Brink's Reports Third-Quarter Results

The Brink’s Company

Adjusted EBITDA and EPS Guidance Affirmed, Outlook Updated to Reflect FX Translation
Global Restructuring Expected to Yield $40 Million in Profit Growth in 2023
Balanced Capital Allocation Strategy Includes NoteMachine Acquisition and Continued Share Repurchases

3Q Highlights:

• Revenue up 6%, reflecting 13% organic growth

• Operating profit: GAAP down (20)% to $60M; non-GAAP up 9% to $127M

• Operating margin: GAAP 5.2%; non-GAAP 11.2%

• GAAP net income up 1% to $19M; adjusted EBITDA up 11% to $189M

• EPS: GAAP up 8% to $0.41; non-GAAP up 18% to $1.34
  

RICHMOND, Va., Oct. 26, 2022 (GLOBE NEWSWIRE) -- The Brink’s Company (NYSE:BCO), the global leader in total cash management, route-based secure logistics and payment solutions, today announced third-quarter results.

Mark Eubanks, president and CEO, said: “Our third-quarter and year-to-date non-GAAP results include double-digit organic growth in revenue, operating profit, adjusted EBITDA and EPS-- demonstrating the resiliency of our business. To drive continued profit growth and mitigate the potential impact of a sustained economic slowdown, we will remain sharply focused on the optimization of our operating model. To that end, we are proactively executing a restructuring plan that is expected to yield approximately $40 million in sustainable fixed cost reductions in 2023.

“We remain on track to achieve the mid-point of our guidance for adjusted EBITDA and EPS, with revenue and operating profit now expected to be at the low end of the range due primarily to the impact of foreign exchange translation. Our recent share repurchases, which continued into October, demonstrate our confidence that we will continue to deliver strong growth in revenue, profit and cash flow. We look forward to sharing our 2023 guidance when we release fourth-quarter results in February.” (See page 2 for a summary of 2022 guidance.)

Third-quarter results are summarized in the following table:

(In millions, except for per share amounts)	Third-Quarter 2022 (vs. 2021)
	GAAP				Change			Non-GAAP				Change			Constant Currency Change(b)
Revenue	$	1,137			6%			$	1,137			6%			14%
Operating Profit	$	60			(20%)			$	127			9%			23%
Operating Margin		5.2	%		(170 bps)				11.2	%		40 bps			90 bps
Net Income / Adjusted EBITDA(a)	$	19			1%			$	189			11%			22%
EPS	$	0.41			8%			$	1.34			18%			37%

^{(a)   The non-GAAP financial metric, adjusted EBITDA, is presented with its corresponding GAAP metric, net income attributable to Brink's.
(b)   Constant currency represents 2022 Non-GAAP results at 2021 exchange rates.}

2022 Guidance^(d) (Unaudited)
(In millions, except for percentages, per share amounts and revenues)

		2022 GAAP Outlook(b)		Reconciling Items(a)		2022 Non-GAAP Outlook(a)		Non-GAAP % Change vs. 2021
Revenues	$	~4.52B		—		~4.52B		~8%
Operating profit		~379		~166		~545		~16%
EPS from continuing operations attributable to Brink's	$	~3.83		~1.92		~5.75		~21%
Operating profit margin		~8.4%		~3.7%		~12.1%		~90 bps
Free cash flow before dividends(c)						~255		~4%
Adjusted EBITDA						~775		~14%
Adjusted EBITDA margin						~17.1%		~80 bps

