Brink's Reports Fourth-Quarter Results

RICHMOND, Va., Jan. 30, 2014 /PRNewswire/ -- The Brink's Company (NYSE: BCO), a global leader in security-related services, today reported fourth-quarter earnings.

Fourth-Quarter Highlights

GAAP:

• Revenue up 6% (11% organic growth), EPS $.53 vs. $.70
• Segment profit up 17% (30% organic growth), margin 8.1% vs. 7.3%
• International profit up 30% (44% organic growth), margin 10.3% vs. 8.5%
• North America margin of 0.1% vs. 3.3%

Non-GAAP:

• Revenue up 6% (11% organic growth), EPS $.79 vs. $.60
• Segment profit up 24% (37% organic growth), margin 8.8% vs. 7.5%
• International profit up 38% (52% organic growth), margin 10.8% vs. 8.5%
• North America margin 1.4% vs. 4.2%

Other:

• Full-year GAAP EPS $1.47 vs. $2.29; Non-GAAP EPS $2.37 vs. $2.32
• Full-year GAAP segment margin down from 7.1% to 6.4%; Non-GAAP flat at 7.2%; organic revenue growth 8%
• Full-year capital spending down $13 million to $183 million
• Underfunding of legacy liabilities improves by $265 million

Tom Schievelbein, chairman, president and chief executive officer, said:  "The improvement in fourth-quarter earnings reflects strong performance from international operations, driven primarily by Venezuela and Brazil.  In 2014, we expect a segment margin rate of about 7% on organic revenue growth of 5% to 8%, as we invest in adjacencies and our high-value service offerings and control costs in our core business."

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Non-Segment Expenses
On a GAAP basis, non-segment expenses increased slightly to $22 million versus the year-ago quarter of $21 million.  On a non-GAAP basis, non-segment expenses increased to $12 million from the year-ago quarter of $11 million.

Capital Expenditures and Capital Leases
Full-year capital expenditures and capital lease additions were $183 million versus $196 million in 2012.  In 2014, these expenditures are expected to total $200 million to $210 million.

Income Taxes
On a GAAP basis, fourth-quarter tax expense was $21 million (37% effective rate) versus $3 million in 2012 (7% effective rate). The full-year 2013 tax expense was $52 million (35% effective rate) versus $27 million in 2012 (17% effective rate). The full-year 2013 effective rate was unfavorably affected by tax expense resulting from repatriation, partially offset by a tax benefit from the mix of earnings. The full-year 2012 effective rate was favorably affected by a $21 million non-cash tax benefit related to a change in retiree health care funding strategy and a $7.5 million tax benefit related to a change in judgment of an income tax accrual, partially offset by tax expense resulting from repatriation and mix of earnings.  On a non-GAAP basis, the full-year rate for 2013 was 33% versus 37% in 2012 due in large part to higher Venezuela earnings.

2014 Outlook
See page 8 for a summary of selected 2013 results and 2014 outlook items including guidance on revenue, segment margin, non-segment expense, interest expense, tax rate, non-controlling interest expense, capital expenditures, capital leases and depreciation and amortization.  This outlook assumes no change in exchange rates used for reporting Venezuela results for 2014.

Recent Events
Brink's disclosed today that it is exploring re-entry into the home security industry.  In 2008, Brink's spun off its Brink's Home Security unit to shareholders and entered into a 5-year non-compete agreement, which expired on October 31, 2013.

On November 1, Brink's completed the sale of its Threshold Financial Technologies, Inc. subsidiary to DirectCash Payments Inc. for $50 million, generating a fourth-quarter gain of $19 million ($.31 per share after taxes).  Under the terms of the agreement, DirectCash acquired Threshold's private label ATM network and payment processing businesses in Canada while Brink's continues to own and operate Threshold's integrated managed services business as Brink's Integrated Managed Services (Brink's IMS).  On November 22, Brink's completed the sale of its ICD, Ltd., commercial security subsidiary for $33 million, generating a fourth-quarter gain of $10 million ($.13 per share after taxes).  Results from both of the divested businesses are disclosed as discontinued operations.

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Conference Call
Brink's will host a conference call on January 30 at 11:00 a.m. Eastern Time to review fourth-quarter results.  Interested parties can listen by calling (877) 870-4263 (in the U.S.) or (412) 317-0790 (international) Participants should call in at least five minutes prior to the start of the call.  Participants can pre-register at http://dpregister.com/10039412  to receive a direct dial-in number for the call.  The call also will be accessible via live webcast at www.Brinks.com.  A replay of the call will be available through February 14, 2014, at (877) 344-7529 (in the U.S.) or (412) 317-0088 (international).  The conference number is 10039412.  A webcast replay will also be available at www.Brinks.com.

