Brink's Reports Fourth-Quarter Results, Restructures European Operations GAAP EPS $.67 vs. $.48; Non-GAAP EPS $.60 vs. $.67

Improvement in Europe, North America Offset by Lower Profits in Latin America

2013 Segment Margin Expected to be 6.0% to 6.5%

RICHMOND, Va., Feb. 1, 2013 /PRNewswire/ -- The Brink's Company (NYSE: BCO), a global leader in security-related services, today reported fourth-quarter earnings.  The company also announced its intent to divest its cash-in-transit (CIT) operations in Germany, and that it has completed the divestitures of guarding operations in France and Morocco.  The divestiture of its CIT business in Poland is expected to be completed by March 31. 

In 2012, these businesses generated $104 million of revenue and an operating loss of $18 million or $.36 per share.  Brink's will continue to operate its Global Services business in each of these countries.  Results from these businesses are now reported in discontinued operations (see table below).  


Quarterly Amounts Reclassified as Discontinued Operations(a)





(In millions, except for per share amounts)


2011


2012



GAAP Basis


1Q


2Q


3Q


4Q


Full Year


1Q


2Q


3Q


4Q


Full Year



Revenue

$

29


32


30


29


119


26


26


26


27


104



Operating loss


(7)


(13)


(4)


(4)


(28)


(4)


(4)


(6)


(4)


(18)



Income taxes


2


4


-


(2)


5


-


1


-


(1)


1



Net loss


(5)


(9)


(4)


(6)


(24)


(4)


(3)


(6)


(4)


(18)



Diluted EPS


(0.10)


(0.18)


(0.08)


(0.13)


(0.49)


(0.08)


(0.07)


(0.12)


(0.09)


(0.36)

















































Non-GAAP Basis























Revenue

$

29


32


30


29


119


26


26


26


27


104



Operating loss


(7)


(3)


(4)


(4)


(18)


(4)


(4)


(3)


(4)


(16)



Income taxes


2


1


-


(2)


1


-


1


-


(1)


1



Net loss


(5)


(2)


(4)


(6)


(17)


(4)


(3)


(3)


(4)


(15)



Diluted EPS


(0.10)


(0.05)


(0.08)


(0.13)


(0.36)


(0.08)


(0.07)


(0.06)


(0.09)


(0.31)
























































(a)

Amounts in the table represent the results of the European operations reclassified to Discontinued Operations in the fourth quarter of 2012.  The consolidated income statement also includes amounts related to operations divested in prior years including the company's former coal operations.  Non-GAAP results are reconciled to the applicable GAAP results on page 21.

Page 1

Tom Schievelbein, chairman, president and chief executive officer, said:  "Eliminating the operating losses from these businesses improves the overall earnings power of Brink's by 31 cents per share on a non-GAAP basis, and enables our new leadership team to focus on achieving sustainable returns in our remaining markets, which continue to be very challenging.

"Fourth-quarter earnings from continuing operations declined due primarily to lower operating results in Latin America, partially offset by improvement in Europe and North America.  In 2013, it will be very difficult to match 2012 earnings due to an increase in productivity investments and our assumption of currency devaluation in Venezuela.  We expect our first-quarter year-over-year comparison to be particularly challenging given the strong Latin America performance last year.  In light of these factors, we expect our 2013 segment margin rate to be between 6% and 6.5% on organic revenue growth of 5% to 8%.  Our long-term margin goal of 10% is still in place, although it's clear that achieving it will take longer than originally planned. 

"Our recent results are far from satisfactory, and we continue to face challenges on several fronts, but I'm confident that we are making steady progress in our efforts to position Brink's for strong profit growth in 2014 and beyond.

"In 2013, we will continue to take decisive action to accelerate the execution of our strategy.  Eliminating the operating losses in Europe is an important step in our plan to maximize profits in mature, slow-growth CIT markets.  Despite recent challenges in Latin America, we are optimistic about that region's long-term growth prospects and will continue to invest aggressively there.  We will also continue to seek opportunities to invest in adjacent markets.  Our recent introduction of the Brink's Money™ card and the acquisition of a payments service company in Brazil are the latest additions to our small but growing payments business.

"I can assure you that, with our new leadership team in place, we will continue to be aggressive in our efforts to improve productivity, deliver solutions to our customers and build value for shareholders."