^{Amounts may not add due to rounding.}

^{(a)   The 2022 Non-GAAP outlook amounts exclude certain forecasted Non-GAAP adjusting items, such as intangible asset amortization and U.S. retirement plan costs. We have not forecasted the impact of highly inflationary accounting on our Argentina operations in 2022 or other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions. We have also not forecasted changes in cash held for customer obligations or proceeds from the sale of property, equipment and investments in 2022. The 2022 Non-GAAP outlook amounts for operating profit, EPS from continuing operations, free cash flow before dividends and Adjusted EBITDA cannot be reconciled to GAAP without unreasonable effort. We cannot reconcile these amounts to GAAP because we are unable to accurately forecast the impact of highly inflationary accounting on our Argentina operations in 2022 or other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions. We are also unable to forecast changes in cash held for customer obligations or proceeds from the sale of property, equipment and investments in 2022.
(b)   The 2022 GAAP outlook excludes any forecasted impact from highly inflationary accounting on our Argentina operations as well as other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions.
(c)   Excludes our initial investment in France to support the take-over of the BPCE ATM network.
(d)   Excludes the impact of the Note Machine acquisition which is expected to be accretive in the fourth-quarter of 2022.}

NoteMachine Acquisition
On October 3, Brink’s announced its acquisition of NoteMachine, one of the leading ATM networks in the United Kingdom, for approximately $179 million or 5.0 times adjusted EBITDA. For the fiscal year ended June 30, 2022, NoteMachine generated revenue of approximately $131 million and adjusted EBITDA of approximately $36 million at exchange rates as of September 30, 2022. The acquisition is expected to be accretive to earnings in the fourth quarter of 2022 by approximately $0.04 per share.

Share Repurchases
In the third quarter of 2022 and through October 24, 2022, Brink’s repurchased a total of 825,725 shares of its common stock for an aggregate of $45 million and an average price per share of $54.60 under its previously authorized $250 million share repurchase program. The company has approximately $205 million remaining under its current authorization.

Conference Call
Brink’s will host a conference call on October 26 at 8:30 a.m. ET to review third-quarter results.  Interested parties can listen by calling 888-349-0094 (in the U.S.) or 412-902-0124 (international). Participants can preregister at https://dpregister.com/sreg/10171548/f4954bc5d0 to receive a direct dial-in number for the call. The call also will be accessible live via webcast on the Brink’s website (www.brinks.com). A replay of the call will be available through November 02, 2022 at 877-344-7529 (in the U.S.) or 412-317-0088 (international). The conference number is 4404011. An archived version of the webcast will be available online in the Investor Relations section of http://investors.brinks.com.

The Brink’s Company and subsidiaries
(In millions, except for per share amounts) (Unaudited)

Third-Quarter 2022 vs. 2021

GAAP					Organic			Acquisitions /									% Change
	3Q'21				Change			Dispositions(a)			Currency(b)			3Q'22			Total			Organic
Revenues:
North America	$	361			38			3			(1	)		401			11			11
Latin America		289			41			1			(29	)		301			4			14
Europe		238			18			—			(37	)		220			(8	)		8
Rest of World		188			45			—			(18	)		215			15			24
Segment revenues(c)	$	1,076			143			4			(85	)		1,137			6			13
Revenues - GAAP	$	1,076			143			4			(85	)		1,137			6			13
Operating profit:
North America	$	25			13			1			—			38			53			51
Latin America		65			12			—			(10	)		67			3			18
Europe		28			2			—			(4	)		26			(8	)		7
Rest of World		32			20			—			(4	)		48			51			64
Segment operating profit		150			47			1			(18	)		179			20			31
Corporate(d)		(34	)		(21	)		—			3			(52	)		55			62
Operating profit - non-GAAP	$	116			26			1			(16	)		127			9			22
Other items not allocated to segments(e)		(42	)		1			(20	)		(7	)		(67	)		61			(3	)
Operating profit - GAAP	$	74			27			(19	)		(23	)		60			(20	)		37
GAAP interest expense		(28	)											(35	)		26
GAAP interest and other income (expense)		(1	)											6			fav
GAAP provision for income taxes		23												9			(63	)
GAAP noncontrolling interests		4												3			(15	)
GAAP income from continuing operations(f)		19												19			1
GAAP EPS(f)	$	0.38												0.41			8
GAAP weighted-average diluted shares		50.3												47.5			(6	)

