Fourth-Quarter Non-GAAP EPS $.55 vs $.58: GAAP
($.07) vs ($.52)
The Brink’s Company (NYSE:BCO), a global leader in security-related
services, today reported fourth-quarter earnings.
Fourth-Quarter Highlights
GAAP:
- EPS ($.07) vs ($.52); revenue down 13% (11% organic growth);
operating profit $33 million vs $(24) million
Non-GAAP:
- EPS $.55 vs $.58; revenue down 14% (0% organic growth);
operating margin 6.6% vs 6.9%
- Currency translation reduced revenue by $117 million, operating
profit by $16 million, EPS by $.20
- Operating profit down 17% (10% organic growth); organic growth
in Argentina, Brazil, Mexico and Asia offset by declines in U.S.
and EMEA and currency
- Corporate expense down $5 million; lower tax rate and interest
expense
Full-Year Highlights
GAAP
- EPS ($.19) vs ($1.12); revenue down 14% (11% organic growth);
operating profit $57 million vs $(28) million
Non-GAAP:
- EPS $1.69 vs $1.01; revenue down 11% (3% organic growth);
operating margin 5.3% vs 3.7%
- Currency translation reduced revenue by $467 million, operating
profit by $50 million, EPS by $.64
- Operating profit up 26% (66% organic growth); strong organic
growth in Argentina, Mexico and Asia offsets declines in U.S. and
EMEA and currency
- Corporate expense down $31 million; lower tax rate and interest
expense
Tom Schievelbein, chairman, president and chief executive
officer, said: “Fourth-quarter non-GAAP earnings came in well ahead
of the guidance we provided in October and capped a year of strong
profit growth. Results for the quarter were driven primarily
by organic profit growth in Argentina, Brazil, Mexico and Asia,
combined with reduced corporate expenses and a substantially lower
tax rate. These factors were offset by profit declines in the
U.S. and Europe and persistent currency headwinds. On a constant
currency basis, fourth-quarter non-GAAP EPS rose 29% over a very
strong year-ago quarter, and full-year non-GAAP EPS more than
doubled.
“Despite continuing challenges in the U.S., our 2015 results
reflect significant progress in our turnaround efforts in Mexico
and disciplined execution in our cost reduction efforts. In
2016, we expect substantial profit growth in the U.S., continued
improvement in Mexico, and ongoing cost reductions to help us
achieve non-GAAP earnings in the $2.00 to $2.20 per share range on
revenue of approximately $ 2.8 billion.”
Summary of
Fourth-Quarter and Full-Year Results(a) |
|
|
Fourth Quarter |
|
Full Year |
|
(In millions, except for per share amounts) |
2015 |
|
2014 |
|
% Change |
|
2015 |
|
2014 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
766 |
|
|
881 |
|
|
(13 |
) |
|
$ |
3,061 |
|
|
3,562 |
|
|
(14 |
) |
|
Operating profit (loss) |
33 |
|
|
(24 |
) |
|
fav |
|
|
57 |
|
|
(28 |
) |
|
fav |
|
|
Income (loss) from continuing operations(b) |
(3 |
) |
|
(26 |
) |
|
(87 |
) |
|
(9 |
) |
|
(55 |
) |
|
(83 |
) |
|
Diluted EPS from continuing operations(b) |
(0.07 |
) |
|
(0.52 |
) |
|
(87 |
) |
|
(0.19 |
) |
|
(1.12 |
) |
|
(83 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP revenues |
$ |
733 |
|
|
848 |
|
|
(14 |
) |
|
$ |
2,977 |
|
|
3,351 |
|
|
(11 |
) |
|
Non-GAAP operating profit |
49 |
|
|
59 |
|
|
(17 |
) |
|
157 |
|
|
124 |
|
|
26 |
|
|
Non-GAAP income from continuing operations(b) |
27 |
|
|
28 |
|
|
(3 |
) |
|
84 |
|
|
49 |
|
|
70 |
|
|
Non-GAAP diluted EPS from continuing operations(b) |
0.55 |
|
|
0.58 |
|
|
(5 |
) |
|
1.69 |
|
|
1.01 |
|
|
67 |
|
|
Summary Reconciliation of Fourth Quarter and Full Year GAAP
to Non-GAAP EPS(a) |
|
|
Fourth Quarter |
|
Full Year |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
GAAP EPS |
$ |
(0.07 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.12 |
) |
|
Venezuela operations(c) |
(0.11 |
) |
|
0.01 |
|
|
0.64 |
|
|
1.28 |
|
|
Reorganization and Restructuring costs(d) |
0.18 |
|
|
0.31 |
|
|
0.23 |
|
|
0.31 |
|
|
U.S. and Mexican retirement plans |
0.10 |
|
|
0.80 |
|
|
0.41 |
|
|
1.03 |
|
|
Acquisitions and dispositions |
0.13 |
|
|
— |
|
|
0.12 |
|
|
(0.54 |
) |
|
Share-based compensation adjustment |
— |
|
|
— |
|
|
— |
|
|
0.04 |
|
|
U.S. tax on accelerated U.S. income (e) |
0.47 |
|
|
— |
|
|
0.47 |
|
|
— |
|
|
Income tax rate adjustment(f) |
(0.15 |
) |
|
(0.01 |
) |
|
— |
|
|
— |
|
|
Non-GAAP EPS |
$ |
0.55 |
|
|
$ |
0.58 |
|
|
$ |
1.69 |
|
|
$ |
1.01 |
|
|
Amounts may not add due to rounding.
(a) Non-GAAP results are reconciled to the applicable GAAP
results on pages 15-16. (b) Amounts reported are attributable
to shareholders of The Brink’s Company and exclude earnings related
to noncontrolling interests.(c) Given the inability to repatriate
cash, hyperinflation, fixed exchange rate policy, continued
currency devaluations, and the difficulty raising prices and
controlling costs, beginning in the first quarter 2015, our
non-GAAP results exclude Venezuela operations. Management believes
excluding Venezuela enables investors to more effectively evaluate
the company’s performance between periods. In the second
quarter of 2015, Brink’s elected to evaluate and pursue strategic
options for the Venezuela business. As a result, we performed an
impairment analysis and wrote down the book value of Venezuela
property, plant and equipment to our best estimate of current fair
value.(d) Brink’s reorganized and restructured its business in
December 2014 and recognized severance costs of $21.8 million
associated with these actions in 2014. Additional charges of
$1.9 million were recognized in 2015. Brink's initiated an
additional restructuring in the third quarter of 2015 and
recognized $11.6 million in costs in the second half of 2015.
Brink's recognized $1.8 million in costs in the fourth quarter of
2015 related to executive leadership and Board of Directors
restructuring actions, which were announced in January 2016.
See page 13 for more details.(e) The non-GAAP tax rate excludes the
U.S. tax on a transaction that accelerated U.S. taxable income
because it will be offset by foreign tax benefits in future
years.(f) The effective income tax rate in the interim period is
adjusted to be equal to the estimated full-year non-GAAP effective
income tax rate. The full-year non-GAAP effective tax rate
was 37.0% for 2015 and 45.7% for 2014.