Fourth-Quarter Highlights

GAAP:

  • Revenue up 4% (6% organic growth), EPS $.67 vs. $.48
  • Segment profit down 6% (4% organic decline), margin 7.2% vs. 7.9%
  • International profit down 9% (6% organic decline), margin 8.4% vs. 9.8%
  • North America margin 3.0% vs. 2.3%

Non-GAAP:

  • Revenue up 4% (6% organic growth), EPS $.60 vs. $.67
  • Segment profit down 6% (4% organic decline), margin 7.4% vs. 8.1%
  • International profit down 10% (8% organic decline), margin 8.4% vs. 10.0%; EMEA improvement more than offset by lower profit in Latin America and Asia-Pacific
  • North America cost reductions drive profit improvement; margin 3.9% vs. 2.6%

Other:

  • Full-year GAAP EPS $2.20 vs. $2.01; Non-GAAP EPS $2.31 vs. $2.32
  • Full-year non-GAAP segment margin 7.0% vs. 7.1%; organic revenue growth 7%
  • Negative currency impact on a GAAP basis: $17 million on revenue, $2 million on profit in fourth quarter; $196 million on revenue, $15 million on profit in 2012
  • Full-year capital spending down $32 million to $203 million

Page 2

Summary Reconciliation of Fourth-Quarter GAAP to Non-GAAP EPS*




Fourth Quarter


Full Year






2012



2011



2012



2011



GAAP EPS

$

0.67


$

0.48


$

2.20


$

2.01




Exclude U.S. retirement plan expenses


0.16



0.09



0.70



0.37




Exclude employee benefit settlement, CEO retirement costs and other


0.01



0.06



0.06



0.08




Exclude additional European operations to be exited


0.01



0.01



0.08



0.06




Exclude gains and losses on acquisitions and asset dispositions


(0.18)



-



(0.29)



(0.20)




Exclude tax benefit from change in retiree health care funding strategy


-



-



(0.43)



-




Adjust quarterly tax rate to full-year average rate


(0.06)



0.02



-



-



Non-GAAP EPS*

$

0.60


$

0.67


$

2.31


$

2.32

















Summary of Fourth-Quarter and Full-Year Results*














Fourth Quarter




Full Year









%







%




(In millions, except for per share amounts)

2012


2011


Change



2012


2011


Change























GAAP


















Revenues

$

1,007


968


4

%


$

3,842


3,766


2

%




Segment operating profit (a)


72


77


(6)




260


259


-





Non-segment expense


(21)


(21)


1




(89)


(60)


49





Operating profit


51


56


(9)




171


200


(14)




Income from continuing operations (b)


33


23


40




107


97


11




Diluted EPS from continuing operations (b)


0.67


0.48


40




2.20


2.01


9























Non-GAAP


















Revenues

$

1,004


966


4

%


$

3,833


3,756


2

%




Segment operating profit (a)


74


79


(6)




268


267


-





Non-segment expense


(11)


(11)


(1)




(42)


(41)


4





Operating profit


63


68


(7)




226


227


-




Income from continuing operations (b)


29


32


(9)




112


112


1




Diluted EPS from continuing operations (b)


0.60


0.67


(10)




2.31


2.32


-

























(a)

Segment operating profit is a non-GAAP measure. Disclosure of segment operating profit enables investors to assess operating performance excluding non-segment income and expense.


(b)

Amounts reported are attributable to shareholders of The Brink's Company and exclude earnings related to noncontrolling interests.




*Non-GAAP results are reconciled to the applicable GAAP results on pages 13 - 19. Amounts may not add due to rounding.

Page 3  

 

The Brink's Company and subsidiaries
Fourth Quarter 2012 vs. 2011 (Unaudited)
(In millions)


Segment Results – GAAP









Organic


Acquisitions /


Currency




% Change










4Q '11


Change


Dispositions (b)


(c)


4Q '12


Total


Organic



Revenues:



















Latin America


$

393


47


1


(9)


432


10


12




EMEA



292


13


-


(10)


294


1


4




Asia Pacific



40


4


-


-


44


9


10





International



724


63


1


(19)


770


6


9





North America



244


(9)


-


2


237


(3)


(4)






Total



$

968


54


1


(17)


1,007


4


6


Operating profit:


















International


$

71


(4)


-


(2)


65


(9)


(6)



North America



6


1


-


-


7


27


24




Segment operating profit



77


(3)


-


(2)


72


(6)


(4)




Non-segment (a)



(21)


-


-


-


(21)


1


1





Total



$

56


(3)


-


(2)


51


(9)


(6)























Segment operating margin:

















International



9.8%








8.4%






North America



2.3%








3.0%






Segment operating margin



7.9%








7.2%