Brink's Announces Third-Quarter Results
Revenue growth of 3% with 26% organic growth in ATM managed services and digital retail solutionsFull-year 2024 guidance update reflects the impact of currency and market headwinds in global servicesAMS and DRS organic growth now expected +20%, above previous expectations
RICHMOND, Va, Nov. 06, 2024 (GLOBE NEWSWIRE) -- The Brink's Company (NYSE:BCO), a leading global provider of cash and valuables management, digital retail solutions (DRS), and ATM managed services (AMS), today announced third-quarter results.
Mark Eubanks, president and CEO, said: "In the third quarter, we delivered strong 26% organic growth in AMS and DRS as we continue to stimulate customer demand for outsourcing with financial institutions and convert whitespace opportunities in retail. These higher-margin, recurring revenue businesses now represent over 23% of total company revenue and are expected to deliver over 20% organic growth in 2024. This growth was partially offset by a strengthening US dollar as well as cyclical market headwinds in our global services business. Profits reflect the flow through of these revenue items and the timing impact of a large security loss during the period. Cash generation has improved through better capital efficiency and working capital management. In the second half of the year, these improvements are being offset by unusual headwinds to free cash flow from foreign currency volatility and cash taxes."
"I remain encouraged about the trajectory of the business and the cadence of our transformation. In order to support a growing base of AMS and DRS revenue, we are investing in technology to accelerate growth, increase operating margins and improve capital efficiency for years to come. I remain confident that we are improving our operations and making the right investments to create long-term shareholder value."
Third-quarter results are summarized in the following table:
(In millions, except for per share amounts)
Third-Quarter 2024 (vs. 2023)
GAAP
Change
Non-GAAP
Change
Constant Currency Change(b)
Revenue
$
1,259
3%
$
1,259
3%
13%
Operating Profit
$
112
(19)%
$
152
(9%)
20%
Operating Profit Margin
8.9
%
(230 bps)
12.0
%
(150 bps)
90 bps
Net Income / Adjusted EBITDA
$
29
(37%)
$
217
(6%)
16%
EPS
$
0.65
(33%)
$
1.51
(27%)
10%
(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 2024 Non-GAAP results at 2023 exchange rates.
Security LossesThird-quarter results included a $10 million increase in security losses year-over-year, primarily from a large loss event. The company uses historical data to plan for losses, however the timing of large loss events is difficult to forecast on a quarterly basis. Given how we manage security loss risk, we do not expect the third-quarter increase to impact our full year outlook.
Updated 2024 Guidance (Unaudited)(In millions, except for percentages and per share amounts)
The 2024 Non-GAAP outlook amounts cannot be reconciled to GAAP without unreasonable effort, as we are unable to accurately forecast certain amounts that are necessary for reconciliation, including the impact of highly inflationary accounting on our Argentina operations in 2024 or other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions and the impact of possible future acquisitions. We are also unable to forecast changes in cash held for customer obligations, proceeds from the sale of property, equipment and investments or proceeds from lessor debt financing. The 2024 Non-GAAP outlook reflects management's current assumptions regarding variables that are difficult to accurately forecast, including those discussed in the Risk Factors set forth in the Company's filings with the United States Securities and Exchange Commission. The 2024 outlook assumes the continuation of current economic trends and does not contemplate a significant economic downturn for the balance of the year. Revenues are presented in accordance with GAAP.
