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. 

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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

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Non-Segment Expenses
On a GAAP basis, non-segment expenses remained flat versus the year-ago quarter at $21 million as higher retirement plan expenses ($5 million) were offset primarily by the inclusion in last year's results of the former CEO's retirement costs ($4 million).  On a non-GAAP basis, non-segment expenses were flat.

Capital Expenditures and Capital Leases
Full-year capital expenditures and capital lease additions were $203 million versus $235 million in 2011, reflecting reductions of $17 million in North America and $15 million in International.

Income Taxes
On a GAAP basis, fourth-quarter tax expense was $5 million (10% effective rate) versus $20 million in 2011 (38% effective rate). The full-year 2012 tax expense was $27 million (17% effective rate) versus $64 million in 2011 (35% effective rate). 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 the mix of earnings. The full-year 2011 effective rate was favorably affected by an $8 million valuation allowance release in the U.S., partially offset by tax expense resulting from repatriation and the mix of earnings.  On a non-GAAP basis, the full-year rate for 2012 was 37% versus 35% in 2011.

2013 Outlook
See page 9 for a summary of selected 2012 results and 2013 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.

Recent Events
On December 31, Mel Parker joined Brink's as president of Brink's North America.  Parker most recently served as vice president and general manager of Dell's North American consumer, small business and member loyalty division.  Prior to his tenure at Dell, Parker served in a variety of leadership positions at Newell Rubbermaid, Staples and Pepsico.  

On January 7, Patty Watson joined Brink's as chief information officer.  Before joining Brink's, Watson served as the senior technology executive for the treasury, credit and payments division of Bank of America.  Prior to her tenure at Bank of America, Watson was an officer in the United States Air Force, where she last served as director of operations.  

On January 28, Brink's announced that Darren McCue will join the company as the chief commercial strategy officer on February 19.  McCue will join Brink's from Aetna, where he served as executive vice president of strategy and business development for consumer financial solutions.  Before Aetna, McCue held leadership roles at Payflex and FlexAmerica and spent eight years with Booz Allen Hamilton and Manugistics in their management and supply chain optimization consulting practices.

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On January 8, Brink's announced that it has entered into an agreement with NetSpend Holdings, Inc. (NASDAQ: NTSP), to sell its Brink's Money prepaid payroll card to U.S. employers.  The initial rollout of Brink's Money is scheduled for the first quarter of 2013.

On January 10, Brink's acquired the remaining 26% ownership interest in our cash logistics business in Chile for $18 million and now owns 100% of the business.

On January 31, Brink's acquired Brazil-based Rede Transacoes Eletronicas Ltda. (Redetrel).  Redetrel distributes electronic prepaid products, including mobile phone airtime, via a network of approximately 20,000 retail locations across Brazil.  Redetrel's strong distribution network supplements Brink's existing payments business, ePago, which has operations in Brazil, Mexico, Colombia and Panama.

On January 17, Brink's declared a quarterly dividend of 10 cents per share on its common stock.  The dividend is payable on March 1, 2013, to shareholders of record on February 1, 2013.

Conference Call
Brink's will host a conference call on February 1  at 11:00 a.m. Eastern Time to review fourth-quarter results.  Interested parties can listen by calling (800) 860-2442 (domestic), (412) 858-4600 (international) and (866) 605-3852 in Canada, or via live webcast at www.Brinks.com.  Please call in at least five minutes prior to the start of the call.  A replay will be available through February 15, 2013, by calling (877) 344-7529 (domestic) or + (412) 317-0088 (international).  The conference account number is 10023432.  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 operation and provides an alternative for valuing our 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 2012 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 profit, segment margin, non-segment expense, interest expense, tax rate, non-controlling interest expense, capital expenditures, productivity investments and improvement, capital leases and depreciation and amortization for 2013, as well as long-term profit growth and margin rate results and the execution of the Company's strategy, including planned divestitures.  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 implement high-value solutions,
• 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, and changes in 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,
• 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,
• the actions of competitors, our ability to identify acquisitions and other strategic opportunities in emerging markets,
• the willingness of our customers to absorb fuel surcharges and other future price increases,
• the impact of turnaround actions responding to current conditions in Europe and our productivity and cost control efforts in that region,
• 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, 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,
• the outcome of pending and future claims and litigation,
• access to the capital and credit markets,
• seasonality, pricing and other competitive industry factors. 

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, 2011, 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.

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