About The Brink's Company
The Brink's Company (NYSE: BCO) is the world's premier provider of secure transportation and cash management services.  For more information, please visit The Brink's Company website at www.Brinks.com or call 804-289-9709.

Non-GAAP Results
Non-GAAP results described in this earnings release are financial measures that are not required by or presented in accordance with U.S. generally accepted accounting principles ("GAAP").  The purpose of the non-GAAP results is to report financial information without certain income and expense items and adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in each of the quarters is equal to the full-year non-GAAP tax rate.  The full year non-GAAP tax rate in both years excludes certain pretax and tax income and expense amounts.  The non-GAAP information provides information to assist comparability and estimates of future performance.  Brink's believes these measures are helpful in assessing operations and estimating future results and enable period-to-period comparability of financial performance.  In addition, Brink's believes the measures will help investors assess the ongoing operations and provide an alternative for valuing legacy liabilities.  Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts.

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Forward-Looking Statements
Financial information for the fourth quarter and full year 2013 included in this release is unaudited and remains subject to the completion of the external audit. This release contains both historical and forward-looking information. Words such as "anticipates," "assumes," "estimates," "expects," "projects," "predicts," "intends," "plans," "believes," "potential," "may," "should" and similar expressions may identify forward-looking information. Forward-looking information in this release includes, but is not limited to, anticipated revenue, segment operating profit, currency impact on revenue, segment margin, non-segment expense, interest expense, income tax rate, non-controlling interest expense, capital expenditures, fixed asset acquisitions, capital leases and depreciation and amortization for 2014, and future exchange rates used to report Venezuela results.  Forward-looking information in this document is subject to known and unknown risks, uncertainties and contingencies, which are difficult to predict or quantify, and which could cause actual results, performance or achievements to differ materially from those that are anticipated.

These risks, uncertainties and contingencies, many of which are beyond our control, include, but are not limited to:

• continuing market volatility and commodity price fluctuations and their impact on the demand for our services,
• our ability to continue profit growth in Latin America,
• our ability to maintain or improve volumes at favorable pricing levels and increase cost efficiencies in the United States and Europe,
• investments in information technology and value-added services and their impact on revenue and profit growth,
• our ability to develop and implement solutions for our customers and gain market acceptance of those solutions,
• our ability to maintain an effective IT infrastructure and safeguard confidential information,
• risks customarily associated with operating in foreign countries including changing labor and economic conditions, currency devaluations, safety and security issues, political instability, restrictions on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive government actions,
• the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates,
• the stability of the Venezuelan economy, changes in Venezuelan policy regarding foreign-owned businesses,
• changes in currency restrictions and in foreign exchange rates,
• fluctuations in value of the Venezuelan bolivar fuerte,
• regulatory and labor issues in many of our global operations, including negotiations with organized labor and the possibility of work stoppages,
• our ability to identify and execute further cost and operational improvements and efficiencies in our core businesses,
• our ability to integrate successfully recently acquired companies and improve their operating profit margins,
• costs related to dispositions and market exits,
• our ability to identify, evaluate and pursue acquisitions and other strategic opportunities, including those in the home security industry and emerging markets,
• the willingness of our customers to absorb price increases and surcharges, including those related to fuel or labor costs,
• our ability to obtain necessary information technology and other services at favorable pricing levels from third party service providers,
• variations in costs or expenses and performance delays of any public or private sector supplier, service provider or customer,
• our ability to obtain appropriate insurance coverage, positions taken by insurers with respect to claims made and the financial condition of insurers, safety and security performance, our loss experience, and changes in insurance costs,
• security threats worldwide and losses of customer valuables,
• costs associated with the purchase and implementation of cash processing and security equipment,
• employee and environmental liabilities in connection with our former coal operations, black lung claims incidence,
• the impact of the Patient Protection and Affordable Care Act on black lung liability and the Company's ongoing operations,
• changes to estimated liabilities and assets in actuarial assumptions due to payments made, investment returns, interest rates and annual actuarial revaluations, the funding requirements, accounting treatment, investment performance and costs and expenses of our pension plans, the VEBA and other employee benefits, mandatory or voluntary pension plan contributions,
• the nature of our hedging relationships,
• changes in estimates and assumptions underlying our critical accounting policies,
• our ability to realize deferred tax assets,
• the outcome of pending and future claims, litigation and administrative proceedings,
• public perception of the Company's business and reputation,
• access to the capital and credit markets,
• seasonality, pricing and other competitive industry factors, and
• the promulgation and adoption of new accounting standards and interpretations, new government regulations and interpretations of existing regulations.

This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2012, and in our other public filings with the Securities and Exchange Commission. The forward-looking information included in this document is representative only as of the date of this document and The Brink's Company undertakes no obligation to update any information contained in this document.

Contact:
Investor Relations
804.289.9709

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