Greetings, and welcome to the ABM Industries Incorporated First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. At this time, it's now my pleasure to introduce Paul Goldberg, Senior Vice President, Investor Relations. Thank you, Paul, you may now begin.

Good morning, everyone, and welcome to ABM's first quarter 2025 earnings call. My name is Paul Goldberg, and I'm the Senior Vice President of Investor Relations at ABM. With me today are Scott Salmirs, our President and Chief Executive Officer, and Earl Ellis, our Executive Vice President and Chief Financial Officer. Please note that earlier this morning, we issued our press release announcing our first quarter 2025 financial results and outlook. A copy of that release and an accompanying slide presentation can be found on our website, abm.com. After Scott and Earl's prepared remarks, we will host a Q&A session. But before we begin, I would like to remind you that our call and presentation today contains predictions, estimates and other forward-looking statements. Our use of the words estimate, expect and similar expressions are intended to identify these statements and they represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in the slide that accompanies our presentation as well as our filings with the SEC. During the course of this call, certain non-GAAP financial information will be presented. A reconciliation of historical non-GAAP numbers to GAAP financial measures is available at the end of the presentation and on the company's website under the Investor tab. And with that, I would like to turn the call over to Scott.

Thanks, Paul. Good morning, everyone, and thanks for joining us to go over our first quarter results. We're pleased with how the quarter shaped up, reflecting a continuation of the same key trends we saw in the back half of 2024, strong momentum in Technical Solutions and Aviation, stability in Education, and some lingering challenges in Business & Industry. We posted 2% organic revenue growth and delivered adjusted EPS of $0.87. So, we're off to a great start, and we're firmly on track to hit our full-year financial goals. We're also confident that commercial real estate markets, especially the high-quality office buildings we service in B&I, will return to growth in 2025, while our other end markets continue to remain constructive. With that, we are raising the lower end of our full-year adjusted EPS guidance, and now see adjusted EPS between $3.65 and $3.80. Beyond the numbers, there's a lot of exciting progress happening across ABM that sets us up for continued success. Let me highlight a few key initiatives. First, our ERP implementation. Last year, our Education segment fully transitioned to our new cloud-based system. We took those learnings and applied them as we rolled out the system to B&I and M&D at the start of the first quarter. To support this, we set up a hyper-care team and conducted invoice-by-invoice reviews to ensure accuracy and client satisfaction. This extra step minimized the usual friction that comes with a project of this scale. While the process has temporarily impacted cash flow as we anticipated, we expect things to normalize in the coming months. More importantly, once fully implemented, we expect this new ERP system will drive cost efficiencies, improve synergy capture and provide real-time analytics to uncover commercial growth opportunities. We also launched our new brand platform in the first quarter with the tagline, Driving Possibility Together. This refresh reflects our evolution into a tech-enabled solution provider focused on modernizing infrastructure and enhancing facility resilience. The rebrand highlights our commitment to operational excellence, workforce development, sustainability, and leveraging AI, machine learning, and data-driven insights. We've backed this launch with a digital marketing campaign, a revamped website, and something we call ABM Perspectives, a hub for industry insights and best practices. The response has been fantastic, energizing our team and really resonating with clients. It's a strong statement of where we're headed. On the financial side, we expanded and extended our credit facility to $2.2 billion. Earl will get into the details later, but this move reflects our strong growth over the past few years and the confidence our lenders have in our business model and long-term strategy. Finally, we're continuing to invest in client-facing technology with ABM Connect, our real-time data intelligence platform. This tool consolidates facility, financial, equipment, IoT, and service data to provide actionable insights and proactive solutions to our clients as well as our teammates. It's already making an impact