The Brink’s Company and subsidiaries (In
millions) (Unaudited)
Fourth-Quarter 2015 vs. 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic |
|
Acquisitions / |
|
|
|
|
|
% Change |
|
|
4Q'14 |
|
Change |
|
Dispositions(a) |
|
Currency(b) |
|
4Q'15 |
|
Total |
|
Organic |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
190 |
|
|
(10 |
) |
|
— |
|
|
— |
|
|
180 |
|
|
(5 |
) |
|
(5 |
) |
|
France |
123 |
|
|
— |
|
|
— |
|
|
(15 |
) |
|
108 |
|
|
(12 |
) |
|
— |
|
|
Mexico |
95 |
|
|
4 |
|
|
— |
|
|
(17 |
) |
|
82 |
|
|
(14 |
) |
|
4 |
|
|
Brazil |
90 |
|
|
9 |
|
|
— |
|
|
(34 |
) |
|
65 |
|
|
(28 |
) |
|
10 |
|
|
Canada |
44 |
|
|
— |
|
|
— |
|
|
(7 |
) |
|
37 |
|
|
(15 |
) |
|
— |
|
|
Largest 5 Markets |
542 |
|
|
3 |
|
|
— |
|
|
(73 |
) |
|
472 |
|
|
(13 |
) |
|
— |
|
|
Latin America |
102 |
|
|
15 |
|
|
— |
|
|
(20 |
) |
|
96 |
|
|
(5 |
) |
|
15 |
|
|
EMEA |
143 |
|
|
(23 |
) |
|
— |
|
|
(15 |
) |
|
105 |
|
|
(26 |
) |
|
(16 |
) |
|
Asia |
37 |
|
|
4 |
|
|
2 |
|
|
(2 |
) |
|
40 |
|
|
11 |
|
|
11 |
|
|
Global Markets |
281 |
|
|
(4 |
) |
|
2 |
|
|
(37 |
) |
|
242 |
|
|
(14 |
) |
|
(1 |
) |
|
Payment Services |
25 |
|
|
2 |
|
|
— |
|
|
(8 |
) |
|
19 |
|
|
(23 |
) |
|
8 |
|
|
Revenues - non-GAAP |
848 |
|
|
— |
|
|
2 |
|
|
(117 |
) |
|
733 |
|
|
(14 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to segments(d) |
33 |
|
|
97 |
|
|
— |
|
|
(97 |
) |
|
33 |
|
|
(2 |
) |
|
fav |
|
|
Revenues - GAAP |
$ |
881 |
|
|
97 |
|
|
2 |
|
|
(214 |
) |
|
766 |
|
|
(13 |
) |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
12 |
|
|
(13 |
) |
|
— |
|
|
— |
|
|
(1 |
) |
|
unfav |
|
|
unfav |
|
|
France |
11 |
|
|
— |
|
|
— |
|
|
(1 |
) |
|
10 |
|
|
(9 |
) |
|
4 |
|
|
Mexico |
7 |
|
|
3 |
|
|
— |
|
|
(2 |
) |
|
8 |
|
|
17 |
|
|
38 |
|
|
Brazil |
14 |
|
|
4 |
|
|
— |
|
|
(6 |
) |
|
12 |
|
|
(17 |
) |
|
24 |
|
|
Canada |
4 |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
3 |
|
|
(27 |
) |
|
(12 |
) |
|
Largest 5 Markets |
49 |
|
|
(7 |
) |
|
— |
|
|
(9 |
) |
|
33 |
|
|
(33 |
) |
|
(14 |
) |
|
Latin America |
18 |
|
|
11 |
|
|
— |
|
|
(6 |
) |
|
23 |
|
|
26 |
|
|
59 |
|
|
EMEA |
16 |
|
|
(6 |
) |
|
— |
|
|
(1 |
) |
|
9 |
|
|
(43 |
) |
|
(37 |
) |
|
Asia |
7 |
|
|
3 |
|
|
1 |
|
|
— |
|
|
9 |
|
|
39 |
|
|
38 |
|
|
Global Markets |
41 |
|
|
7 |
|
|
1 |
|
|
(7 |
) |
|
41 |
|
|
1 |
|
|
18 |
|
|
Payment Services |
(2 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
|
— |
|
|
15 |
|
|
Corporate items(c) |
(29 |
) |
|
5 |
|
|
— |
|
|
— |
|
|
(23 |
) |
|
(19 |
) |
|
(19 |
) |
|
Operating profit - non-GAAP |
59 |
|
|
6 |
|
|
1 |
|
|
(16 |
) |
|
49 |
|
|
(17 |
) |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to segments(d) |
(82 |
) |
|
110 |
|
|
(6 |
) |
|
(37 |
) |
|
(16 |
) |
|
(81 |
) |
|
fav |
|
|
Operating profit (loss) - GAAP |
$ |
(24 |
) |
|
116 |
|
|
(6 |
) |
|
(53 |
) |
|
33 |
|
|
fav |
|
|
fav |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add due to rounding.
(a) Includes operating results and gains/losses on acquisitions,
sales and exits of businesses. The 2014 divestiture of an
equity interest in a business in Peru is included in “Other items
not allocated to segments”.(b) The amounts in the “Currency” column
consist of the amortization of Venezuela non-monetary assets not
devalued under highly inflationary accounting rules and the sum of
monthly currency changes. Monthly currency changes represent the
accumulation throughout the year of the impact on current period
results of changes in foreign currency rates from the prior year
period. (c) Corporate expenses are not allocated to segment
results. Corporate expenses include salaries and other costs
to manage the global business and to perform activities required by
public companies.(d) See pages 13 and 14 for more information.
The Brink’s Company and subsidiaries (In
millions) (Unaudited)
Full-Year 2015
vs. 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic |
|
Acquisitions / |
|
|
|
|
|
% Change |
|
|
YTD '14 |
|
Change |
|
Dispositions(a) |
|
Currency(b) |
|
YTD '15 |
|
Total |
|
Organic |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
728 |
|
|
3 |
|
|
— |
|
|
— |
|
|
730 |
|
|
— |
|
|
— |
|
|
France |
517 |
|
|
— |
|
|
— |
|
|
(86 |
) |
|
432 |
|
|
(17 |
) |
|
— |
|
|
Mexico |
388 |
|
|
9 |
|
|
— |
|
|
(64 |
) |
|
333 |
|
|
(14 |
) |
|
2 |
|
|
Brazil |
364 |
|
|
18 |
|
|
— |
|
|
(111 |
) |
|
270 |
|
|
(26 |
) |
|
5 |
|
|
Canada |
180 |
|
|
(2 |
) |
|
— |
|
|
(24 |
) |
|
154 |
|
|
(14 |
) |
|
(1 |
) |
|
Largest 5 Markets |
2,177 |
|
|
27 |
|
|
— |
|
|
(285 |
) |
|
1,919 |
|
|
(12 |
) |
|
1 |
|
|
Latin America |
381 |
|
|
58 |
|
|
— |
|
|
(69 |
) |
|
370 |
|
|
(3 |
) |
|
15 |
|
|
EMEA |
556 |
|
|
(38 |
) |
|
— |
|
|
(74 |
) |
|
445 |
|
|
(20 |
) |
|
(7 |
) |
|
Asia |
140 |
|
|
18 |
|
|
9 |
|
|
(10 |
) |
|
157 |
|
|
13 |
|
|
13 |
|
|
Global Markets |
1,077 |
|
|
39 |
|
|
9 |
|
|
(153 |
) |
|
972 |
|
|
(10 |
) |
|
4 |
|
|
Payment Services |
97 |
|
|
19 |
|
|
— |
|
|
(30 |
) |
|
86 |
|
|
(11 |
) |
|
20 |
|
|
Revenues - non-GAAP |
3,351 |
|
|
85 |
|
|
9 |
|
|
(467 |
) |
|
2,977 |
|
|
(11 |
) |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to segments(d) |
212 |
|
|
297 |
|
|
— |
|
|
(424 |
) |
|
85 |
|
|
(60 |
) |
|
fav |
|
|
Revenues - GAAP |
$ |
3,562 |
|
|
381 |
|
|
9 |
|
|
(891 |
) |
|
3,061 |
|
|
(14 |
) |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
23 |
|
|
(8 |
) |
|
— |
|
|
— |
|
|
15 |
|
|
(34 |
) |
|
(34 |
) |
|
France |
39 |
|
|
2 |
|
|
— |
|
|
(7 |
) |
|
35 |
|
|
(12 |
) |
|
5 |
|
|
Mexico |
10 |
|
|
19 |
|
|
— |
|
|
(5 |
) |
|
24 |
|
|
fav |
|
|
fav |
|
|
Brazil |
34 |
|
|
— |
|
|
— |
|
|
(11 |
) |
|
24 |
|
|
(30 |
) |
|
— |
|
|
Canada |
13 |
|
|
— |
|
|
— |
|
|
(2 |
) |
|
11 |
|
|
(16 |
) |
|
(2 |
) |
|
Largest 5 Markets |
119 |
|
|
13 |
|
|
— |
|
|
(23 |
) |
|
109 |
|
|
(9 |
) |
|
11 |
|
|
Latin America |
50 |
|
|
39 |
|
|
— |
|
|
(13 |
) |
|
76 |
|
|
51 |
|
|
76 |
|
|
EMEA |
53 |
|
|
(14 |
) |
|
— |
|
|
(3 |
) |
|
36 |
|
|
(32 |
) |
|
(26 |
) |
|
Asia |
23 |
|
|
6 |
|
|
1 |
|
|
(1 |
) |
|
29 |
|
|
24 |
|
|
26 |
|
|
Global Markets |
126 |
|
|
31 |
|
|
1 |
|
|
(17 |
) |
|
141 |
|
|
12 |
|
|
25 |
|
|
Payment Services |
(5 |
) |
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
(7 |
) |
|
47 |
|
|
29 |
|
|
Corporate items(c) |
(116 |
) |
|
39 |
|
|
— |
|
|
(9 |
) |
|
(85 |
) |
|
(26 |
) |
|
(34 |
) |
|
Operating profit - non-GAAP |
124 |
|
|
82 |
|
|
1 |
|
|
(50 |
) |
|
157 |
|
|
26 |
|
|
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to segments(d) |
(152 |
) |
|
53 |
|
|
(55 |
) |
|
54 |
|
|
(100 |
) |
|
(34 |
) |
|
(35 |
) |
|
Operating profit (loss) - GAAP |
