Brink's Reports Improved Second-Quarter Results GAAP EPS $.63 vs. $.11; 2012 Results Include $.43 Tax Benefit

Non-GAAP EPS $.40 vs. $.35

Revenue Down Slightly Due to Currency, Organic Growth 7%

Management Affirms Full-Year Outlook

RICHMOND, Va., July 26, 2012 /PRNewswire/ -- The Brink's Company (NYSE: BCO), a global leader in security-related services, today reported second-quarter earnings.

Second-Quarter Highlights

GAAP:

  • Revenue down 1% (7% organic growth), EPS: $.63 vs. $.11
  • Segment profit up 31% (44% organic growth), margin 4.9% vs. 3.7%
  • International margin 5.0% vs. 3.6%
  • North America margin 4.8% vs. 4.2%
  • $.43 EPS tax benefit related to a change in retiree health care funding strategy

Non-GAAP:

  • Revenue down 1% (7% organic growth), EPS: $.40 vs. $.35
  • Segment profit up 4% (14% organic growth), margin 5.2% vs. 5.0%
  • International profit down slightly, margin 5.0% vs. 5.1%; lower profit in Latin America due to Venezuela and negative currency offset EMEA improvement from operations and a commercial settlement
  • North America cost reductions drive profit improvement; margin 5.7% vs. 4.5%

Other:

  • Full-year outlook unchanged: organic revenue growth between 5% and 8%, segment margin approximately 7%
  • Future pension contributions to be funded with cash
  • Near-term pension contributions reduced by recent legislation
  • First-half capital spending down $20 million; full-year estimate below 2011 spend
  • 2Q12 includes $.04 charge related to the appointment of permanent CEO

Page 1

Tom Schievelbein, chairman, president and chief executive officer, said: "Second-quarter earnings outpaced year-ago results due primarily to higher profits in North America and EMEA.  Cost and productivity actions drove the improvement in North America.  EMEA profits reflect operating improvements in France and the Netherlands, where profit growth was supplemented by a commercial settlement.  Profits in Latin America declined due to higher than expected costs related to wage increases and changes in government regulations in certain countries.  We expect to offset these costs and resume profit growth in the second half of 2012.  Our full-year outlook continues to call for organic revenue growth in the 5% to 8% range, with a segment margin rate of about 7%.

"I am excited to begin my new role as CEO at Brink's, and our management team is working to improve near-term results and build meaningful value for shareholders.  We made the July pension payment in cash and plan to use cash going forward in lieu of equity.  We also completed a detailed review of our capital spending and have reduced it below last year's level.  Finally, we are changing to be a more customer-centric, focused organization.

"Brink's has many strengths including an iconic brand, an unmatched global infrastructure, and superior operating expertise.  Our strategy is to leverage these strengths to drive profit turnarounds in North America and EMEA, support continued strong growth in Latin America, and deliver higher-value solutions to our customers.  I am committed to accelerating the execution of this strategy, and to achieving our goal to deliver a 10% segment margin in 2015." 

Page 2

 

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






Second Quarter



First Half







2012



2011



2012



2011



GAAP EPS


$

0.63


$

0.11


$

0.98


$

0.50




Exclude U.S. retirement plan expenses



0.16



0.09



0.38



0.18




Exclude Belgium settlement charge



-



0.13



-



0.13




Exclude employee benefit settlement charge



-



0.01



0.02



0.01




Exclude gains on acquisitions and dispositions



(0.01)



-



(0.04)



(0.06)




Exclude tax benefit from change in retiree health care funding strategy



(0.43)



-



(0.43)



-




Adjust quarterly tax rate to full-year average rate



0.04



-



0.06



(0.03)



Non-GAAP EPS


$

0.40


$

0.35


$

0.97


$

0.74


















 

Summary of Second-Quarter Results*





Second Quarter




First Half




(In millions, except per share amounts)

2012


2011


% Change



2012


2011


% Change























GAAP


















Revenues

$

967


979


(1)

%


$

1,934


1,893


2

%




Segment operating profit (a)