Non-GAAP(g)					Organic			Acquisitions /									% Change
	3Q'21				Change			Dispositions(a)			Currency(b)			3Q'22			Total			Organic
Segment revenues - GAAP/non-GAAP	$	1,076			143			4			(85	)		1,137			6			13
Non-GAAP operating profit		116			26			1			(16	)		127			9			22
Non-GAAP interest expense		(27	)											(34	)		26
Non-GAAP interest and other income (expense)		3												7			fav
Non-GAAP provision for income taxes		31												32			3
Non-GAAP noncontrolling interests		4												3			(13	)
Non-GAAP income from continuing operations(f)		57												64			12
Non-GAAP EPS(f)	$	1.14												1.34			18
Non-GAAP weighted-average diluted shares		50.3												47.5			(6	)

^{Amounts may not add due to rounding.}

^{(a)   Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition related gains/losses.
(b)   The amounts in the “Currency” column consist of the effects of Argentina devaluations under highly inflationary accounting and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results from changes in foreign currency rates from the prior year period.
(c)   Segment revenues equal our total reported non-GAAP revenues.
(d)   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 of public companies.
(e)   See pages 7-8 for more information.
(f)   Attributable to Brink's.
(g)   Non-GAAP results are reconciled to applicable GAAP results on pages 9-12.
(h)   As disclosed in the first quarter of 2021, an accrual adjustment was made that resulted in a positive $12.3 million for the North America segment with a corresponding offset to Corporate expense, resulting in no impact to consolidated operating profit for the quarter.}

The Brink’s Company and subsidiaries
(In millions, except for per share amounts) (Unaudited)

Nine Months Ended September 30, 2022 vs. 2021

GAAP					Organic			Acquisitions /									% Change
		2021			Change			Dispositions(a)			Currency(b)			2022			Total			Organic
Revenues:
North America	$	1,035			100			38			(2	)		1,171			13			10
Latin America		832			117			3			(53	)		899			8			14
Europe		683			66			3			(83	)		669			(2	)		10
Rest of World		552			82			6			(34	)		606			10			15
Segment revenues(c)	$	3,102			365			50			(172	)		3,345			8			12
Revenues - GAAP	$	3,102			365			50			(172	)		3,345			8			12
Operating profit:
North America(h)	$	98			(9	)		7			—			97			(2	)		(9	)
Latin America		180			33			—			(19	)		194			8			18
Europe		57			14			—			(8	)		63			10			24
Rest of World		94			33			1			(7	)		121			28			35
Segment operating profit		430			70			8			(34	)		475			10			16
Corporate(d)(h)		(114	)		(7	)		—			8			(112	)		(2	)		6
Operating profit - non-GAAP	$	317			64			8			(26	)		363			15			20
Other items not allocated to segments(e)		(107	)		(11	)		(11	)		(15	)		(145	)		35			10
Operating profit - GAAP	$	209			53			(3	)		(41	)		218			4			25
GAAP interest expense		(83	)											(95	)		14
GAAP interest and other income (expense)		(2	)											8			fav
GAAP provision (benefit) for income taxes		59												(3	)		fav
GAAP noncontrolling interests		10												9			(4	)
GAAP income from continuing operations(f)		56												126			fav
GAAP EPS(f)	$	1.11												2.63			fav
GAAP weighted-average diluted shares		50.4												47.9			(5	)

Non-GAAP(g)					Organic			Acquisitions /									% Change
		2021			Change			Dispositions(a)			Currency(b)			2022			Total			Organic
Segment revenues - GAAP/non-GAAP	$	3,102			365			50			(172	)		3,345			8			12
Non-GAAP operating profit		317			64			8			(26	)		363			15			20
Non-GAAP interest expense		(82	)											(94	)		15
Non-GAAP interest and other income (expense)		14												13			(13	)
Non-GAAP provision for income taxes		84												90			8
Non-GAAP noncontrolling interests		10												9			(8	)
Non-GAAP income from continuing operations(f)		155												182			17
Non-GAAP EPS(f)	$	3.08												3.80			23
Non-GAAP weighted-average diluted shares		50.4												47.9			(5	)

