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

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Marc Riddick: So, I wanted to start with, you touched on it in your prepared remarks around the pace of return or the activity around return to office, and I was wondering if you could touch a little bit on that because I guess since we last spoke, when you reported your 3Q numbers, that change has been kind of gradual. I guess if you talk about from, call it September, the beginning of September, but now I’ll call it Labor Day to now, that’s been kind of gradual. So, I was wondering if you could talk a little bit about maybe what you’re seeing and what your planning is going into next year as to how €“ what you’re looking for as to how that plays into your planning and your expense matching in ?

Scott Salmirs: Sure. I mean, look, the return to office has been slow, like we’ve said, but slow, but increasing, right? And I think we’ve seen it a little bit in the numbers. And I could just tell you anecdotally, as I travel in my circles and talk to some peer CEOs, there’s definitely a push to get people back to the office. I don’t think we’re going to see five-day a week any time soon. And we may not even see four-day a week anytime soon, but like two to three is solidly in the crosshairs for 2023 and that should play to our benefit because we want people back to work, right. It’s good for us. Generates work orders, it generates demand. So, we’re optimistic that there’ll be incremental return to work in 2023, but not outsized. I think it’s going to be moderate, but up moderate.

Marc Riddick: Got you. And then the second question I have is around, well, topic I guess is really around acquisition. And the overall pipeline, the valuations that you’re seeing because certainly when you when you set the initial goals, the initial ELEVATE goals, I mean, with the answers you’ve already done most of the way there as to the goals that you set at that time. So, I was wondering if you could talk a little bit about your own appetite for additional deal flow, as well as maybe what the pipeline looks like in valuations and the like?

Scott Salmirs: Yes. So look, we’re still going to do acquisitions. I think they’ll be probably more in the range of tuck-ins right now. It’s a different interest rate environment at this moment. And we’re hyper-focused on the Technical Solutions area and they tend to be smaller in size anyway. The acquisitions in that space don’t have a at the end or an at the end, right? So, we’ll still be active in the market. There is a pipeline, but €“ so I would say, what we’re seeing is there are people that are €“ it’s more pausing than stopping, I think. And that probably aligns well with what we’re seeing in the capital markets as well, but we’re not going to be shy about pulling the trigger on something that’s strategic and makes sense, but as Earl has said, we’re careful about our leverage ratio and you’re not going to see it popping above 3x.

That’s not what we want to do here. So, rest assured, we’re not going to get over our skis on acquisitions, but we will continue to grow this company through acquisition.

Marc Riddick: Excellent. Thank you very much.

Earl Ellis: Thank you.

Scott Salmirs: Well, thanks everybody. I know that was the last question. Appreciate you getting on tonight and just we’re excited about 2023. Hopefully, you can €“ it came through in our sentiment. And I just wish everyone has a happy and healthy holiday and we look forward to getting back and talking to you about our Q1 results. So, have a good night everybody.

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

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