whether streamlining airport operations through ABM Connect for Aviation, ensuring compliance in regulated industries, or optimizing asset performance with predictive maintenance. By harnessing data intelligence, we're helping clients drive efficiency, improve user experience, and strengthen long-term facility management. Separately, we're keeping a close watch on the current administration's approach to immigration policy. While shifts in policy could affect the balance of supply and demand for qualified workers, we're confident in our ability to adapt as we've always done. Our strong talent acquisition strategies, including technology-driven vetting and hiring, help us stay ahead. So far, we haven't seen any disruptions or meaningful changes in labor supply due to workforce challenges, and we're prepared to navigate any challenges that may come as we've done time and time again. Finally, before I hand it over to Earl, let me give you a quick update on where we're going across each of our segments. In B&I, a recent CBRE report showed that leasing activity for high-quality commercial office buildings in the US increased 24% in the fourth quarter compared to the previous quarter. That's a great sign for us. As these spaces start filling up, we anticipate more growth opportunities. Additionally, we're seeing employers push for greater office attendance, which should drive more work order volume for us. We're also excited about being awarded the contract for one of the most advanced corporate headquarters buildings in the world located in Manhattan. While our work there is in its early stages since the building is not fully operational, this achievement illustrates the power of our strategy to prioritize high-quality properties, just like the 3 million square foot building we got in Manhattan last year known as the MetLife Building. When combining all of that with strong performance in our UK and our sports and entertainment businesses, we feel confident that B&I will return to growth in the latter half of fiscal 2025. Manufacturing & Distribution remains on solid ground, thanks to a strong US industrial economy and continued growth in the semiconductor and data center markets. We're continuing to win new business, including new work for a major e-commerce company and a $30 million annual contract with a major Silicon Valley tech company, which adds to the $30 million in business we already have with them. More importantly, the new contract is an APS agreement spanning multiple service lines and is a proof point on the quality of our offering and the direction we're taking our business. For these reasons, we continue to expect mid-single-digit organic growth in the latter half of fiscal 2025 for M&D as these new deals take effect in May, and we move past the impact of the previously discussed client exit, which did not meet our return hurdles. Aviation continues to be a bright spot, with strong domestic flight volumes and TSA screenings indicating mid-single-digit market growth. We expect to outpace the industry, driven by our technology advantages, especially through ABM Connect and recent contract wins, including a $40 million shuttle agreement at a major airport hub in the Southeast and a nearly $10 million cleaning contract at DFW. Both agreements are set to begin in May. We were also in discussions regarding several other multimillion-dollar opportunities across both the airport and airline sectors, but decisions on those contracts are not expected until later in 2025. Education remains stable, providing a strong foundation of earnings and cash flow. We've done an excellent job managing costs, escalating pricing, and retaining marquee clients like a world-renowned private university in the Midwest, which represents an $18 million account. Our focus remains on larger school districts, colleges, and universities, and we're optimistic about winning more business as the year progresses with a few decisions expected in the second quarter. In Technical Solutions, our microgrid business remained strong, supported by a $490 million backlog and a robust sales pipeline, including a significant opportunity with an existing major big-box retailer client and multiple opportunities in the energy storage system space. In fact, we secured an $18 million win with a well-known energy storage project developer in Q1 and also booked $24 million in new infrastructure projects during the quarter spanning multiple school districts and municipalities. Additionally, we expect continued growth in data center activity, positioning Technical Solutions for a strong 2025. With that, I'll hand it over to Earl to walk through the financials, and I'll be back for some closing thoughts.