Updated 2024 Non-GAAP Outlook
Revenues
$
5,000 - 5,050
Adjusted EBITDA
$
900 - 920
Adjusted EBITDA margin
~18.1%
Free cash flow before dividends
$
320 - 360
EPS from continuing operations attributable to Brink's
$
6.50 - 6.80
Conference CallBrink's will host a conference call on November 6 at 9:00 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/10193352/fdaa6abf90 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 13, 2024 at 877-344-7529 (in the U.S.) or 412-317-0088 (international). The access code is 9202507. 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)
Condensed Consolidated Balance Sheets
December 31, 2023
September 30, 2024
Assets
Current assets:
Cash and cash equivalents
$
1,176.6
1,226.3
Restricted cash
507.0
412.5
Accounts receivable, net
779.0
849.4
Prepaid expenses and other
325.7
348.3
Total current assets
2,788.3
2,836.5
Right-of-use assets, net
337.7
355.3
Property and equipment, net
1,013.3
984.0
Goodwill
1,473.8
1,485.4
Other intangibles, net
488.3
452.9
Deferred tax assets, net
231.8
241.1
Other
268.6
315.4
Total assets
$
6,601.8
6,670.6
Liabilities and Equity
Current liabilities:
Short-term borrowings
151.7
140.8
Current maturities of long-term debt
117.1
134.1
Accounts payable
249.7
235.3
Accrued liabilities
1,126.9
1,100.8
Restricted cash held for customers
298.7
191.2
Total current liabilities
1,944.1
1,802.2
Long-term debt
3,262.5
3,576.4
Accrued pension costs
148.5
136.1
Retirement benefits other than pensions
159.6
162.3
Lease liabilities
265.8
279.4
Deferred tax liabilities
56.5
59.5
Other
244.6
246.6
Total liabilities
6,081.6
6,262.5
Equity:
The Brink's Company ("Brink's") shareholders:
Common stock, par value $1 per share:
Shares authorized: 100.0
Shares issued and outstanding: 2024 - 43.7; 2023 - 44.5
44.5
43.7
Capital in excess of par value
675.9
665.0
Retained earnings
333.0
322.1
Accumulated other comprehensive income (loss)
(656.0
)
(753.7
)
Brink's shareholders
397.4
277.1
Noncontrolling interests
122.8
131.0
Total equity
520.2
408.1
Total liabilities and equity
$
6,601.8
6,670.6
The Brink's Company and subsidiaries (In millions) (Unaudited)
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30,
2023
2024
Cash flows from operating activities:
Net income
$
102.8
133.9
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Income) loss from discontinued operations, net of tax
(0.5
)
0.1
Depreciation and amortization
206.3
220.3
Share-based compensation expense
25.6
24.1
Deferred income taxes
3.7
(7.2
)
(Gain) loss on marketable securities, sale of property and equipment and derivatives
2.2
(0.5
)
Impairment losses
8.2
3.3
Retirement benefit funding more than expense:
Pension
(6.9
)
(4.9
)
Other than pension
(6.0
)
(6.5
)
Unrealized foreign currency (gains) losses
23.9
(36.4
)
Other operating
17.1
11.1
Changes in operating assets and liabilities, net of effects of acquisitions:
(Increase) decrease in accounts receivable and income taxes receivable
30.8
(91.2
)
(Increase) decrease in accounts payable, income taxes payable and accrued liabilities
(61.0
)
35.9
Decrease in restricted cash held for customers
(44.9
)
(100.6
)
Decrease in customer obligations
(5.5
)
(69.7
)
(Increase) decrease in prepaid and other current assets
5.1
(23.7
)
Decrease in other noncurrent assets and liabilities
(7.9
)
(31.8
)
Net cash provided by operating activities
293.0
56.2
Cash flows from investing activities:
Capital expenditures
(133.1
)
(159.9
)
Acquisitions, net of cash acquired
—
(14.4
)
Dispositions, net of cash disposed
1.1
—
Marketable securities:
Purchases
(58.3
)
