ABM INDUSTRIES INC /DE/

Previous wording

In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $17.1 million of cumulative restructuring charges under this program through the first quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.

Current wording

In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $20.1 million of cumulative restructuring charges under this program through the second quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.

Previous wording

•We had a decrease in operating profit of $2.9 million, to $74.7 million, during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributed to:

Current wording

•We had an increase in operating profit of $4.6 million, to $86.9 million, during the three months ended April 30, 2026, as compared to the prior year period. The increase was primarily attributed to increase in revenues and decrease in certain discrete transformational costs under our ELEVATE strategy.

Previous wording

◦restructuring charges incurred during the first quarter of 2026 under our Restructuring Program; and

Current wording

◦restructuring charges incurred during the second quarter of 2026 under our Restructuring Program.

Previous wording

•Our effective tax rates for the three months ended January 31, 2026, and January 31, 2025, were 25.6% and 21.4%, respectively. Our effective tax rate for the three months ended January 31, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

Current wording

•Our effective tax rates for the three months ended April 30, 2026, and April 30, 2025, were 27.9% and 29.4%, respectively, and were not impacted by any significant discrete items. Our effective tax rates for the six months ended April 30, 2026 and April 30, 2025 were 26.8% and 25.6%, respectively. Our effective tax rate for the six months ended April 30, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the six months ended April 30, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

Previous wording

•Net cash provided by operating activities was $62.0 million for the three months ended January 31, 2026, as compared to cash used in operating activities of $106.2 million for the three months ended January 31, 2025. The $168.2 million improvement was primarily driven by favorable changes in working capital, including improved cash collections and timing of payments.

Current wording

•Net cash provided by operating activities was $128.2 million for the six months ended April 30, 2026, as compared to cash used in operating activities of $73.9 million for the six months ended April 30, 2025. The $202.1 million improvement was primarily driven by favorable working capital changes, including improved cash collections and timing of payments.

Previous wording

•Dividends of $17.3 million were paid to shareholders, and dividends totaling $0.290 per common share were declared during the three months ended January 31, 2026. Additionally, we repurchased 2.1 million shares for $91.1 million, excluding excise taxes, during the three months ended January 31, 2026.

Current wording

•Dividends of $34.2 million were paid to shareholders, and dividends totaling $0.580 per common share were declared during the six months ended April 30, 2026. Additionally, we repurchased 0.1 million shares for $3.0 million, excluding excise taxes, during the three months ended April 30, 2026.

Previous wording

•At January 31, 2026, total outstanding borrowings under our Amended Credit Facility were $1.6 billion. At January 31, 2026, we had up to $507.7 million of borrowing capacity.

Current wording

•At April 30, 2026, total outstanding borrowings under our Amended Credit Facility were $1.9 billion. At April 30, 2026, we had up to $518.9 million of borrowing capacity.

Previous wording

Operating expenses increased by $128.4 million, or 6.9%, to $1,983.5 million during the three months ended January 31, 2026, as compared to the prior year period. Gross margin decreased by 69 bps to 11.6% in the three months ended January 31, 2026, from 12.3% in the prior year period. The decrease in gross margin was primarily driven by strategic pricing decisions for contract rebids within B&I, service mix within M&D and Technical Solutions, and weather-related disruptions in Aviation and Technical Solutions. This was partially offset by operational efficiencies achieved through our Restructuring Program as well as positive operational impacts from weather-related disruptions within Education.

Current wording

Operating expenses increased by $172.0 million, or 9.3%, to $2,013.0 million during the three months ended April 30, 2026, as compared to the prior year period. Gross margin decreased by 72 bps to 12.1% in the three months ended April 30, 2026, from 12.8% in the prior year period. The decrease in gross margin was primarily driven by contract and service mix in B&I,M&D, and Aviation. This was partially offset by operational efficiencies achieved through our Restructuring Program.

Previous wording

Selling, general and administrative expenses increased by $0.8 million, or 0.4%, to $169.8 million during the three months ended January 31, 2026, as compared to the prior year period. The increase in selling, general and administrative expenses was primarily attributable to:

Current wording

Selling, general and administrative expenses decreased by $4.0 million, or 2.3%, to $171.1 million during the three months ended April 30, 2026, as compared to the prior year period. The decrease in selling, general and administrative expenses was primarily attributable to:

Previous wording

•a $2.5 million increase in costs associated with systems’ go-live.

