THE BRINK’S COMPANY |
Virginia | 001-09148 | 54-1317776 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $1.00 per share | BCO | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits | ||
(d) | Exhibits | ||
99.1 | Press Release, dated July 24, 2019, issued by The Brink's Company | ||
99.2 | Slide presentation of The Brink's Company |
THE BRINK’S COMPANY (Registrant) | ||
Date: July 24, 2019 | By: | /s/ Ronald J. Domanico |
Ronald J. Domanico | ||
Executive Vice President and Chief Financial Officer |
![]() | Exhibit 99.1 |
Contact: Investor Relations | ![]() |
804.289.9709 | FOR IMMEDIATE RELEASE |
(In millions, except for per share amounts) | Second-Quarter 2019 | ||||||||||||
GAAP | Change | Non-GAAP | Change | Constant Currency Change(b) | |||||||||
Revenue | $ | 914 | 8% | $ | 914 | 11% | 20% | ||||||
Operating Profit | $ | 53 | (15%) | $ | 89 | 17% | 41% | ||||||
Operating Margin | 5.8 | % | (150 bps) | 9.7 | % | 50 bps | 170 bps | ||||||
Net Income / Adjusted EBITDA(a) | $ | 13 | fav | $ | 134 | 13% | 30% | ||||||
EPS | $ | 0.25 | fav | $ | 0.84 | 8% | 40% |
(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 2019 results at 2018 exchange rates. |
• | Segment revenue: Reported growth of 11% includes 8% organic growth plus 12% acquisition-related growth, partly offset by 9% negative currency translation (up 20% in constant currency) |
• | Total operating profit: |
• | GAAP: Profits down 15%, includes 9% organic growth, offset by a negative 9% acquisition-related impact and negative 14% currency translation |
• | Non-GAAP: Profits up 17%, includes 28% organic growth plus 14% acquisition-related growth, partly offset by 25% negative currency translation (up 41% in constant currency) |
• | Total U.S. revenue up 54%, operating profit more than doubled, margin up 260 bps to 7.7% |
2018 GAAP | 2018 Non-GAAP(a) | 2019 GAAP Outlook(b) | Reconciling Items(a) | 2019 Non-GAAP Outlook(a) | |||||||||||
Revenues | $ | 3,489 | 3,438 | 3,750 | — | 3,750 | |||||||||
Operating profit | 275 | 347 | 313 – 333 | 92 | 405 – 425 | ||||||||||
Nonoperating expense | (232 | ) | (64 | ) | (113) – (118) | 29 | (84) – (89) | ||||||||
Provision for income taxes | (70 | ) | (97 | ) | (89) – (94) | (17 | ) | (106) – (111) | |||||||
Noncontrolling interests | (6 | ) | (7 | ) | (6 | ) | — | (6 | ) | ||||||
Income from continuing operations attributable to Brink's | (33 | ) | 179 | 105 – 115 | 104 | 209 – 219 | |||||||||
EPS from continuing operations attributable to Brink's | $ | (0.65 | ) | 3.46 | 2.05 – 2.25 | 2.05 | 4.10 – 4.30 | ||||||||
Operating profit margin | 7.9 | % | 10.1 | % | 8.3% – 8.9% | ~ 2.5% | 10.8% – 11.3% | ||||||||
Effective income tax rate | 164.7 | % | 34.2 | % | 44.0 | % | (11.0 | )% | 33.0 | % | |||||
Adjusted EBITDA | 512 | 590 – 610 |
Changes from 2018 | Revenue Change | Operating Profit Change | EPS Change | |||||||||||||||||
2019 GAAP Outlook(b) | % Change vs. 2018 | 2019 Non-GAAP Outlook(a) | % Change vs. 2018 | 2019 GAAP Outlook(b) | 2019 Non-GAAP Outlook(a) | 2019 Non-GAAP Outlook(a) | ||||||||||||||
Organic | 190 | 5 | 241 | 7 | 86 – 106 | 83 – 103 | 0.97 – 1.17 | |||||||||||||
Acquisitions / Dispositions(c) | 286 | 8 | 286 | 8 | 4 | 35 | 0.46 | |||||||||||||
Currency | (215 | ) | (6 | ) | (215 | ) | (6 | ) | (52 | ) | (60 | ) | (0.79 | ) | ||||||
Total | 261 | 7 | 312 | 9 | 38 – 58 | 58 – 78 | 0.64 – 0.84 |