(59.3
)
Sales
48.7
42.8
Cash proceeds from sale of property and equipment
5.7
12.0
Net change in loans held for investment
(12.3
)
5.4
Other
(0.6
)
(8.0
)
Discontinued operations
0.9
—
Net cash used in investing activities
(147.9
)
(181.4
)
Cash flows from financing activities:
Borrowings (repayments) of debt:
Short-term borrowings
76.6
(6.7
)
Long-term revolving credit facilities:
Borrowings
6,640.5
9,169.7
Repayments
(6,713.1
)
(9,202.6
)
Other long-term debt:
Borrowings
16.4
819.8
Repayments
(71.1
)
(489.5
)
Acquisition of noncontrolling interest
(0.6
)
(0.2
)
Cash paid for acquisition related settlements and obligations
(10.5
)
(0.8
)
Debt financing costs
—
(10.5
)
Repurchase shares of Brink's common stock
(105.7
)
(125.3
)
Dividends to:
Shareholders of Brink's
(29.7
)
(31.3
)
Noncontrolling interests in subsidiaries
(6.5
)
(5.2
)
Tax withholdings associated with share-based compensation
(7.6
)
(17.9
)
Other
3.9
—
Net cash provided by (used in) financing activities
(207.4
)
99.5
Effect of exchange rate changes on cash
(27.7
)
(19.1
)
Cash, cash equivalents and restricted cash:
Decrease
(90.0
)
(44.8
)
Balance at beginning of period
1,410.5
1,683.6
Balance at end of period
$
1,320.5
1,638.8
Supplemental Cash Flow Information
Nine Months Ended September 30,
2023
2024
Cash paid for income taxes, net
$
(74.5
)
(96.3
)
The Brink's Company and subsidiaries(In millions, except for per share amounts) (Unaudited)
Third-Quarter 2024 vs. 2023
Impact of
% Change
GAAP
Organic
Acquisitions /
Currency
Organic
3Q'23
Change(a)
Dispositions(b)
Effect(c)
3Q'24
Total
Growth(a)
Revenues:
North America
$
398
10
5
(1
)
413
4
3
Latin America
340
117
—
(136
)
321
(5
)
34
Europe
288
23
2
3
316
10
8
Rest of World
202
5
—
2
209
4
3
Segment revenues
$
1,227
156
7
(131
)
1,259
3
13
Revenues
$
1,227
156
7
(131
)
1,259
3
13
Operating profit:
North America
$
48
(6
)
—
—
42
(13
)
(13
)
Latin America
68
48
—
(46
)
70
3
70
Europe
36
4
—
—
40
12
11
Rest of World
43
1
—
—
44
3
2
Segment operating profit
194
46
1
(45
)
196
1
24
Corporate expenses(d)
(28
)
(13
)
—
(3
)
(44
)
59
48
Other items not allocated to segments(d)
(29
)
(12
)
3
(3
)
(40
)
40
42
Operating profit
$
138
21
4
(51
)
112
(19
)
15
Amounts may not add due to rounding.
(a) Organic change and organic growth are supplemental financial measures that are not required by, or presented in accordance with, GAAP, and are described in more detail on page 12.(b) Amounts include the impact of prior year comparable period results for acquired and disposed businesses. This measure is not required by, or presented in accordance with, GAAP and is described in more detail on page 12.(c) The amounts in the "Currency" column consist of the effects of Argentina devaluations under highly inflationary accounting and the sum of monthly currency changes. This measure is not required by, or presented in accordance with, GAAP and is described in more detail on page 12.(d) See pages 9-11 for further information, where these items are discussed in more detail.
The Brink's Company and subsidiaries(In millions, except for per share amounts) (Unaudited)
Nine Months Ended September 30, 2024 vs. 2023
Impact of
% Change
GAAP
Organic
Acquisitions /
Currency
Organic
2023
Change(a)
Dispositions(b)
Effect(c)
2024
Total
Growth(a)
Revenues:
North America
$
1,197
24
9
(1
)
1,230
3
2
Latin America
989
361
—
(363
)
987
—
36
Europe
842
66
6
3
917
9
8
Rest of World
600
17
—
(4
)
614
2
3
Segment revenues
$
3,629
468
15
(365
)
3,748
3
13
Revenues
$
3,629
468
15
(365
)
3,748
3
13
Operating profit:
North America
$
124
17