$ |
(28 |
) |
|
135 |
|
|
(54 |
) |
|
3 |
|
|
57 |
|
|
fav |
|
|
fav |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add due to rounding.
See page 4 for footnote explanations.
Corporate Expenses
Fourth-quarter corporate expenses totaled $23 million, down from
$29 million last year due to ongoing cost reduction efforts.
Full-year corporate expenses totaled $85 million, down from $116
million in 2014. Corporate expenses include regional
management costs, currency transaction gains and losses, costs
related to global programs and initiatives, and costs to perform
activities required by public companies.
Capital Expenditures and Capital Leases
Full-year capital expenditures and capital lease additions were
$120 million compared to $148 million in 2014. In 2016, these
expenditures are expected to total $120 million to $130
million.
Income Taxes
On a non-GAAP basis, the 2015 full-year income tax rate was 37%,
down from 46% in 2014 due primarily to the recognition of foreign
tax credits after completing a transaction that accelerated U.S.
taxable income into 2015, and higher pre-tax earnings. The
non-GAAP tax rate excludes the U.S. tax on the accelerated U.S.
taxable income because it will be offset by foreign tax benefits in
future years.
On a GAAP basis, 2015 tax expense was $67 million (effective
rate of 162%) due primarily to significant non-deductible
re-measurement and impairment charges in Venezuela and to a
transaction that accelerated U.S. taxable income into 2015.
The increased tax on the accelerated U.S. taxable income is
expected to be offset by foreign tax benefits in future
years. The 2014 GAAP effective rate of negative 75% on a
pre-tax loss resulted primarily from the significant non-deductible
re-measurement write-down in Venezuela.
Conference Call
Brink’s will host a conference call on February 4 at 11:00
a.m. Eastern Time to review fourth-quarter results.
Interested parties can listen by calling 888-349-0094 (in the U.S.)
or 412-902-0124 (international). Participants should call in at
least five minutes prior to the start of the call.
Participants can pre-register at
http://dpregister.com/10078668 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 March 4, 2016, at 877-344-7529 (in the U.S.) or
(412) 317-0088 (international). The conference number is
10078661. 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.
Forward-Looking Statements
This release contains forward-looking information. Words such as
"anticipate," "assume," "estimate," "expect," “target” "project,"
"predict," "intend," "plan," "believe," "potential," "may,"
"should" and similar expressions may identify forward-looking
information. Forward-looking information in these materials
includes, but is not limited to: 2016 non-GAAP outlook, including
revenue, operating profit, earnings per share, tax rate margin rate
(including outlook for the U.S., and Mexico businesses); and
expected cost savings from reorganization and restructuring
initiatives. 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: our ability to
improve profitability in our largest five markets; our ability to
identify and execute further cost and operational improvements and
efficiencies in our core businesses; continuing market volatility
and commodity price fluctuations and their impact on the demand for
our services; our ability to maintain or improve volumes at
favorable pricing levels and increase cost and productivity
efficiencies, particularly in the United States and Mexico;
investments in information technology and adjacent businesses 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
restrictions and devaluations, safety and security issues,
political instability, restrictions on and cost of 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; regulatory
and labor issues in many of our global operations, including
negotiations with organized labor and the possibility of work
stoppages; 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 fuel surcharges and
other future price increases; 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,
including black lung claims incidence; the impact of the Patient
Protection and Affordable Care Act on UMWA and 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; counterparty risk; 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 interpretation 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, 2014, 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.
The Brink’s Company and
subsidiariesOutlook Summary
(Unaudited) (In millions except as noted)
|
2015GAAP |
|
2015Non-GAAP(a) |
|
2016Non-GAAPOutlook(c) |
|
% Change |
Revenues(a) |
$ |
3,061 |
|
|
2,977 |
|
|
2,850 |
|
|
|
Operating profit(a) |
57 |
|
|
157 |
|
|
190 – 210 |
|
|
Nonoperating expense |
(16 |
) |
|
(15 |
) |
|
(16 |
) |
|
|
Provision for income taxes(a) |
(67 |
) |
|
(52 |
) |
|
(68) – (76) |
|
|
Noncontrolling interests(a) |
16 |
|
|
(5 |
) |
|
(5) – (7) |
|
|
Income (loss) from continuing
operations(a)(b) |
(9 |
) |
|
84 |
|
|
101 – 111 |
|
|
EPS from continuing operations(a)(b) |
$ |
(0.19 |
) |
|
1.69 |
|
|
2.00 – 2.20 |
|
|
|
|
|
|
|
|
|
|
Key Metrics |
|
|
|
|
|
|
|
Revenues Change |
|
|
|
|
|
|
|
Organic |
|
|
|
|
150 |
|
|
|
5 |
% |
Currency |
|
|
|
|
(277 |
) |
|
|
(9 |
)% |
Total |
|
|
|
|
(127 |
) |
|
|
(4 |
)% |
|
|
|
|
|
|
|
|
Operating profit margin |
1.8 |
% |
|
5.3 |
% |
|
6.7% – 7.4% |
|
|
|
|
|
|
|
|
|
|
Effective income tax rate(a) |
161.8 |
% |
|
37.0 |
% |
|
39.0 |
% |
|
|
|
|
|
|
|
|
|
|
Fixed assets acquired |
|
|
|
|
|
|
|
Capital expenditures(d) |
$ |
101 |
|
|
97 |
|
|
100 – 110 |
|
|
Capital leases(e) |
19 |
|
|
19 |
|
|
20 |
|
|
|
Total |
$ |
120 |
|
|
116 |
|
|
120 – 130 |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of
fixed assets(d) |
$ |
136 |
|
|
132 |
|
|
120 – 130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add due to rounding
Outlook for 2016
- U.S. operating profit margin of 4% - 5%
- Mexico operating profit margin of ~10%
(a) See pages 15 and 16 for reconciliation to GAAP.(b)
Attributable to Brink’s.(c) The annual consolidated non-GAAP
outlook amounts for 2016 are not reconciled to GAAP because we are
unable to quantify certain amounts that would be required to be
included in the GAAP measures without unreasonable effort.(d) 2015
non-GAAP amounts exclude Venezuela capital expenditures of $4.3
million and Venezuela depreciation and amortization of fixed assets
of $3.9 million. Depreciation and amortization of fixed assets does
not include intangible asset amortization.(e) Includes capital
leases for newly acquired assets only.
