Brink's Reports First-Quarter Results

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

First Quarter

2013

2012

GAAP Diluted EPS

$

0.04

$

0.43

     Exclude Venezuela monetary asset remeasurement losses

0.17

-

     Exclude U.S. retirement plan expenses

0.17

0.21

     Exclude employee benefit settlement and severance losses

-

0.01

     Exclude additional European operations to be exited

0.02

0.02

     Exclude gains and losses on acquisitions and dispositions

(0.02)

(0.02)

     Adjust quarterly tax rate to full-year average rate

(0.04)

0.02

Non-GAAP Diluted EPS

$

0.35

$

0.67

Summary of First-Quarter Results*

First Quarter

(In millions, except for per share amounts)

2013

2012

% Change

GAAP

Revenues

$

977

$

941

4%

       Segment operating profit (a)

33

71

(53)

       Non-segment expense

(17)

(24)

(30)

       Operating profit

16

47

(65)

Income from continuing operations (b)

2

21

(90)

Diluted EPS from continuing operations (b)

0.04

0.43

(91)

Non-GAAP

Revenues

$

974

$

937

4%

       Segment operating profit (a)

51

75

(32)

       Non-segment expense

(8)

(10)

(21)

       Operating profit

43

66

(34)

Income from continuing operations (b)

17

33

(48)

Diluted EPS from continuing operations (b) (c)

0.35

0.67

(48)

(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.

(c)   

Non-GAAP diluted EPS for the first quarter of 2012 as reported in the fourth quarter of 2012 was $.01 per share lower, or $.66 per share.  The updated presentation reflects additional European operations that we expect to exit during 2013.

*Non-GAAP results are reconciled to the applicable GAAP results on pages 10-12. Amounts may not add due to rounding.

Acquisitions /

Organic

Dispositions

Currency

% Change

(In millions) 

1Q '12

Change

(b)

(c)

1Q '13

Total

Organic

Revenues:

Latin America

$

386

46

3

(22)

413

7

12

EMEA

280

6

-

-

286

2

2

Asia Pacific

38

7

-

(1)

43

14

18

International

704

58

3

(24)

742

5

8

North America

236

-

-

-

236

-

-

Total

$

941

58

3

(24)

977

4

6

Operating profit:

International

$

65

(13)

-

(17)

36

(45)

(20)

North America

6

(8)

-

-

(2)

NM

NM

Segment operating profit

71

(21)

-

(17)

33

(53)

(30)

Non-segment (a)

(24)

6

1

-

(17)

(30)

(26)

Total

$

47

(15)

2

(17)

16

(65)

(33)

Segment operating margin:

International

9.3%

4.8%

North America

2.5%

(1.0%)

Segment operating margin

7.5%

3.4%

Acquisitions /

Organic

Dispositions

Currency

% Change

(In millions)

1Q '12

Change

(b)

(c)

1Q '13

Total

Organic

Revenues:

Latin America

$

386

46

3

(22)

413

7

12

EMEA

277

6

-

-

282

2

2

Asia Pacific

38

7

-

(1)

43

14

18

International

701

58

3

(24)

738

5

8

North America

236

-

-

-

236

-

-

Total

$

937

58

3

(24)

974

4

6

Operating profit:

International

$

67

(14)

-

(3)

51

(25)

(21)

North America

8

(8)

-

-

1

(94)

(94)

Segment operating profit

75

(22)

-

(3)

51

(32)

(29)

Non-segment (a)

(10)

2

-

-

(8)

(21)

(21)

Total

$

66

(20)

-

(3)

43

(34)

(30)

Segment operating margin:

International

9.6%

6.8%

North America

3.4%

0.2%

Segment operating margin

8.0%

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.  Also includes impairment charges related to businesses that we

expect to dispose of in the near term.

(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.

The Brink's Company and subsidiaries

Outlook Summary (Unaudited)

(In millions)

GAAP

Non-GAAP

2013

2013

2012

Estimate

2012

Estimate

Organic revenue growth

International

11%

7% - 9%

11%

7% - 9%

North America

(2)%

0% - 2%

(2)%

0% - 2%

Total

7%

5% - 8%

7%

5% - 8%

Currency impact on revenue

International

(7)%

(3%) – (5%)

(7)%

(3%) – (5%)

North America

flat

flat

flat

flat

Total

(5)%

(2%) – (4%)

(5)%

(2%) – (4%)

Segment margin

International (a)

7.9%

6.0% - 7.0%

7.9%

7.0% - 8.0%

North America (b)

3.4%

1% - 2%

4.4%

2% - 3%

Total

6.8%

5.0% - 5.5%

7.0%

6.0% - 6.5%

Non-segment expense

General and administrative

$

44

43

$

44

43

Retirement plans (b)

47

42

-

-

Royalty income

(2)

(2)

(2)

(2)

Total

$

89

83

$

42

41

Effective income tax rate (a)

17%

49% – 52%

36%

36% – 39%

Interest expense

$

24

27 – 29

$

24

27 – 29

Interest and other income (expense) (c)

$

7

2 – 3

$

5

2 – 3

Net income attributable to

noncontrolling interests (a)

$

21

3 – 5

$

19

17 – 20

Fixed assets acquired

Capital expenditures

$

185

195

$

185

195

Capital leases (d)

18

10

18

10

Total

$

203

205

$

203

205

Depreciation and amortization

$

166

180 – 190

$

166

180 – 190

(a)

Actual and projected remeasurement losses on net monetary assets in Venezuela in the 2013 estimate, and the related effect on income tax rates and net income attributable to noncontrolling interest, have been excluded from non-GAAP results.