Good morning, everyone. As Scott mentioned, we are pleased with our first quarter results, and we believe we are well positioned to achieve our full-year financial goals. First quarter revenue of $2.1 billion increased 2.2%, comprised of 1.6% organic growth with the remainder from last year's acquisition of Quality Uptime Services. Organic revenue growth was once again led by Technical Solutions and Aviation, which grew 14% and 8%, respectively. Education grew 2%, while our B&I and M&D segments remained resilient. B&I continued to benefit from its focus on high-quality buildings and geographic diversification, while the impact of a planned client exit in M&D has been largely mitigated by new wins. Moving on to Slide 7, net income was $43.6 million or $0.69 per share as compared to net income of $44.7 million or $0.70 per share last year. This result benefited from higher segment earnings and the absence of prior year self-insurance adjustments, which were offset by higher corporate investments as planned, higher income taxes and interest expense, as well as a legal settlement. Adjusted net income was $55.3 million, and adjusted earnings per share was $0.87, up from $54.8 million and $0.86, respectively, in the prior year. First quarter performance reflected higher segment earnings, which were partially offset by increased corporate investments, higher taxes, and interest expense. Adjusted EBITDA increased 3% to $120.6 million, while adjusted EBITDA margin was flat at 5.9%. These results reflected higher segment earnings, particularly from ATS, which I'll discuss shortly, partially offset by planned increases in corporate costs. Now, turning to our segment results beginning on Slide 8. B&I posted revenue of $1 billion, which was slightly below last year. This performance demonstrated resilience through our diversified portfolio, which includes exposure to sports and entertainment, healthcare, and a focus on high-quality properties. We remain confident that an improving commercial real estate market and strong sales initiatives will drive growth in the second half of fiscal 2025. Encouragingly, B&I's operating profit and margin were largely consistent with last year on slightly lower revenue as we benefited from tight cost controls. Aviation revenue grew 8% to $270.1 million, driven by positive travel markets and new business wins from both the airport and airline side of the business. We have continued to win new business, including core cleaning work at the Dallas Fort Worth Airport, as well as a large transportation contract at a major Southeast hub airport, as Scott mentioned. We believe 2025 will be another record-breaking year for Aviation, continuing our multi-year streak of organic growth. Aviation's operating profit was $12.2 million, up 26%, and margin was 4.5%, an increase of 60 basis points. These improvements largely reflect normalized operating results compared to the prior year and the benefit of tight cost controls. Turning to Slide 9, Manufacturing & Distribution generated revenue of $394.3 million versus $400.9 million last year. This performance was due primarily to our decision to exit a contract with a sizable client, which did not meet our financial hurdles, largely offset by growth from other clients. We remain confident in our ability to achieve mid-single-digit organic growth later in 2025 in M&D. Operating profit was $39.4 million and operating margin was 10%, as compared to $41.3 million and 10.3%, respectively, last year. These results principally reflect increased investments in incremental sales positions and capabilities to drive growth in target markets like semiconductor and data centers. Education revenue grew 2% to $225.3 million, driven by favorable net pricing, increased work orders, and stable retention rates. Education operating profit increased 10% to $14 million, and margin was 6.2%, an increase of 40 basis points. This was largely attributable to improved labor efficiency and mix. Technical Solutions had another great quarter, growing revenue 22% to $202.3 million, with roughly two-thirds representing organic growth and the remaining 8% from our acquisition of Quality Uptime Services. Organic growth was, once again, driven by extremely strong microgrid project activity. Looking forward, results in this segment should remain strong, reflecting several medium-sized projects recently won, continued strong demand dynamics in our energy resiliency and data center markets, and our strong sales pipeline, all of which is supported by $490 million of backlog. Technical Solutions operating profit more than doubled to $16.6 million and operating margin increased 420 basis points to 8.2%, reflecting significantly higher volume as well as improved operating performance versus last year, which was impacted by project delays. Moving on to Slide 10, we ended the first quarter with total indebtedness of $1.6 billion, including $29.7 million of standby letters of credit, resulting in a total debt to pro forma adjusted EBITDA ratio of 2.9 times. At the end of Q1, we had available liquidity of $296.9 million, including cash and cash equivalents of $59 million. Of note, after the quarter closed, we successfully amended and extended our senior secured credit agreement. The upsized credit facility now totals $2.2 billion, consisting of $1.6 billion of revolving credit facility and a $600 million amortizing term loan maturing on February 26, 2030. This replaces a $1.3 billion revolving credit facility and a $650 million amortizing term loan, which had an outstanding balance of $528 million. The facility also reflects our growth as a company and the confidence our lenders have in our strategy. I'd like to thank our treasury team for successfully renewing the facility. Free cash flow in the first quarter was negative $123 million. This result largely reflected a temporary increase in working capital related to the transition to the company's new ERP system for B&I and M&D. This transition involves extended preplanned quality control reviews for invoicing and enhanced hyper-care processes to ensure client satisfaction. Automated invoicing is ramping up in the second quarter as the first wave of manual quality control activities have been completed. As such, we expect to hit our full-year free cash flow targets, though there will likely be some continued fluctuations near-term given the scale of the implementation. As a reminder, full-year normalized free cash flow is anticipated to be in the range of $250 million to $290 million. This forecast is normalized for an estimated $30 million to $40 million of ELEVATE and integration costs and $16 million of total earnout payments that will be recorded as a use of operating cash. Interest expense was $22.9 million, slightly higher than the prior year, largely reflecting higher debt balances. We expect the quarterly interest run rate to moderate in the second half of the year. We purchased approximately 415,000 shares in the first quarter at an average price of $51.23 per share for a total cost of $21 million At the quarter-end, we had $133 million remaining under our share repurchase program. Now, let's briefly review our full-year 2025 outlook, as shown on Slide 11. As Scott mentioned, we are raising the lower end of our guidance for adjusted EPS based on our solid start to the year and our constructive outlook. We are now forecasting full-year 2025 adjusted EPS to be in the range of $3.65 to $3.80. Our outlook for adjusted EBITDA margin remains unchanged at 6.3% to 6.5%. Our interest expense forecast is now $4 million higher at $80 million to $84 million, reflecting higher debt, and we still expect the normalized tax rate before discrete items to be between 29% to 30%. With that, let me now turn it back to Scott for closing comments.