The Brink’s Company and
subsidiariesCondensed Consolidated Statements of
Operations (Unaudited) (In millions, except for per
share amounts)
|
Fourth Quarter |
|
Full Year |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
Revenues |
$ |
765.8 |
|
|
881.2 |
|
|
$ |
3,061.4 |
|
|
3,562.3 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of revenues |
605.2 |
|
|
743.0 |
|
|
2,471.6 |
|
|
2,948.2 |
|
Selling, general and
administrative expenses |
120.4 |
|
|
158.7 |
|
|
463.8 |
|
|
560.6 |
|
Total costs and expenses |
725.6 |
|
|
901.7 |
|
|
2,935.4 |
|
|
3,508.8 |
|
Other operating expense |
(7.2 |
) |
|
(3.2 |
) |
|
(69.4 |
) |
|
(81.0 |
) |
|
|
|
|
|
|
|
|
Operating profit
(loss) |
33.0 |
|
|
(23.7 |
) |
|
56.6 |
|
|
(27.5 |
) |
|
|
|
|
|
|
|
|
Interest expense |
(4.5 |
) |
|
(5.1 |
) |
|
(18.9 |
) |
|
(23.4 |
) |
Interest and other income |
1.7 |
|
|
0.9 |
|
|
3.4 |
|
|
1.9 |
|
Income (loss) from continuing
operations before tax |
30.2 |
|
|
(27.9 |
) |
|
41.1 |
|
|
(49.0 |
) |
Provision (benefit) for income
taxes |
29.3 |
|
|
(2.9 |
) |
|
66.5 |
|
|
36.7 |
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
0.9 |
|
|
(25.0 |
) |
|
(25.4 |
) |
|
(85.7 |
) |
|
|
|
|
|
|
|
|
Loss from discontinued operations, net
of tax |
(0.4 |
) |
|
(21.7 |
) |
|
(2.8 |
) |
|
(29.1 |
) |
|
|
|
|
|
|
|
|
Net income
(loss) |
0.5 |
|
|
(46.7 |
) |
|
(28.2 |
) |
|
(114.8 |
) |
Less net income (loss) attributable
to noncontrolling interests |
4.1 |
|
|
0.5 |
|
|
(16.3 |
) |
|
(30.9 |
) |
|
|
|
|
|
|
|
|
Net loss attributable to
Brink’s |
$ |
(3.6 |
) |
|
(47.2 |
) |
|
$ |
(11.9 |
) |
|
(83.9 |
) |
|
|
|
|
|
|
|
|
Amounts attributable to
Brink’s: |
|
|
|
|
|
|
|
Continuing operations |
(3.2 |
) |
|
(25.5 |
) |
|
(9.1 |
) |
|
(54.8 |
) |
Discontinued operations |
(0.4 |
) |
|
(21.7 |
) |
|
(2.8 |
) |
|
(29.1 |
) |
|
|
|
|
|
|
|
|
Net loss attributable to
Brink’s |
$ |
(3.6 |
) |
|
(47.2 |
) |
|
$ |
(11.9 |
) |
|
(83.9 |
) |
|
|
|
|
|
|
|
|
Loss per share attributable to
Brink’s common shareholders(a): |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.07 |
) |
|
(0.52 |
) |
|
$ |
(0.19 |
) |
|
(1.12 |
) |
Discontinued operations |
(0.01 |
) |
|
(0.44 |
) |
|
(0.06 |
) |
|
(0.59 |
) |
Net loss |
$ |
(0.07 |
) |
|
(0.96 |
) |
|
$ |
(0.24 |
) |
|
(1.71 |
) |
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.07 |
) |
|
(0.52 |
) |
|
$ |
(0.19 |
) |
|
(1.12 |
) |
Discontinued operations |
(0.01 |
) |
|
(0.44 |
) |
|
(0.06 |
) |
|
(0.59 |
) |
Net loss |
$ |
(0.07 |
) |
|
(0.96 |
) |
|
$ |
(0.24 |
) |
|
(1.71 |
) |
|
|
|
|
|
|
|
|
Weighted-average
shares |
|
|
|
|
|
|
|
Basic |
49.4 |
|
|
49.1 |
|
|
49.3 |
|
|
49.0 |
|
Diluted |
49.4 |
|
|
49.1 |
|
|
49.3 |
|
|
49.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Earnings per share may not add due to rounding.
The Brink’s Company and
subsidiariesSupplemental Financial
Information (Unaudited) (In millions)
Selected Cash Flow Information
|
Full Year |
|
2015 |
|
2014 |
|
|
|
|
Property and
equipment acquired during the year |
|
|
|
Capital expenditures(a) |
|
|
|
Largest 5 Markets |
$ |
59.3 |
|
|
$ |
83.4 |
|
Global Markets |
28.8 |
|
|
30.0 |
|
Payment Services |
1.7 |
|
|
0.8 |
|
Corporate items |
7.0 |
|
|
16.5 |
|
Capital expenditures -
non-GAAP |
96.8 |
|
|
130.7 |
|
Venezuela |
4.3 |
|
|
5.4 |
|
Capital expenditures - GAAP |
101.1 |
|
|
136.1 |
|
|
|
|
|
Capital Leases(b) |
|
|
|
Largest 5 Markets |
18.8 |
|
|
10.6 |
|
Global Markets |
— |
|
|
0.3 |
|
Payment Services |
0.1 |
|
|
1.2 |
|
Corporate items |
— |
|
|
— |
|
Capital leases - GAAP and
non-GAAP |
18.9 |
|
|
12.1 |
|
|
|
|
|
Total |
|
|
|
Largest 5 Markets |
78.1 |
|
|
94.0 |
|
Global Markets |
28.8 |
|
|
30.3 |
|
Payment Services |
1.8 |
|
|
2.0 |
|
Corporate items |
7.0 |
|
|
16.5 |
|
Total - non-GAAP |
115.7 |
|
|
|
142.8 |
|
Venezuela |
4.3 |
|
|
5.4 |
|
Total - GAAP |
$ |
120.0 |
|
|
$ |
148.2 |
|
|
|
|
|
Depreciation
and amortization(a) |
|
|
|
Largest 5 Markets |
$ |
94.6 |
|
|
$ |
107.7 |
|
Global Markets |
27.2 |
|
|
31.3 |
|
Payment Services |
2.9 |
|
|
3.7 |
|
Corporate items |
11.3 |
|
|
9.7 |
|
Depreciation and amortization -
non-GAAP |
136.0 |
|
|
|
152.4 |
|
Venezuela |
3.9 |
|
|
9.5 |
|
Depreciation and amortization -
GAAP |
$ |
139.9 |
|
|
$ |
161.9 |
|
|
|
|
|
|
|
|
|
(a) Capital expenditures as well as depreciation and
amortization related to Venezuela have been excluded from Global
Markets.(b) Represents the amount of property and equipment
acquired using capital leases. Because 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.