48


37


31




115


89


29





Non-segment expense


(21)


(16)


31




(46)


(31)


46





Operating profit


27


20


30




69


57


20




Income from continuing operations (b)


31


5


 fav 




48


24


96




Diluted EPS from continuing operations (b)


0.63


0.11


 fav 




0.98


0.50


96























Non-GAAP


















Revenues

$

967


979


(1)

%


$

1,934


1,893


2

%




Segment operating profit (a)


50


49


4




120


101


19





Non-segment expense


(12)


(10)


17




(21)


(19)


11





Operating profit


39


39


-




99


82


20




Income from continuing operations (b)


19


17


13




47


36


32




Diluted EPS from continuing operations (b)


0.40


0.35


14




0.97


0.74


31























(a)

Segment operating profit is a non-GAAP measure that is reconciled to operating profit, a GAAP measure, on pages 4 and 5. 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 in more detail on page 11-12. Amounts may not add due to rounding.


Page 3   

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


Segment Results – GAAP








Organic


Acquisitions /


Currency





% Change










2Q '11


Change


Dispositions (b)


(c)


2Q '12


Total


Organic


Revenues:























Latin America


$

361


56


-


(41)


376


4


16



EMEA



334


19


-


(37)


315


(6)


6



Asia Pacific



39


2


-


(2)


39


-


6




International



733


77


-


(80)


730


-


10




North America



247


(5)


(1)


(3)


238


(4)


(2)






Total


$

979


71


(1)


(82)


967


(1)


7


Operating profit:






















International


$

26


15


-


(5)


36


39


58



North America



10


1


-


-


11


10


11




Segment operating profit



37


16


-


(5)


48


31


44




Non-segment (a)



(16)


(5)


-


-


(21)


31


31






Total


$

20


11


-


(5)


27


30


54





























Segment operating margin:























International



3.6%











5.0%







North America



4.2%











4.8%







Segment operating margin



3.7%











4.9%






 


Segment Results - Non-GAAP






















Organic


Acquisitions /


Currency





% Change










2Q '11


Change


Dispositions (b)


(c)


2Q '12


Total


Organic


Revenues:























Latin America


$

361


56


-


(41)


376


4


16



EMEA



334


19


-


(37)


315


(6)


6



Asia Pacific



39


2


-


(2)


39


-


6




International



733


77


-


(80)


730


-


10




North America



247


(5)


(1)


(3)


238


(4)


(2)






Total


$

979


71


(1)


(82)


967


(1)


7


Operating profit:























International


$

37


4


-


(5)


37


(2)


12



North America



11


3


-


-


14


21


22




Segment operating profit



49


7


-


(5)


50


4


14




Non-segment (a)



(10)


(2)


-


-


(12)


17


17






Total


$

39


5


-


(5)


39


-


13




























Segment operating margin:






















International



5.1%










5.0%







North America



4.5%










5.7%







Segment operating margin



5.0%










5.2%

































(a)

Includes income and expense not allocated to segments.


(b)

Includes operating results and gains/losses on acquisitions, sales and exits of businesses.


(c)

Revenue and Segment Operating Profit: The "Currency" amount in the table is the summation of the monthly currency changes, plus (minus) the U.S. dollar amount of remeasurement currency gains (losses) of bolivar fuerte-denominated net monetary assets recorded under highly inflationary accounting rules related to the Venezuelan operations. The monthly currency change is equal to the Revenue or Operating Profit for the month in local currency, on a country-by-country basis, multiplied by the difference in rates used to translate the current period amounts to U.S. dollars versus the translation rates used in the year-ago month. The functional currency in Venezuela is the U.S. dollar under highly inflationary accounting rules. Remeasurement gains and losses under these rules are recorded in U.S. dollars but these gains and losses are not recorded in local currency. Local currency Revenue and Operating Profit used in the calculation of monthly currency change for Venezuela have been derived from the U.S. dollar results of the Venezuelan operations under U.S. GAAP (excluding remeasurement gains and losses) using current period currency exchange rates.





Amounts may not add due to rounding.