because I’ll always be conservative. You know that, Sean, but It hasn’t been yet this onslaught of all these clients saying, we have to go out to bid, we have to reprice. We’ve been pretty aggressive of working with clients on renewals, right ahead of bids, but this cascade of clients bidding out work hasn’t been on the radar right now, doesn’t mean it won’t change, doesn’t mean we won’t come back from €“ I’m always going to be conservative, right? It doesn’t mean we won’t come back from the holidays, but I have to tell you this is not something that’s keeping us awake at night right now, whereas maybe a year or so ago, we thought now when the pandemic ends or all these clients going to go out to bid and we’re just €“ that’s not the sentiment that we’re getting from our clients right now.

Sean Eastman: Okay. That’s probably good. And then how would you characterize the economic sensitivity to, sort of the non-janitorial margin accretive growth story over the next couple of years?

Scott Salmirs: Yes. So look, I think for us, the tailwinds are incredible with some of the federal programs that they’ve put in place and availability towards everything around ESG, right? And with our Technical Solutions Group and what they offer in our manufacturing and distribution group, which is dealing with all the e-commerce, life science companies, we think there’s tremendous tailwinds. I think the short-term impediment is the supply chain. And this isn’t new news. I mean, this has been going on for a couple of years now, right? I think just the reason it’s coming more to the fore is that we have thought by now that things would open up more, but you know some of the Asian markets where we got a lot of the supply from have had their COVID issues. So, hopefully towards the back half of this year, it will open up, but I think for us, if you look at our industry groups and our segments, we think we just have a lot of tailwinds in the next couple of years.

Sean Eastman: Okay. Very helpful. Thanks for taking my questions. I appreciate it.

Scott Salmirs: Thanks Sean.

Operator: Thank you. Our last question is from Marc Riddick with Sidoti. Please proceed with your question.

Marc Riddick: Hi, good evening, everyone.

Scott Salmirs: Good evening.