Thanks, Earl. I want to thank our team for their hard work implementing our many initiatives and delivering a great quarter while staying focused on our clients. What we're doing isn't easy, but it's setting us up for long-term success. We're building on our positioning as an industry leader, and we appreciate the trust of our clients and investors. With that, let's take some questions.

Thank you. We'll now be conducting a question-and-answer session. And our first question is from the line of Tim Mulrooney with William Blair. Please proceed with your question.

Earl, good morning.

Good morning.

Good morning.

So, starting with your B&I business, the 24% improvement in commercial office leasing activity in the fourth quarter, I'm just curious how that compares to the last several quarters before that. Like, was that a significant acceleration in the trend line? And how does that compare to the fourth quarter typically from a seasonality standpoint? In other words, can you just put in context for investors how significant that move is?

There isn't any real seasonality when it comes to leasing activity; it primarily depends on when tenants' leases expire. However, we are pleased with the current pace of activity. This trend has been building over the past year or so, and seeing increased activity is encouraging. We also consider net absorption, which measures how much new space is being leased. It's possible to have strong leasing activity while still experiencing expirations that aren't being renewed, but the absorption rates have been strong as well. I believe this trend reflects some optimism regarding a return to the office. Many companies are encouraging employees to come back to the office more regularly. We may not return to a full five-day work week, but the hybrid approach is gradually becoming more common, showing improvement each quarter.

That all sounds very encouraging. We're certainly seeing that everywhere as well, Scott. Just one more question about shifting gears a little bit, but I wanted to ask about your federal exposure. So, still on the B&I segment, how much of your B&I segment revenue is generated from work completed in federal buildings? I'm trying to consider the potential risk here from DOGE regarding a footprint reduction. Also, what's your Technical Solutions revenue related to projects with federal agencies or funded with federal dollars? Any information on that would be helpful. Thank you.

Yeah, like, when you look at the size of our enterprise, we have almost no risk when it comes to that. We're not in that segment where we're doing any kind of cleaning or engineering in terms of stationary engineering in those federal buildings. Where we do, do a little work is mission critical, and that's not anything that DOGE is cutting right now. So, our mission critical business, which again is literally small compared to our $8-plus-billion in revenue, we feel like that's highly protected because of the nature of the work we do with special clearance and working in their data centers and critical environment. So, we feel we're really resilient there.

Got it. Thank you very much.

Thanks, Tim.

The next question is from the line of Josh Chan with UBS. Please proceed with your question.

Hi, good morning, Scott, Earl, and Paul. Thanks for taking my questions.

Good morning.

Yeah, good morning. So, thanks for proactively addressing the labor situation. I guess, could you talk about kind of your playbook if you were to see kind of spot rate labor costs accelerating, recognizing that you have a decent part of union labor, too, where maybe you have more visibility? So, maybe can you just talk to how you would react, what your exposure is to the spot rate labor? Thank you.