The Brink’s Company and
subsidiariesSegment Results: 2014 and 2015
(Unaudited)
(In millions, except for percentages)
|
Revenues |
|
2014 |
|
2015 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
175.8 |
|
|
180.3 |
|
|
181.6 |
|
|
190.1 |
|
|
727.8 |
|
|
$ |
183.6 |
|
|
184.1 |
|
|
182.6 |
|
|
180.1 |
|
|
730.4 |
|
France |
128.8 |
|
|
133.1 |
|
|
132.7 |
|
|
122.8 |
|
|
517.4 |
|
|
105.7 |
|
|
107.4 |
|
|
110.8 |
|
|
107.6 |
|
|
431.5 |
|
Mexico |
100.2 |
|
|
98.1 |
|
|
95.1 |
|
|
94.8 |
|
|
388.2 |
|
|
85.7 |
|
|
85.1 |
|
|
80.4 |
|
|
81.8 |
|
|
333.0 |
|
Brazil |
86.4 |
|
|
91.5 |
|
|
95.8 |
|
|
90.4 |
|
|
364.1 |
|
|
73.8 |
|
|
67.7 |
|
|
63.6 |
|
|
65.3 |
|
|
270.4 |
|
Canada |
44.4 |
|
|
45.3 |
|
|
46.0 |
|
|
44.0 |
|
|
179.7 |
|
|
38.8 |
|
|
39.6 |
|
|
37.9 |
|
|
37.4 |
|
|
153.7 |
|
Largest 5 Markets |
535.6 |
|
|
548.3 |
|
|
551.2 |
|
|
542.1 |
|
|
2,177.2 |
|
|
487.6 |
|
|
483.9 |
|
|
475.3 |
|
|
472.2 |
|
|
1,919.0 |
|
Latin America |
90.6 |
|
|
93.1 |
|
|
95.4 |
|
|
101.5 |
|
|
380.6 |
|
|
90.8 |
|
|
91.2 |
|
|
91.7 |
|
|
96.2 |
|
|
369.9 |
|
EMEA |
136.9 |
|
|
137.5 |
|
|
139.1 |
|
|
142.8 |
|
|
556.3 |
|
|
115.7 |
|
|
112.3 |
|
|
111.5 |
|
|
105.2 |
|
|
444.7 |
|
Asia |
33.0 |
|
|
34.0 |
|
|
36.3 |
|
|
36.5 |
|
|
139.8 |
|
|
38.7 |
|
|
38.6 |
|
|
39.7 |
|
|
40.4 |
|
|
157.4 |
|
Global Markets |
260.5 |
|
|
264.6 |
|
|
270.8 |
|
|
280.8 |
|
|
1,076.7 |
|
|
245.2 |
|
|
242.1 |
|
|
242.9 |
|
|
241.8 |
|
|
972.0 |
|
Payment Services |
22.2 |
|
|
23.8 |
|
|
25.4 |
|
|
25.2 |
|
|
96.6 |
|
|
22.8 |
|
|
22.1 |
|
|
21.7 |
|
|
19.3 |
|
|
85.9 |
|
Revenue -
non-GAAP |
818.3 |
|
|
836.7 |
|
|
847.4 |
|
|
848.1 |
|
|
3,350.5 |
|
|
755.6 |
|
|
748.1 |
|
|
739.9 |
|
|
733.3 |
|
|
2,976.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to
segments(a) |
131.3 |
|
|
22.3 |
|
|
25.1 |
|
|
33.1 |
|
|
211.8 |
|
|
20.5 |
|
|
12.2 |
|
|
19.3 |
|
|
32.5 |
|
|
84.5 |
|
Revenues -
GAAP |
$ |
949.6 |
|
|
859.0 |
|
|
872.5 |
|
|
881.2 |
|
|
3,562.3 |
|
|
$ |
776.1 |
|
|
760.3 |
|
|
759.2 |
|
|
765.8 |
|
|
3,061.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit |
|
2014 |
|
2015 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
Operating
profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
$ |
1.3 |
|
|
5.9 |
|
|
3.9 |
|
|
11.7 |
|
|
22.8 |
|
|
$ |
8.3 |
|
|
6.4 |
|
|
1.4 |
|
|
(1.0 |
) |
|
15.1 |
|
France |
6.6 |
|
|
4.9 |
|
|
16.7 |
|
|
11.2 |
|
|
39.4 |
|
|
4.1 |
|
|
6.7 |
|
|
13.7 |
|
|
10.2 |
|
|
34.7 |
|
Mexico |
3.7 |
|
|
(0.9 |
) |
|
(0.4 |
) |
|
7.2 |
|
|
9.6 |
|
|
7.9 |
|
|
4.5 |
|
|
3.4 |
|
|
8.4 |
|
|
24.2 |
|
Brazil |
9.7 |
|
|
5.4 |
|
|
4.8 |
|
|
14.3 |
|
|
34.2 |
|
|
6.1 |
|
|
2.1 |
|
|
3.7 |
|
|
11.9 |
|
|
23.8 |
|
Canada |
2.3 |
|
|
2.4 |
|
|
4.0 |
|
|
4.1 |
|
|
12.8 |
|
|
1.7 |
|
|
2.4 |
|
|
3.6 |
|
|
3.0 |
|
|
10.7 |
|
Largest 5 Markets |
23.6 |
|
|
17.7 |
|
|
29.0 |
|
|
48.5 |
|
|
118.8 |
|
|
28.1 |
|
|
22.1 |
|
|
25.8 |
|
|
32.5 |
|
|
108.5 |
|
Latin America |
10.1 |
|
|
11.4 |
|
|
10.7 |
|
|
18.2 |
|
|
50.4 |
|
|
16.5 |
|
|
19.2 |
|
|
17.6 |
|
|
23.0 |
|
|
76.3 |
|
EMEA |
9.2 |
|
|
12.0 |
|
|
15.5 |
|
|
15.8 |
|
|
52.5 |
|
|
8.2 |
|
|
9.1 |
|
|
9.4 |
|
|
9.0 |
|
|
35.7 |
|
Asia |
5.2 |
|
|
5.1 |
|
|
6.2 |
|
|
6.6 |
|
|
23.1 |
|
|
6.5 |
|
|
5.9 |
|
|
7.1 |
|
|
9.2 |
|
|
28.7 |
|
Global Markets |
24.5 |
|
|
28.5 |
|
|
32.4 |
|
|
40.6 |
|
|
126.0 |
|
|
31.2 |
|
|
34.2 |
|
|
34.1 |
|
|
41.2 |
|
|
140.7 |
|
Payment Services |
0.8 |
|
|
(1.3 |
) |
|
(2.4 |
) |
|
(2.0 |
) |
|
(4.9 |
) |
|
0.5 |
|
|
(3.7 |
) |
|
(2.0 |
) |
|
(2.0 |
) |
|
(7.2 |
) |
Corporate items |
(28.1 |
) |
|
(20.9 |
) |
|
(38.2 |
) |
|
(28.5 |
) |
|
(115.7 |
) |
|
(19.2 |
) |
|
(22.0 |
) |
|
(20.9 |
) |
|
(23.1 |
) |
|
(85.2 |
) |
Operating profit -
non-GAAP |
20.8 |
|
|
24.0 |
|
|
20.8 |
|
|
58.6 |
|
|
124.2 |
|
|
40.6 |
|
|
30.6 |
|
|
37.0 |
|
|
48.6 |
|
|
156.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to
segments(a) |
(94.5 |
) |
|
(15.3 |
) |
|
40.4 |
|
|
(82.3 |
) |
|
(151.7 |
) |
|
(27.7 |
) |
|
(45.2 |
) |
|
(11.7 |
) |
|
(15.6 |
) |
|
(100.2 |
) |
Operating profit (loss) -
GAAP |
$ |
(73.7 |
) |
|
8.7 |
|
|
61.2 |
|
|
(23.7 |
) |
|
(27.5 |
) |
|
$ |
12.9 |
|
|
(14.6 |
) |
|
25.3 |
|
|
33.0 |
|
|
56.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin |
|
2014 |
|
2015 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
0.7 |
% |
|
3.3 |
|
|
2.1 |
|
|
6.2 |
|
|