Current wording

•a $2.5 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, and headcount expansion from WGNSTAR acquisition at M&D; and

Previous wording

Interest expense increased by $1.1 million, or 4.9%, to $24.0 million during the three months ended January 31, 2026, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility to fund working capital requirements.

Current wording

Interest expense increased by $4.2 million, or 17.6%, to $28.1 million during the three months ended April 30, 2026, as compared to the prior year period, and was driven by higher borrowings from our Amended Credit Facility, including the First Incremental Term Loan, to fund the WGNSTAR Acquisition and working capital requirements.

Previous wording

Our effective tax rates from income on operations for the three months ended January 31, 2026, and January 31, 2025, were 25.6% and 21.4%, respectively, resulting in provisions for taxes of $13.4 million and $11.9 million, respectively.

Current wording

Our effective tax rates from income on operations for the three months ended April 30, 2026, and April 30, 2025, were 27.9% and 29.4%, respectively, resulting in provisions for taxes of $16.6 million and $17.6 million, respectively.

Previous wording

The WOTC and FEZ credit are federal tax credits available to employers for hiring individuals from certain targeted groups. We have historically benefited from these credits, and they expired on December 31, 2025. As of January 31, 2026, the credits have not been renewed and our effective tax rate for the three months ended January 31, 2026, includes a benefit only for those employees who started work before December 31, 2025. Any extension or renewal of the WOTC and FEZ credit is subject to future legislative action by Congress and would occur retroactively.

Current wording

The WOTC and FEZ credit are federal tax credits available to employers for hiring individuals from certain targeted groups. We have historically benefited from these credits, and they expired on December 31, 2025. As of April 30, 2026, the credits have not been renewed and our effective tax rate for the three months ended April 30, 2026, includes a benefit only for those employees who started work before December 31, 2025.

Previous wording

We had a loss of $1.9 million on interest rate swaps during the three months ended January 31, 2026, as compared to a loss of $1.1 million during the three months ended January 31, 2025, primarily due to underlying changes in the fair value of our interest rate swaps.

Current wording

We had a loss of $1.6 million on interest rate swaps during the three months ended April 30, 2026, as compared to a loss of $5.4 million during the three months ended April 30, 2025, primarily due to underlying changes in the fair value of our interest rate swaps.

Previous wording

We had a foreign currency translation gain of $9.5 million during the three months ended January 31, 2026, as compared to a foreign currency translation loss of $7.6 million during the three months ended January 31, 2025. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Current wording

We had a foreign currency translation loss of $3.8 million during the three months ended April 30, 2026, as compared to a foreign currency translation gain of $14.3 million during the three months ended April 30, 2025. This change was due to fluctuations in the exchange rate between the U.S. dollar (“USD”) and the British pound sterling (“GBP”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

Previous wording

B&I revenues increased by $42.2 million, or 4.1%, to $1,065.1 million during the three months ended January 31, 2026, as compared to the prior year period. The revenue increase was primarily driven by client expansions domestically and new client wins internationally as well as higher volumes of work orders across all geographies. This includes strategic pricing decisions for contract rebids and proactive extensions. Management reimbursement revenues for this segment totaled $73.8 million and $71.3 million for the three months ended January 31, 2026 and 2025, respectively.

Current wording

B&I revenues increased by $0.3 million, or 0.03%, to $1,015.8 million during the three months ended April 30, 2026, as compared to the prior year period. The revenue increase was primarily driven by new client wins internationally partially offset by attrition of certain clients in the U.S. Management reimbursement revenues for this segment totaled $74.1 million and $71.8 million for the three months ended April 30, 2026 and 2025, respectively.

Previous wording

Operating profit increased by $0.3 million, or 0.4%, to $79.7 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 28 bps to 7.5% in the three months ended January 31, 2026, from 7.8% in the prior year period. The decrease in operating profit margin was primarily driven by strategic pricing decisions for contract rebids and proactive extensions, and investments made in the second half of 2025 to hire certain sales expertise to support future growth, partially offset by operational efficiencies achieved through our Restructuring Program.