Sure. We feel very confident because half of our revenues come from union labor, and the labor rates have been set for the next three years at a reasonable increase of 3% to 4%. Additionally, on the non-union side, we consistently pass most of the labor cost increases on to our clients, and we have substantial evidence to support that. Historically, we have managed well during periods of labor shortages, even with the current immigration challenges. Recently, we've significantly improved our talent acquisition team and invested in technology for hiring and vetting employees, which has reduced our hiring time. Overall, we are in a strong position.

Thanks for the color. Yeah, thank you, Scott.

Sure.

And then on the ERP side of things, I guess, what does it take to kind of catch up on the free cash flow just like operationally and what's your confidence doing that kind of all within the same fiscal year?

Yeah. No, thanks for the question, Josh. So, as we stated, we went live this past quarter with the new system on two of our largest ERP, our B&I and M&D, two of our largest industry groups. And we did a thorough review of all of the invoices to ensure accuracy and customer satisfaction before putting them out. That actually resulted in a delay in the invoicing and obviously a delay therefore in cash collections. We anticipate that that will actually start to pick up in Q2, and for the balance of the year, we'll actually resume all of our cash collections and deliver against our committed cash flows for the year.

Yeah. And I'll give you some color on that, too. Whether it's through our vendor that's doing the ERP or through some of our networks, we've heard horror stories about ERP conversions and how invoices go out wrong, and we weren't going to do that. You guys know us to be super cautious and careful. So, we just said like rather delay getting some of these invoices out and go invoice-by-invoice and review to make sure that clients don't get wrong invoices. So, we were just going to be super, super cautious here, and we feel like for a little bit of the delay on the invoices and some pressure on cash flow are well worth keeping our customers.

That makes perfect sense. So, thanks for the color and thanks for the time.

Thank you.

Next question is from the line of Faiza Alwy with Deutsche Bank. Please proceed with your question.

Yes, good morning. Thank you. Scott, you sound very optimistic about new business and the pipeline. Can you share some insights on your current win rate compared to historical data? I'd also like to know how you view retention, new business, and existing volume. If you're experiencing higher win rates, could you elaborate on what sets you apart?

Sure. This is an area where our ELEVATE expenses have been significant. There’s a lot to cover, so I’ll organize my thoughts. First, to improve our win rate, we’ve focused on business development with field personnel, increasing our sales team, which has been fantastic. We’ve dedicated substantial time and resources to training these new hires, referred to as rookies, who are in their first year. They’re achieving an all-time high in new business bookings. Additionally, we’ve been leveraging AI and enhancing our deal desk, where we respond to RFPs. With the upgraded talent and AI integration over the past couple of years, our efficiency in responding to RFPs has greatly improved. While we don’t disclose our win rates, I can share that they have been improving incrementally, and we’re optimistic about it. We’ve experienced outstanding bookings, and in the last five years, we’ve set records for new bookings, a trend we anticipate continuing. Lastly, we’ve become very selective about the accounts we take on, as we don’t work for free anymore—which reflects a cultural shift at ABM. We are deliberate about the margin profile and client types we accept. I realize that was a lengthy response, but we are genuinely excited about our progress in new business.

Thank you for the question. Regarding the ATS business, we've experienced some fluctuations over the past couple of years. Do you believe we have reached a point of stability? How should we view revenue growth in that segment? I recognize you've mentioned backlog in the past, so could you provide some insight into how to approach the different components within ATS?

Sure. When considering the ATS business, I’d like to focus on two areas. First, our microgrid business has a record backlog and is performing exceptionally well. We are optimistic that 2025 will be an outstanding year for this segment. On the other hand, we are experiencing some softness in the bundled energy solutions, which depend heavily on interest rates and returns on investment. However, we are seeing a slight improvement compared to last year, which is a positive indication. Overall, we do need interest rates to decrease a bit more for growth in this area to really take off.

Got it. Thank you.