3.1 |
|
|
4.5 |
% |
|
3.5 |
|
|
0.8 |
|
|
(0.6 |
) |
|
2.1 |
|
France |
5.1 |
|
|
3.7 |
|
|
12.6 |
|
|
9.1 |
|
|
7.6 |
|
|
3.9 |
|
|
6.2 |
|
|
12.4 |
|
|
9.5 |
|
|
8.0 |
|
Mexico |
3.7 |
|
|
(0.9 |
) |
|
(0.4 |
) |
|
7.6 |
|
|
2.5 |
|
|
9.2 |
|
|
5.3 |
|
|
4.2 |
|
|
10.3 |
|
|
7.3 |
|
Brazil |
11.2 |
|
|
5.9 |
|
|
5.0 |
|
|
15.8 |
|
|
9.4 |
|
|
8.3 |
|
|
3.1 |
|
|
5.8 |
|
|
18.2 |
|
|
8.8 |
|
Canada |
5.2 |
|
|
5.3 |
|
|
8.7 |
|
|
9.3 |
|
|
7.1 |
|
|
4.4 |
|
|
6.1 |
|
|
9.5 |
|
|
8.0 |
|
|
7.0 |
|
Largest 5 Markets |
4.4 |
|
|
3.2 |
|
|
5.3 |
|
|
8.9 |
|
|
5.5 |
|
|
5.8 |
|
|
4.6 |
|
|
5.4 |
|
|
6.9 |
|
|
5.7 |
|
Latin America |
11.1 |
|
|
12.2 |
|
|
11.2 |
|
|
17.9 |
|
|
13.2 |
|
|
18.2 |
|
|
21.1 |
|
|
19.2 |
|
|
23.9 |
|
|
20.6 |
|
EMEA |
6.7 |
|
|
8.7 |
|
|
11.1 |
|
|
11.1 |
|
|
9.4 |
|
|
7.1 |
|
|
8.1 |
|
|
8.4 |
|
|
8.6 |
|
|
8.0 |
|
Asia |
15.8 |
|
|
15.0 |
|
|
17.1 |
|
|
18.1 |
|
|
16.5 |
|
|
16.8 |
|
|
15.3 |
|
|
17.9 |
|
|
22.8 |
|
|
18.2 |
|
Global Markets |
9.4 |
|
|
10.8 |
|
|
12.0 |
|
|
14.5 |
|
|
11.7 |
|
|
12.7 |
|
|
14.1 |
|
|
14.0 |
|
|
17.0 |
|
|
14.5 |
|
Payment Services |
3.6 |
|
|
(5.5 |
) |
|
(9.4 |
) |
|
(7.9 |
) |
|
(5.1 |
) |
|
2.2 |
|
|
(16.7 |
) |
|
(9.2 |
) |
|
(10.4 |
) |
|
(8.4 |
) |
Corporate items |
(3.4 |
) |
|
(2.5 |
) |
|
(4.5 |
) |
|
(3.4 |
) |
|
(3.5 |
) |
|
(2.5 |
) |
|
(2.9 |
) |
|
(2.8 |
) |
|
(3.2 |
) |
|
(2.9 |
) |
Operating profit -
non-GAAP |
2.5 |
|
|
2.9 |
|
|
2.5 |
|
|
6.9 |
|
|
3.7 |
|
|
5.4 |
|
|
4.1 |
|
|
5.0 |
|
|
6.6 |
|
|
5.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items not allocated to
segments(a) |
(10.3 |
) |
|
(1.9 |
) |
|
4.6 |
|
|
(9.6 |
) |
|
(4.5 |
) |
|
(3.7 |
) |
|
(6.0 |
) |
|
(1.7 |
) |
|
(2.3 |
) |
|
(3.5 |
) |
Operating profit (loss)
-GAAP |
(7.8 |
)% |
|
1.0 |
|
|
7.0 |
|
|
(2.7 |
) |
|
(0.8 |
) |
|
1.7 |
% |
|
(1.9 |
) |
|
3.3 |
|
|
4.3 |
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See pages 13 and 14 for more information.
The Brink’s Company and
subsidiariesOther Items Not Allocated To Segments
(Unaudited)
(In millions)
Brink’s measures its segment results before income and expenses
for corporate activities and for certain other items. A
summary of the other items not allocated to segment results is
below.
Other items not allocated to segments
|
2014 |
|
2015 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venezuela operations |
$ |
131.3 |
|
|
22.3 |
|
|
25.1 |
|
|
33.1 |
|
|
211.8 |
|
|
$ |
20.5 |
|
|
12.2 |
|
|
19.3 |
|
|
32.5 |
|
|
84.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venezuela operations |
(88.9 |
) |
|
(7.9 |
) |
|
(2.3 |
) |
|
1.2 |
|
|
(97.9 |
) |
|
(17.9 |
) |
|
(39.1 |
) |
|
(0.8 |
) |
|
10.1 |
|
|
(47.7 |
) |
Reorganization and
Restructuring |
— |
|
|
— |
|
|
— |
|
|
(21.8 |
) |
|
(21.8 |
) |
|
(1.5 |
) |
|
1.2 |
|
|
(2.9 |
) |
|
(12.1 |
) |
|
(15.3 |
) |
U.S. and Mexican retirement
plans |
(6.8 |
) |
|
(4.5 |
) |
|
(6.0 |
) |
|
(61.7 |
) |
|
(79.0 |
) |
|
(8.3 |
) |
|
(7.6 |
) |
|
(8.0 |
) |
|
(7.3 |
) |
|
(31.2 |
) |
Acquisitions and dispositions |
1.2 |
|
|
1.3 |
|
|
46.9 |
|
|
— |
|
|
49.4 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
(6.3 |
) |
|
(6.0 |
) |
Share-based compensation adj. |
— |
|
|
(4.2 |
) |
|
1.8 |
|
|
— |
|
|
(2.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Operating profit |
$ |
(94.5 |
) |
|
(15.3 |
) |
|
40.4 |
|
|
(82.3 |
) |
|
(151.7 |
) |
|
$ |
(27.7 |
) |
|
(45.2 |
) |
|
(11.7 |
) |
|
(15.6 |
) |
|
(100.2 |
) |
Venezuela operations We have excluded from
our segment results all of our Venezuela operating results,
including expenses related to currency devaluations ($34.3 million
in 2015 and $142.7 million in 2014) and charges related to the
impairment of property, plant and equipment ($35.3 million,
majority of which was recognized in the second quarter of 2015),
due to management’s inability to allocate, generate or redeploy
resources in-country or globally. In light of these unique
circumstances, the Venezuela business is largely independent of the
rest of our global operations. As a result, the CODM, the
Company’s Chief Executive Officer, assesses segment performance and
makes resource decisions by segment excluding Venezuela operating
results. Additionally, management believes excluding
Venezuela from segment results makes it possible to more
effectively evaluate the company’s performance between periods.