(b)

Costs related to U.S. retirement plans have been excluded from non-GAAP results including $9 million in 2012 and $12 million in 2013 related to North America, and $47 million in 2012 and $42 million in 2013 related to Non-segment.

(c)

Gains on sale of securities in 2012 of $2.4 million have been excluded from non-GAAP results.

(d)

Includes capital leases for newly acquired assets only.

Amounts may not add due to rounding.

The Brink's Company and subsidiaries

Condensed Consolidated Statements of Income (Loss) (Unaudited)

(In millions, except for per share amounts)

First Quarter

2013

2012

Revenues

$

977.4

$

940.7

Costs and expenses:

Cost of revenues

816.0

760.4

Selling, general and administrative expenses

136.0

135.8

Total costs and expenses

952.0

896.2

Other operating income (expense)

(9.2)

2.2

Operating profit

16.2

46.7

Interest expense

(6.0)

(6.3)

Interest and other income (expense)

0.5

3.9

Income from continuing operations before tax

10.7

44.3

Provision (benefit) for income taxes

4.9

16.6

Income from continuing operations

5.8

27.7

Loss from discontinued operations, net of tax

(18.7)

(3.9)

Net income (loss)

(12.9)

23.8

Less net income attributable to noncontrolling interests

(3.7)

(6.8)

Net income (loss) attributable to Brink's

$

(16.6)

$

17.0

Amounts attributable to Brink's

Continuing operations

$

2.1

$

20.9

Discontinued operations

(18.7)

(3.9)

Net income (loss) attributable to Brink's

$

(16.6)

$

17.0

Earnings (loss) per share attributable to Brink's common shareholders (a)

Basic:

Continuing operations

$

0.04

$

0.44

Discontinued operations

(0.38)

(0.08)

Net income (loss)

$

(0.34)

$

0.35

Diluted:

Continuing operations

$

0.04

$

0.43

Discontinued operations

(0.38)

(0.08)

Net income (loss)

$

(0.34)

$

0.35

Weighted-average shares

Basic

48.6

48.1

Diluted

48.9

48.3

(a) Amounts may not add due to rounding.

The Brink's Company and subsidiaries

Supplemental Financial Information (Unaudited)

(In millions)

First Quarter

2013

2012

DISCONTINUED OPERATIONS

Discontinued European operations (a)

Loss from operations (b)

$

(18.1)

$

(4.3)

Loss on sale

(0.5)

-

Adjustments to contingencies of former operations

-

0.1

Loss from discontinued operations before income taxes

(18.6)

(4.2)

Provision (credit) for income taxes

0.1

(0.3)

Loss from discontinued operations, net of tax

$

(18.7)

$

(3.9)

(a)

Discontinued operations include cash-in-transit operations in Germany and Poland, and guarding operations in France and Morocco. Revenues from these European operations were $18.2 million in the three months ended March 31, 2013 and $26.1 million in the three months ended March 31, 2012. No interest expense was included in discontinued operations in the three months ended March 31, 2013 and 2012.

(b)

Loss from operations includes $15.3 million of accrued severance expenses which will be required to be paid to terminate certain employees of the German operations after the sale of the business is completed. We intend to contribute a portion of the cost to fund the severance payments to the business prior to the execution of the sales transaction.

First Quarter

2013

2012

SELECTED CASH FLOW INFORMATION

Property and Equipment Acquired During the Period

Capital expenditures

International

$

27.4

$

18.6

North America

6.7

14.9

Capital expenditures

34.1

33.5

Capital Leases (a)

International

-

1.9

North America

-

3.2

Capital leases

-

5.1

Total

International

27.4

20.5

North America

6.7

18.1

Total

$

34.1

$

38.6

Depreciation and amortization

International

$

27.9

$

25.7

North America

16.6

15.3

Depreciation and amortization

$

44.5

$

41.0

(a)

Represents the amount of property and equipment acquired using capital leases. Since these assets are acquired without using cash, the acquisitions are not reflected in the consolidated cash flow statement. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years. Sales leaseback transactions are excluded from "Capital leases" in this table.

The Brink's Company and subsidiaries

Non-GAAP Results Reconciled to GAAP (Unaudited)

(In millions, except for per share amounts)

GAAP

Basis

Additional

European

Operations

to be Exited

(a)

Gains and

Losses on

Acquisitions

and

Dispositions

(b)

Monetary

Asset Re-

measurement

losses in

Venezuela

(c)

Employee

Benefit

Settlement

and

Severance

Losses

(d)

U.S.