Current wording

Operating profit decreased by $6.3 million, or 7.6%, to $76.7 million during the three months ended April 30, 2026, as compared to the prior year period. Operating profit margin decreased by 63 bps to 7.6% in the three months ended April 30, 2026, from 8.2% in the prior year period. The decrease in operating profit margin was primarily driven by contract and service mix, partially offset by operational efficiencies achieved through our Restructuring Program.

Previous wording

M&D revenues increased by $28.0 million, or 7.1%, to $422.3 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to the expansion of business with existing clients and new business wins.

Current wording

M&D revenues increased by $65.8 million, or 16.5%, to $463.8 million during the three months ended April 30, 2026, as compared to the prior year period. Revenue growth was comprised of acquisition growth of 9.2% and organic growth of 7.3%. Acquisition growth was driven by a $36.6 million revenue increase from the WGNSTAR Acquisition. The increase in organic revenue was primarily attributable to the expansion of business with existing clients and new business wins.

Previous wording

Operating profit decreased by $3.1 million, or 7.7%, to $36.3 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 139 bps to 8.6% in the three months ended January 31, 2026, from 10.0% in the prior year period. The decrease in operating profit margin was primarily attributable to contract mix and investments made in the second half of 2025 to hire certain technical expertise to support future growth.

Current wording

Operating profit increased by $0.7 million, or 1.9%, to $40.6 million during the three months ended April 30, 2026, as compared to the prior year period. Operating profit margin decreased by 126 bps to 8.8% in the three months ended April 30, 2026, from 10.0% in the prior year period. The decrease in operating profit margin was primarily attributable to contract mix and investments made in the second half of 2025 to hire certain technical expertise to support future growth.

Previous wording

Aviation revenues increased by $27.6 million, or 10.2%, to $297.7 million during the three months ended January 31, 2026, as compared to the prior year period. The increase was primarily attributable to new business wins in the second half of 2025 and scope expansions with existing clients both domestically and internationally. Management reimbursement revenues for this segment totaled $15.6 million and $10.6 million for the three months ended January 31, 2026 and 2025, respectively.

Current wording

Aviation revenues increased by $50.7 million, or 19.5%, to $310.8 million during the three months ended April 30, 2026, as compared to the prior year period. The increase was primarily attributable to new business wins domestically in the second half of 2025, and internationally in the first half of 2026, and scope expansions with existing clients. Management reimbursement revenues for this segment totaled $13.9 million and $12.6 million for the three months ended April 30, 2026 and 2025, respectively.

Previous wording

Operating profit increased by $0.4 million, or 2.7%, to $12.6 million for the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 31 bps to 4.2% in the three months ended January 31, 2026. The operating profit margin decreased primarily due to weather-related disruptions at airport locations.

Current wording

Operating profit decreased by $0.2 million, or 0.9%, to $16.3 million for the three months ended April 30, 2026, as compared to the prior year period. Operating profit margin decreased by 108 bps to 5.3% in the three months ended April 30, 2026. The operating profit margin decreased primarily due to contract and service mix as well as weather-related disruptions.

Previous wording

Corporate expenses decreased by $1.3 million, or 1.6%, to $81.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease in corporate expenses was primarily attributable to:

Current wording

Corporate expenses decreased by $3.9 million, or 4.7%, to $79.0 million during the three months ended April 30, 2026, as compared to the prior year period. The decrease in corporate expenses was primarily attributable to:

Previous wording

•a $3.7 million increase in restructuring charges under our Restructuring Program.

Current wording

•a $3.1 million increase in restructuring charges under our Restructuring Program; and

Previous wording

Amortization of intangible assets decreased by $1.4 million, or 10.0%, to $11.9 million during the three months ended January 31, 2026, as compared to the prior year period. The decrease was primarily attributable to certain intangibles acquired as part of the Able and GCA acquisitions.

Current wording

Amortization of intangible assets increased by $1.4 million, or 5.2%, to $27.9 million during the six months ended April 30, 2026, as compared to the six months ended April 30, 2025. This increase was due to the amortization of intangibles acquired as part of the WGNSTAR Acquisition.

Previous wording

Our effective tax rate for the three months ended January 31, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the three months ended January 31, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

Current wording

Our effective tax rate for the six months ended April 30, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the six months ended April 30, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

Previous wording

Operating profit increased by $7.6 million, or 54.2%, to $21.6 million for the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin increased by 322 bps to 9.4% in the three months ended January 31, 2026, from 6.2% in the prior year period. The increase in operating profit margin was primarily attributable to operational efficiencies, partially aided by the impact of weather-related school closures on operating costs.