Factors considered by management in excluding Venezuela results
include:
- Continued inability to repatriate cash to redeploy to other
operations or dividend to shareholders
- Highly inflationary environment
- Fixed exchange rate policy
- Continued currency devaluations and
- Difficulty raising prices and controlling costs
Reorganization and Restructuring Brink’s
reorganized and restructured its business in December 2014,
eliminating the management roles and structures in its former Latin
America and EMEA regions and implementing a plan to reduce the cost
structure of various country operations by eliminating
approximately 1,700 positions across its global workforce.
Severance costs of $21.8 million associated with these actions were
recognized in 2014. An additional $1.9 million was recognized
in 2015 related to the 2014 restructuring. Brink's initiated
an additional restructuring of its business in the third quarter of
2015. We recognized $11.6 million in 2015 costs related to
employee severance, contract terminations, and property impairment
associated with the 2015 restructuring, which is expected to reduce
the global workforce by an additional 1,000 to 1,200 positions and
is projected to result in $25 to $35 million in 2016 cost
savings. In addition, in 2015, we recognized $1.8 million in
charges related to executive leadership and Board of Directors
restructuring actions, which were announced in January 2016. We
expect to recognize between $5 and $10 million of additional
restructuring costs in 2016. These amounts have not been
allocated to segment results.
U.S. and Mexican retirement plans Costs
related to our frozen U.S. retirement plans have not been allocated
to segment results. Brink’s primary U.S. pension plan settled a
portion of its obligation in the fourth quarter of 2014 under a
lump sum buy-out offer. Approximately 4,300 terminated participants
were paid about $150 million of plan assets under this offer in
lieu of receiving their pension benefit. A $56 million settlement
loss was recognized as a result of the settlement. Employee
termination costs in Mexico are accounted for as retirement
benefits under FASB ASC Topic 715, Compensation — Retirement
Benefits. Settlement charges ($4.6 million in 2015 and $5.9 million
in 2014) related to these termination benefits in Mexico have not
been allocated to segment results.
Acquisitions and dispositions Gains and
losses related to acquisitions and dispositions that have not been
allocated to segment results are described below:
- Brink’s sold an equity investment in a CIT business in Peru and
recognized a $44.3 million gain in the third quarter of
2014. The gain on the sale and the equity earnings have not
been allocated to segment results.
- A favorable adjustment to the 2010 business acquisition gain
for Mexico ($0.7 million in the third quarter of 2014) is not
allocated to segment results.
- A favorable adjustment to the purchase price of a third quarter
2014 business acquisition in EMEA ($0.3 million in the second
quarter of 2015) is not allocated to segment results.
- Brink's sold its 70% interest in a cash management business in
Russia in the fourth quarter of 2015 and recognized a $5.9 million
loss on the sale.
- Brink's recognized $0.4 million in pretax charges in the fourth
quarter of 2015 related to a real estate transaction in
Mexico. The transaction did not qualify for sale-leaseback
accounting under U.S. GAAP rules due to continuing involvement with
the property. A financing liability of $14 million was
recognized for the cash proceeds received in the transaction.
When the continuing involvement conditions expire, a gain will be
recognized, equal to the difference between the financing liability
and the remaining net book value of the property.
Share-based compensation adjustment Accounting
adjustments related to share-based compensation have not been
allocated to segment results ($4.2 million expense in the second
quarter of 2014 and a $1.8 million benefit in the third quarter of
2014). The accounting adjustments revised the accounting for
certain share-based awards from fixed to variable fair value
accounting. As of July 11, 2014, all outstanding equity
awards had met the conditions for a grant date as defined in ASC
Topic 718 and have since been accounted for as fixed share-based
compensation expense.
The Brink’s Company and
subsidiariesNon-GAAP Results Reconciled to GAAP
(Unaudited) (In millions, except for percentages and
per share amounts)
Non-GAAP results described in this press 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
excluding income and expenses that have not been allocated to
segments (except for Corporate expenses which include salaries and
other costs to manage the global business and to perform activities
required by public companies). Non-GAAP results also 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. Amounts
reported for prior periods have been updated in this report to
present information consistently for all periods presented.
Our Non-GAAP results now exclude Venezuela operations due to our
inability to repatriate cash, the hyper inflationary economy, fixed
exchange rate policy, continued currency devaluations, and our
difficulty raising prices and controlling costs. Management
believes excluding Venezuela operating results enables investors to
more effectively evaluate the Company’s performance between
periods.
The annual consolidated Non-GAAP outlook amounts for 2016 on
page 9 are not reconciled to GAAP because we are unable to quantify
certain amounts that would be required to be included in the GAAP
measures without unreasonable effort.
The Non-GAAP information provides information to assist
comparability and estimates of future performance. Brink’s
believes these measures are helpful in assessing ongoing operations
and estimating future results and enable period-to-period
comparability of financial performance. 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.
Non-GAAP Results Reconciled to GAAP
|
2014 |
|
2015 |
|
Pre-tax |
|
Tax |
|
Effective tax rate |
|
Pre-tax |
|
Tax |
|
Effective tax rate |
Effective
Income Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
102.7 |
|
|
46.9 |
|
|
45.7 |
% |
|
$ |
141.3 |
|
|
52.3 |
|
|
37.0 |
% |
Other items not allocated to
segments(b) |
(151.7 |
) |
|
(10.2 |
) |
|
(120.6 |
)% |
|
(100.2 |
) |
|
14.2 |
|
|
124.8 |
% |
GAAP |
$ |
(49.0 |
) |
|
36.7 |
|
|
(74.9 |
)% |
|
$ |
41.1 |
|
|
66.5 |
|
|
161.8 |
% |
|
2015 |
|
4Q |
|
Full Year |
EPS: |
|
|
|
Constant currency basis
- Non-GAAP |
$ |
0.75 |
|
|
2.33 |
|
Effect of changes in currency
exchange rates(a)
|
(0.20 |
) |
|
(0.64 |
) |
Non-GAAP |
0.55 |
|
|
1.69 |
|
Other items not allocated to
segments(b) |
(0.77 |
) |
|
(1.87 |
) |
Income tax rate adjustment(c) |
0.15 |
|
|
— |
|
GAAP |
$ |
(0.07 |
) |
|
(0.19 |
) |
|
|
|
|
|
|
|
Amounts may not add due to rounding.