Retirement

Plans

(e)

Adjust

Income

Tax Rate

(f)

Non-

GAAP

Basis

First Quarter 2013

Revenue:

Latin America

$

412.9

-

-

-

-

-

-

412.9

EMEA

286.0

(3.9)

-

-

-

-

-

282.1

Asia Pacific

42.9

-

-

-

-

-

-

42.9

International

741.8

(3.9)

-

-

-

-

-

737.9

North America

235.6

-

-

-

-

-

-

235.6

Revenues

$

977.4

(3.9)

-

-

-

-

-

973.5

Operating profit:

International

$

35.6

1.2

-

13.4

0.3

-

-

50.5

North America

(2.4)

-

-

-

-

2.9

-

0.5

Segment operating profit

33.2

1.2

-

13.4

0.3

2.9

-

51.0

Non-segment

(17.0)

-

(1.1)

-

-

10.5

-

(7.6)

Operating profit

$

16.2

1.2

(1.1)

13.4

0.3

13.4

-

43.4

Amounts attributable to Brink's:

Income from continuing operations

$

2.1

1.3

(1.1)

8.4

0.2

8.4

(2.2)

17.1

Diluted EPS – continuing operations

0.04

0.02

(0.02)

0.17

-

0.17

(0.04)

0.35

Amounts may not add due to rounding.

(a)   

To eliminate results of additional European operations we intend to exit in 2013.  Operations do not currently meet requirements to be classified as discontinued operations.

(b)   

To eliminate a $1.1 million adjustment to the amount of gain recognized on a 2010 business acquisition in Mexico as a result of a favorable adjustment to the purchase price received in the first quarter of 2013.

(c)   

To eliminate currency exchange losses related to a 16% devaluation of the official exchange rate in Venezuela from 5.3 to 6.3 bolivar fuertes to the U.S. dollar.

(d) 

To eliminate employee benefit settlement losses in Mexico. 

(e)  

To eliminate expenses related to U.S. retirement plans.

(f)   

To adjust effective income tax rate in the interim period to be equal to the midpoint of the estimated range of the full-year non-GAAP effective income tax rate.  The midpoint of the estimated range of the full-year non-GAAP effective tax rate for 2013 is 37.5%.

The Brink's Company and subsidiaries

Non-GAAP Results Reconciled to GAAP (Unaudited)

(In millions, except for per share amounts)

GAAP

Basis

Additional

European

Operations to

be Exited

(a)

Gains and

Losses on

Acquisitions

and

Dispositions

(b)

Employee

Benefit

Settlement

and

Severance

Losses

 (c)

U.S.

Retirement

Plans

(d)

Tax Benefit

on Change

in Health

Care

Funding

Strategy

(e)

Adjust

Income Tax

Rate

(f)

Non-

GAAP

Basis

First Quarter 2012

Revenue:

Latin America

$

386.3

-

-

-

-

-

-

386.3

EMEA

280.4

(3.8)

-

-

-

-

-

276.6

Asia Pacific

37.6

-

-

-

-

-

-

37.6

International

704.3

(3.8)

-

-

-

-

-

700.5

North America

236.4

-

-

-

-

-

-

236.4

Revenues

$

940.7

(3.8)

-

-

-

-

-

936.9

Operating profit:

International

$

65.2

1.2

-

0.8

-

-

-

67.2

North America

5.8

-

-

-

2.2

-

-

8.0

Segment operating profit

71.0

1.2

-

0.8

2.2

-

-

75.2

Non-segment

(24.3)

-

-

-

14.7

-

-

(9.6)

Operating profit

$

46.7

1.2

-

0.8

16.9

-

-

65.6

Amounts attributable to Brink's:

Income from continuing operations

$

20.9

1.3

(1.2)

0.6

10.2

-

0.8

32.6

Diluted EPS – continuing operations

0.43

0.02

(0.02)

0.01

0.21

-

0.02

0.67

See page 12 for footnote explanations.

The Brink's Company and subsidiaries

Non-GAAP Results Reconciled to GAAP (Unaudited)

(In millions, except for per share amounts)

GAAP

Basis

Additional

European

Operations to

be Exited

(a)

Gains and

Losses on

Acquisitions

and

Dispositions

(b)

Employee

Benefit

Settlement

and

Severance

Losses

(c)

U.S.

Retirement

Plans

(d)

Tax Benefit

on Change

in Health

Care

Funding

Strategy

(e)

Adjust

Income Tax

Rate

(f)

Non-

GAAP

Basis

Full Year 2012

Revenue:

Latin America

$

1,579.4

-

-

-

-

-

-

1,579.4

EMEA

1,158.4

(15.4)

-

-

-

-

-

1,143.0

Asia Pacific

158.9

-

-

-

-

-

-

158.9

International

2,896.7

(15.4)

-

-

-

-

-

2,881.3

North America

945.4

-

-

-

-

-

-

945.4

Revenues

$

3,842.1

(15.4)

-

-

-

-

-

3,826.7

Operating profit:

International

$

227.6

5.4

(8.5)

3.9

-

-

-

228.4

North America

32.5

-

-

-

8.8

-

-

41.3

Segment operating profit

260.1

5.4

(8.5)

3.9

8.8

-

-

269.7