^{Amounts may not add due to rounding.}

^{See page 3 for footnote explanations.}

The Brink’s Company and subsidiaries
(In millions) (Unaudited)

Selected Items - Condensed Consolidated Balance Sheets

	December 31, 2021			September 30, 2022
Assets
Cash and cash equivalents	$	710.3		1,019.0
Restricted cash		376.4		329.9
Accounts receivable, net		701.8		787.7
Right-of-use assets, net		299.1		293.4
Property and equipment, net		865.6		844.8
Goodwill and intangibles		1,902.9		1,789.5
Deferred tax assets, net		239.4		276.5
Other		471.2		592.6
Total assets	$	5,566.7		5,933.4
Liabilities and Equity
Accounts payable		211.2		193.5
Debt		2,966.7		3,371.7
Retirement benefits		541.5		503.3
Accrued liabilities		877.3		888.3
Lease liabilities		241.8		240.1
Other		475.6		417.3
Total liabilities		5,314.1		5,614.2
Equity		252.6		319.2
Total liabilities and equity	$	5,566.7		5,933.4

Selected Items - Condensed Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
		2021			2022
Net cash provided by operating activities	$	273.6			200.5
Net cash used by investing activities		(390.3	)		(112.1	)
Net cash provided by financing activities		234.6			291.9
Effect of exchange rate changes on cash		(38.3	)		(118.1	)
Cash, cash equivalents and restricted cash:
Increase		79.6			262.2
Balance at beginning of period		942.9			1,086.7
Balance at end of period	$	1,022.5			1,348.9
Supplemental Cash Flow Information
Capital expenditures	$	(113.7	)		(131.5	)
Acquisitions, net of cash acquired		(313.6	)		(14.2	)
Depreciation and amortization		178.1			179.9
Cash paid for income taxes, net		(55.9	)		(101.6	)

About The Brink’s Company
The Brink’s Company (NYSE:BCO) is the global leader in total cash management, route-based secure logistics and payment solutions including cash-in-transit, ATM services, cash management services (including vault outsourcing, money processing and intelligent safe services), and international transportation of valuables. Our customers include financial institutions, retailers, government agencies, mints, jewelers and other commercial operations. Our global network of operations in 53 countries serves customers in more than 100 countries. For more information, please visit our 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: 2022 outlook, including revenue, operating profit, adjusted EBITDA, earnings per share, and free cash flow (and drivers thereof), the impact of the NoteMachine acquisition on Brink’s results, acquisition-related synergies, expected share repurchase activity, the impact of the global restructuring plan, strategic targets and initiatives, expected economic recovery, and the impact of macroeconomic factors. 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.

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 and execute further cost and operational improvement and efficiencies in our core businesses; our ability to improve service levels and quality in our core businesses; market volatility and commodity price fluctuations; general economic issues, including supply chain disruptions, fuel price increases, changes in interest rates, and interest rate increases; seasonality, pricing and other competitive industry factors; investment in information technology (“IT”) and its impact on revenue and profit growth; our ability to maintain an effective IT infrastructure and safeguard confidential information, including from a cybersecurity incident; our ability to effectively develop and implement solutions for our customers; risks associated with operating in foreign countries, including changing political, labor and economic conditions (including political conflict or unrest), regulatory issues (including the imposition of international sanctions, including by the U.S. government), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company’s financial results as a result of jurisdictions determined to be highly inflationary, and restrictive government actions, including nationalization; labor issues, including labor shortages negotiations with organized labor and work stoppages; pandemics (including the ongoing Covid-19 pandemic and related impact to and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce;   anticipated cash needs in light of our current liquidity position and the impact of Covid-19 on our liquidity; the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates; our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies; costs related to dispositions and product or market exits; our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers; safety and security performance and loss experience; employee and environmental liabilities in connection with former coal operations, including black lung claims; the impact of the American Rescue Plan Act and Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations; funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits; changes to estimated liabilities and assets in actuarial assumptions; the nature of hedging relationships and counterparty risk; access to the capital and credit markets; our ability to realize deferred tax assets; the outcome of pending and future claims, litigation, and administrative proceedings; public perception of our business, reputation and brand; changes in estimates and assumptions underlying critical accounting policies; the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and 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, 2021, and in related disclosures 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 subsidiaries
Segment Results: 2021 and 2022 (Unaudited)
(In millions, except for percentages)