Current wording

Operating profit increased by $10.2 million, or 36.6%, during the six months ended April 30, 2026, as compared to the prior year period. Operating profit margin increased by 211 bps to 8.2% in the six months ended April 30, 2026, from 6.1% in the six months ended April 30, 2025. The increase in operating profit margin was primarily attributable to operational efficiencies, particularly in managing overtime, aided by the impact of weather-related school closures on operating costs.

Previous wording

Operating profit decreased by $8.2 million, or 49.0%, to $8.4 million during the three months ended January 31, 2026, as compared to the prior year period. Operating profit margin decreased by 452 bps to 3.7% in the three months ended January 31, 2026, from 8.2% in the prior year period. The decrease in operating profit margin was primarily attributable to service mix, as well as temporary weather-related delays in the completion of certain projects.

Current wording

Operating profit decreased by $4.8 million, or 15.9%, to $25.2 million during the six months ended April 30, 2026, as compared to the prior year period. Operating profit margin decreased by 220 bps to 5.1% in the six months ended April 30, 2026, from 7.3% in the six months ended April 30, 2025. The decrease in operating profit margin was primarily attributable to service mix, as well as temporary weather-related delays in the completion of certain projects.

Previous wording

The decrease was partially offset by:

Current wording

This decrease was partially offset by:

Previous wording

During the three months ended January 31, 2026, we made principal payments under the term loan of $7.5 million. At January 31, 2026, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.6 billion and $23.5 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 5.44%. At January 31, 2026, we had up to $507.7 million of borrowing capacity.

Current wording

During the six months ended April 30, 2026, we made principal payments under the term loan of $18.2 million. At April 30, 2026, the total outstanding borrowings under our Amended Credit Facility in the form of cash borrowings and standby letters of credit were $1.9 billion and $23.5 million, respectively, and our weighted average interest rate on all outstanding borrowings, excluding letters of credit, was 5.66%. At April 30, 2026, we had up to $518.9 million of borrowing capacity.

Previous wording

We repurchased shares under the share repurchase program during the three months ended January 31, 2026, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase program may be suspended or discontinued at any time without prior notice. At January 31, 2026, authorization for $92.0 million of repurchases remained under our share repurchase program.

Current wording

We repurchased shares under the share repurchase program during the three months ended April 30, 2026, as summarized below. Share repurchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, share availability, and other factors. Repurchased shares are retired and returned to an authorized but unissued status. The share repurchase program may be suspended or discontinued at any time without prior notice. At April 30, 2026, authorization for $89.0 million of repurchases remained under our share repurchase program.

Previous wording

Net cash provided by operating activities was $62.0 million for the three months ended January 31, 2026, as compared to cash used in operating activities of $106.2 million for the three months ended January 31, 2025. The $168.2 million improvement was primarily driven by favorable changes in working capital, including improved cash collections and timing of payments.

Current wording

Net cash provided by operating activities was $128.2 million for the six months ended April 30, 2026, as compared to cash used in operating activities of $73.9 million during the six months ended April 30, 2025. The $202.1 million improvement was primarily driven by favorable working capital changes, including improved cash collections and timing of payments.

Previous wording

Net cash used in investing activities decreased by $1.8 million during the three months ended January 31, 2026, as compared to the prior year period. This decrease was primarily due to lower purchases of property, plant and equipment.

Current wording

Net cash used in investing activities increased by $266.8 million during the six months ended April 30, 2026, as compared to the prior year period. This increase was primarily due to the WGNSTAR Acquisition.

Previous wording

Net cash used in financing activities was $55.2 million during the three months ended January 31, 2026, as compared to net cash provided by financing activities of $116.9 million during the three months ended January 31, 2025. This quarter’s activity was primarily related to an increase in share repurchases and lower net borrowings from our Amended Credit Facility.

Current wording

Net cash provided by financing activities was $159.9 million during the six months ended April 30, 2026, as compared to net cash provided by financing activities of $98.7 million during the six months ended April 30, 2025. This quarter’s activity was primarily related to the First Incremental Term Loan.