Our next question comes from the line of Jasper Bibb with Truist Securities. Please proceed with your question.

Hey, good morning, guys. M&D came in a bit better than we expected in the quarter. Just wanted to ask about the large client rebalancing impact. Curious if you have a little bit more visibility into revenue hit there. Has that moved through the additional phases? And separately, you talked about the new wins in that segment, too. So, I'm curious if the run rate in the second half on revenue is a little bit better than the initial guidance assumption. Thanks.

Sure. So, like on the large client, we've really lapped that now. It's not making a material impact. There was another large client to the tune of about $50 million in revenue where we passed on the business. It was going to be awarded to us, but it was going to be at a margin profile that was just not acceptable to us. So, we had the courage to not take that business, which I was really proud of the team on and that was last year. So, we've lapped those and we think when you look at M&D and you think about what's going on right now with the push towards onshore manufacturing and semiconductor business, which are our big segments within the M&D space, we are really, really excited and our pipeline is strong. We had one of our highest quarters in terms of new sales this quarter, and it's going to be one of our big stories for 2025, the M&D segment.

Thanks. And then, apologies if I missed it, but hoping you could specifically quantify the collections that were deferred out of the first quarter into the balance of the year. And then, I guess more broadly, wondering how you're thinking about the opportunity to generate cost savings from ERP as you've now migrated, I think, most of the revenue base onto the new platform.

Yeah. So, as we stated, we did a very manual process reviewing all the invoices. So, we anticipate that Q2 will actually have a significant increase in cash flow versus Q1, and that in the back half, we'll actually catch up in order to actually resume our committed full-year cash flows. So, we feel very comfortable and confident on that. With regards to ELEVATE, we are well through kind of like the ELEVATE program now that we actually have three of our industry groups on there. And when we look at the benefits, we've now realized probably close to two-thirds of the total benefit case. Now, the balance will actually come as we get the full enterprise on the new suite of systems. Because as you can see right now, we're actually still maintaining legacy systems. Now, once we actually have the full enterprise on the new suite, we'll actually get rid of the legacy systems and actually get to the full optimization of the implementation. And that should come through in the next fiscal.

Great. Thank you, guys.

Thanks.

The next questions come from the line of David Silver with CL King. Please proceed with your question.

Hi, thank you. I have a couple of questions for Earl. Firstly, with ATS growing by 22%, I'm a bit confused. There wasn't any additional accrual for contingent consideration on RavenVolt. I understand you made a larger accrual last year, but are you fully accrued on that, or should we expect some additional charges as we move into fiscal 2025? Secondly, regarding the $21 million in share repurchase, would you consider that as opportunistic and a permanent reduction in share count, or is it more about offsetting new issuance this year? Thank you.

Yeah. Thanks, David, for the question. First of all, on the ATS, you're absolutely right. We're very pleased with RavenVolt's performance over the last number of quarters. As you recall, last quarter, we actually took that contingent liability up. And if you recall, the earnout was really based on three years, on a calendar year '23, '24, '25. So, we're in that last year. And so, we feel that we are adequately reserved. Now having said that, there is still potential for higher earnouts based on higher levels of performance. We look at this on a quarterly basis. We will continue to look at this for the balance of the year. And provided that they continue to perform high, we will accrue accordingly. And remember the good news is that any incremental accrual obviously comes with higher EBITDA and actually has a very attractive payout. So, we will continue to look at that on a quarterly basis. With regards to the share purchases that we did in this last quarter, we're always committed to buy back shares against the anti-dilutive share-based compensation, and that's what we actually did this past quarter. Provided that we continue to see opportunistic opportunities, we will evaluate those accordingly and look to do more if it makes sense from an economic perspective.

Okay, great. And then, one more question I think on the M&D side. The previous questioner covered off most of what I was going to ask. But Scott, I was wondering if you could just comment on kind of the success with new business there in terms of your value proposition. I mean, I'm guessing, M&D is a category where there's larger spaces, there's probably more automation or digitalization in your product offering apart from growth in this segment in terms of the customer base. But maybe if you could just touch on your go-to-market strategy, your value proposition there, and why you are very optimistic about it for the balance of the year and the win rates and whatnot? Thank you.