	Revenues
		2021																2022
	1Q				2Q			3Q			4Q			Full Year			1Q				2Q			3Q			Nine Months
Revenues:
North America	$	317.1			356.8			360.7			372.5			1,407.1			$	368.8			401.6			400.6			1,171.0
Latin America		269.7			272.8			289.3			294.2			1,126.0				291.3			306.3			301.1			898.7
Europe		214.4			230.8			238.0			234.1			917.3				222.1			226.7			220.0			668.8
Rest of World		176.5			188.4			187.5			197.4			749.8				191.8			199.3			215.0			606.1
Segment revenues - GAAP and Non-GAAP	$	977.7			1,048.8			1,075.5			1,098.2			4,200.2			$	1,074.0			1,133.9			1,136.7			3,344.6
	Operating Profit
		2021																2022
	1Q				2Q			3Q			4Q			Full Year			1Q				2Q			3Q			Nine Months
Operating profit:
North America(a)	$	32.3			41.1			25.0			50.0			148.4			$	24.4			34.1			38.2			96.7
Latin America		58.7			57.1			64.6			76.9			257.3				63.0			64.7			66.5			194.2
Europe		10.6			18.7			28.1			32.4			89.8				14.8			22.4			25.9			63.1
Rest of World		30.4			31.9			31.9			37.3			131.5				33.1			39.5			48.3			120.9
Corporate(a)		(41.9	)		(38.2	)		(33.7	)		(42.7	)		(156.5	)			(23.2	)		(36.7	)		(52.1	)		(112.0	)
Non-GAAP		90.1			110.6			115.9			153.9			470.5				112.1			124.0			126.8			362.9
Other items not allocated to segments(b)
Reorganization and Restructuring		(6.6	)		(15.1	)		(14.0	)		(7.9	)		(43.6	)			(11.7	)		(2.7	)		(19.6	)		(34.0	)
Acquisitions and dispositions		(18.7	)		(20.5	)		(16.6	)		(16.1	)		(71.9	)			(15.2	)		(15.4	)		(35.7	)		(66.3	)
Argentina highly inflationary impact		(3.9	)		(2.6	)		(2.3	)		(3.1	)		(11.9	)			(6.1	)		(9.0	)		(12.0	)		(27.1	)
Change in allowance estimate		—			—			—			—			—				(16.7	)		0.4			0.3			(16.0	)
Chile antitrust matter		—			—			(9.5	)		—			(9.5	)			—			(0.8	)		(0.3	)		(1.1	)
Internal loss		0.8			0.9			0.7			18.7			21.1				—			—			—			—
GAAP	$	61.7			73.3			74.2			145.5			354.7			$	62.4			96.5			59.5			218.4
	Margin
		2021																2022
	1Q				2Q			3Q			4Q			Full Year			1Q				2Q			3Q			Nine Months
Margin:
North America		10.2	%		11.5			6.9			13.4			10.5				6.6	%		8.5			9.5			8.3
Latin America		21.8			20.9			22.3			26.1			22.9				21.6			21.1			22.1			21.6
Europe		4.9			8.1			11.8			13.8			9.8				6.7			9.9			11.8			9.4
Rest of World		17.2			16.9			17.0			18.9			17.5				17.3			19.8			22.5			19.9
Non-GAAP		9.2			10.5			10.8			14.0			11.2				10.4			10.9			11.2			10.9
Other items not allocated to segments(b)		(2.9	)		(3.5	)		(3.9	)		(0.8	)		(2.8	)			(4.6	)		(2.4	)		(6.0	)		(4.4	)
GAAP		6.3	%		7.0			6.9			13.2			8.4				5.8	%		8.5			5.2			6.5