(a) See footnote (b) on page 4 for currency definition and
calculation between periods. For Non-GAAP EPS on a constant
currency basis, EPS is calculated for the most recent period at the
prior period's foreign currency rates to eliminate the currency
impact on EPS.(b) See “Other Items Not Allocated To Segments” on
pages 13-14 for pretax amounts and details. Other Items Not
Allocated To Segments for noncontrolling interests, income from
continuing operations attributable to Brink's and EPS are the
effects of the same items at their respective line items of the
consolidated statements of income (loss).(c) Non-GAAP income from
continuing operations and non-GAAP EPS have been adjusted to
reflect an effective income tax rate in each interim period equal
to the full-year non-GAAP effective income tax rate. The full-year
non-GAAP effective tax rate was 37.0% for 2015 and 45.7% for
2014.
The Brink’s Company and
subsidiariesNon-GAAP Results Reconciled to GAAP
(Unaudited) (In millions, except for percentages and
per share amounts)
Non-GAAP and Non-GAAP reconciled to GAAP
|
2014 |
|
2015 |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
818.3 |
|
|
836.7 |
|
|
847.4 |
|
|
848.1 |
|
|
3,350.5 |
|
|
$ |
755.6 |
|
|
748.1 |
|
|
739.9 |
|
|
733.3 |
|
|
2,976.9 |
|
Other items not allocated to
segments(b) |
131.3 |
|
|
22.3 |
|
|
25.1 |
|
|
33.1 |
|
|
211.8 |
|
|
20.5 |
|
|
12.2 |
|
|
19.3 |
|
|
32.5 |
|
|
84.5 |
|
GAAP |
$ |
949.6 |
|
|
859.0 |
|
|
872.5 |
|
|
881.2 |
|
|
3,562.3 |
|
|
$ |
776.1 |
|
|
760.3 |
|
|
759.2 |
|
|
765.8 |
|
|
3,061.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
20.8 |
|
|
24.0 |
|
|
20.8 |
|
|
58.6 |
|
|
124.2 |
|
|
$ |
40.6 |
|
|
30.6 |
|
|
37.0 |
|
|
48.6 |
|
|
156.8 |
|
Other items not allocated to
segments(b) |
(94.5 |
) |
|
(15.3 |
) |
|
40.4 |
|
|
(82.3 |
) |
|
(151.7 |
) |
|
(27.7 |
) |
|
(45.2 |
) |
|
(11.7 |
) |
|
(15.6 |
) |
|
(100.2 |
) |
GAAP |
$ |
(73.7 |
) |
|
8.7 |
|
|
61.2 |
|
|
(23.7 |
) |
|
(27.5 |
) |
|
$ |
12.9 |
|
|
(14.6 |
) |
|
25.3 |
|
|
33.0 |
|
|
56.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
6.9 |
|
|
8.5 |
|
|
6.7 |
|
|
24.8 |
|
|
46.9 |
|
|
$ |
13.4 |
|
|
9.7 |
|
|
12.2 |
|
|
17.0 |
|
|
52.3 |
|
Other items not allocated to
segments(b) |
(3.3 |
) |
|
(1.3 |
) |
|
21.5 |
|
|
(27.1 |
) |
|
(10.2 |
) |
|
(3.9 |
) |
|
— |
|
|
(1.5 |
) |
|
19.6 |
|
|
14.2 |
|
Income tax rate adjustment(c) |
5.1 |
|
|
(3.1 |
) |
|
(1.4 |
) |
|
(0.6 |
) |
|
— |
|
|
6.0 |
|
|
(2.1 |
) |
|
3.4 |
|
|
(7.3 |
) |
|
— |
|
GAAP |
$ |
8.7 |
|
|
4.1 |
|
|
26.8 |
|
|
(2.9 |
) |
|
36.7 |
|
|
$ |
15.5 |
|
|
7.6 |
|
|
14.1 |
|
|
29.3 |
|
|
66.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
0.8 |
|
|
2.1 |
|
|
2.2 |
|
|
1.3 |
|
|
6.4 |
|
|
$ |
0.8 |
|
|
1.8 |
|
|
0.8 |
|
|
1.5 |
|
|
4.9 |
|
Other items not allocated to
segments(b) |
(31.3 |
) |
|
(3.7 |
) |
|
(1.6 |
) |
|
(0.7 |
) |
|
(37.3 |
) |
|
(6.2 |
) |
|
(16.5 |
) |
|
(1.4 |
) |
|
2.9 |
|
|
(21.2 |
) |
Income tax rate adjustment(c) |
1.3 |
|
|
— |
|
|
(1.2 |
) |
|
(0.1 |
) |
|
— |
|
|
(1.1 |
) |
|
1.2 |
|
|
0.2 |
|
|
(0.3 |
) |
|
— |
|
GAAP |
$ |
(29.2 |
) |
|
(1.6 |
) |
|
(0.6 |
) |
|
0.5 |
|
|
(30.9 |
) |
|
$ |
(6.5 |
) |
|
(13.5 |
) |
|
(0.4 |
) |
|
4.1 |
|
|
(16.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Brink's: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
7.3 |
|
|
8.1 |
|
|
5.7 |
|
|
28.3 |
|
|
49.4 |
|
|
$ |
21.9 |
|
|
14.8 |
|
|
20.1 |
|
|
27.4 |
|
|
84.2 |
|
Other items not allocated to
segments(b) |
(59.9 |
) |
|
(10.3 |
) |
|
20.5 |
|
|
(54.5 |
) |
|
(104.2 |
) |
|
(17.6 |
) |
|
(28.7 |
) |
|
(8.8 |
) |
|
(38.2 |
) |
|
(93.3 |
) |
Income tax rate adjustment(c) |
(6.4 |
) |
|
3.1 |
|
|
2.6 |
|
|
0.7 |
|
|
— |
|
|
(4.9 |
) |
|
0.9 |
|
|
(3.6 |
) |
|
7.6 |
|
|
— |
|
GAAP |
$ |
(59.0 |
) |
|
0.9 |
|
|
28.8 |
|
|
(25.5 |
) |
|
(54.8 |
) |
|
$ |
(0.6 |
) |
|
(13.0 |
) |
|
7.7 |
|
|
(3.2 |
) |
|
(9.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
$ |
0.15 |
|
|
0.16 |
|
|
0.12 |
|
|
0.58 |
|
|
1.01 |
|
|
$ |
0.44 |
|
|
0.30 |
|
|
0.40 |
|
|
0.55 |
|
|
1.69 |
|
Other items not allocated to
segments(b) |
(1.23 |
) |
|
(0.21 |
) |
|
0.41 |
|
|
(1.12 |
) |
|
(2.12 |
) |
|
(0.36 |
) |
|
(0.58 |
) |
|
(0.18 |
) |
|
(0.77 |
) |
|
(1.87 |
) |
Income tax rate adjustment(c) |
(0.13 |
) |
|
0.06 |
|
|
0.05 |
|
|
0.01 |
|
|
— |
|
|
(0.10 |
) |
|
0.02 |
|
|
(0.07 |
) |
|
0.15 |
|
|
— |
|
GAAP |
$ |
(1.21 |
) |
|
0.02 |
|
|
0.58 |
|
|
(0.52 |
) |
|
(1.12 |
) |
|
$ |
(0.01 |
) |
|
(0.26 |
) |
|
0.16 |
|
|
(0.07 |
) |
|
(0.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP margin |
2.5 |
% |
|
2.9 |
% |
|
2.5 |
% |
|
6.9 |
% |
|
3.7 |
% |
|
5.4 |
% |
|
4.1 |
% |
|
5.0 |
% |
|
6.6 |
% |
|
5.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add due to rounding.
See page 15 for footnote explanations.
Contact:
Investor Relations
804.289.9709
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