Yeah. I think there's a couple of things. I appreciate the question. One, we had record Q1 bookings this year, which was great, and our pipeline is fantastic as I said on the last call. So, super optimistic. I think what makes us so special in this space is that we do not attack the segment as we would an office building or just as a straight janitorial job. We look at these as almost like an APS account, like a bundled offering, meaning we may get in with a janitorial assignment, but we're really good about being in the facility, taking on additional work, production support, working in clean rooms, everything from that to like constructing boxes, right, we will do anything that we can so that in this segment, the clients think of us as an extra resource in the facility that can handle things that they may have been subcontracting to four or five other vendors and now they're consolidating under us. And we've been really intentional in the segment of hiring subject matter experts. So, whether it's in pharma, whether it's in semiconductor, whether it's in e-commerce, we have a suite of executives that are subject matter experts that can talk to the clients in their language, and that's been the secret to our success, David. It's been taking a very focused intentional approach with experts rather than just treating it like a janitorial assignment in an office building.

Thank you. Our next questions come from the line of Justin Hauke with Robert W. Baird. Please proceed with your questions.

Great. It seems like the positive developments are in Building & Infrastructure and Manufacturing & Distribution. The sectors that have performed particularly well are Aviation and Technical Solutions. First, regarding Aviation, I wanted to inquire about the recent Delta preannouncement related to demand trends and your updated views on their sustainability. Then, in Technical Solutions, I noticed that the backlog of $490 million has decreased from $590 million a year ago. Is this decline primarily due to the bundled solutions and EV charging, or what factors have contributed to this decrease in backlog? Thank you.

Let me start with Aviation and Delta's announcement. It doesn't affect us. In our space, we operate within an airport, and even if there's a slight drop in demand, it won't alter our scope of work. Whether there are 10,000 people or 9,000 people in the airport at any moment, our responsibilities remain unchanged. We are confident in our resilience to shifts in demand. The same applies to our cabin cleaning services; whether a flight is full or 90% occupied, cleaning is still necessary. We haven't noticed any decrease in demand. Our bookings in Aviation are strong, and our pipeline is solid. There are no concerning signals for us from the Delta announcement. Additionally, RavenVolt has been a significant contributor to our Technical Solutions group, and our backlog is robust. With a bit more time, we expect to share positive news about other developments. We're as excited as ever about our offerings in ATS. Lastly, conversations with clients about our Technical Solutions business, Aviation, and B&I consistently revolve around power resiliency, the grid, and the current geopolitical dynamics in energy. We believe we have an outstanding offering at the right moment, which makes us very optimistic.

Okay. Thank you for the perspective. Appreciate it.

Got it.

Thank you. Our final question is from the line of Tate Sullivan of Maxim Group. Please proceed with your question.

Okay, great. Thanks. Scott, reviewing some of your comments about large awards, you said you were awarded a large contract for an advanced office building in New York. And I think you also mentioned $30 million in business from a large tech company. Are these two separate contracts?

Yes, they are. Two separate contracts, yeah.

Is the large office building contract in New York still under construction, or are employees moving in yet?

That's correct. It's a brand new construction that's going to be occupied in full by the end of this year and the first quarter of next year, but we're already starting with construction cleanup, and it's going to be a wonderful project for us from a great client.

Is there an opportunity for backup power work on this type of advanced building, or is that already included in the engineering specifications before the contract?

Yeah, that happens. When you're building a new building, you don't go to a provider like ABM in the commercial space. That will be done with the general contractor when you let that contract. So for us, it's more about going into data centers, schools, existing facilities.

Great. Okay. Thank you for that background.

Thanks.

Thank you. At this time, I'll now turn the floor back to management for closing remarks.

Well, thanks everyone. Appreciate you taking the calls today and listening in. And we're really optimistic. Hopefully, you can hear that in our remarks, and we feel like we're going to have a strong 2025 and looking forward to getting back to you in Q2 with our results. So, have a good spring, and we'll see you soon.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may now disconnect your lines at this time.