(a) | The 2018 Non-GAAP amounts are reconciled to the corresponding GAAP items on pages 10-13. The 2019 Non-GAAP outlook amounts exclude the year-to-date June 2019 Non-GAAP adjusting items applicable to each category. In addition, we have excluded certain other forecasted Non-GAAP adjusting items for the remainder of 2019, 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 for the remainder of 2019 or other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions. The 2019 Non-GAAP outlook amounts for operating profit, nonoperating expense, provision for income taxes, income from continuing operations, EPS from continuing operations, effective income tax rate 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 for the remainder of 2019 or other potential Non-GAAP adjusting items for which the timing and amounts are currently under review, such as future restructuring actions. |
(b) | The 2019 GAAP outlook excludes any forecasted impact from highly inflationary accounting on our Argentina operations for the remainder of 2019 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) | 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. |
GAAP | Organic | Acquisitions / | % Change | ||||||||||||||||||
2Q'18 | Change | Dispositions(a) | Currency(b) | 2Q'19 | Total | Organic | |||||||||||||||
Revenues: | |||||||||||||||||||||
North America | $ | 324 | 20 | 99 | — | 443 | 37 | 6 | |||||||||||||
South America | 233 | 38 | 17 | (62 | ) | 225 | (3 | ) | 16 | ||||||||||||
Rest of World | 267 | 6 | (15 | ) | (12 | ) | 247 | (8 | ) | 2 | |||||||||||
Segment revenues(g) | $ | 824 | 64 | 101 | (74 | ) | 914 | 11 | 8 | ||||||||||||
Other items not allocated to segments(d) | 26 | (26 | ) | — | — | — | unfav | unfav | |||||||||||||
Revenues - GAAP | $ | 850 | 38 | 100 | (74 | ) | 914 | 8 | 4 | ||||||||||||
Operating profit: | |||||||||||||||||||||
North America | $ | 26 | 13 | 7 | — | 46 | 78 | 50 | |||||||||||||
South America | 46 | 15 | 4 | (20 | ) | 45 | (2 | ) | 33 | ||||||||||||
Rest of World | 26 | 1 | — | (1 | ) | 26 | — | 4 | |||||||||||||
Segment operating profit | 98 | 29 | 10 | (20 | ) | 118 | 20 | 29 | |||||||||||||
Corporate(c) | (22 | ) | (8 | ) | — | 1 | (29 | ) | 30 | 36 | |||||||||||
Operating profit - non-GAAP | $ | 76 | 21 | 10 | (19 | ) | 89 | 17 | 28 | ||||||||||||
Other items not allocated to segments(d) | (15 | ) | (16 | ) | (16 | ) | 10 | (36 | ) | unfav | unfav | ||||||||||
Operating profit - GAAP | $ | 62 | 5 | (6 | ) | (9 | ) | 53 | (15 | ) | 9 | ||||||||||
GAAP interest expense | (16 | ) | (23 | ) | 44 | ||||||||||||||||
GAAP loss on deconsolidation of Venezuela operations | (127 | ) | — | (100 | ) | ||||||||||||||||
GAAP interest and other income (expense) | (8 | ) | (3 | ) | (62 | ) | |||||||||||||||
GAAP provision for income taxes | 19 | 13 | (32 | ) | |||||||||||||||||
GAAP noncontrolling interests | — | 2 | unfav | ||||||||||||||||||
GAAP income (loss) from continuing operations(f) | (108 | ) | 13 | fav | |||||||||||||||||
GAAP EPS(f) | $ | (2.11 | ) | 0.25 | fav | ||||||||||||||||
GAAP weighted-average diluted shares | 51.2 | 50.9 | (1 | ) | |||||||||||||||||
Non-GAAP(e) | Organic | Acquisitions / | % Change | ||||||||||||||||||
2Q'18 | Change | Dispositions(a) | Currency(b) | 2Q'19 | Total | Organic | |||||||||||||||
Segment revenues - GAAP/non-GAAP | $ | 824 | 64 | 101 | (74 | ) | 914 | 11 | 8 | ||||||||||||
Non-GAAP operating profit | 76 | 21 | 10 | (19 | ) | 89 | 17 | 28 | |||||||||||||
Non-GAAP interest expense | (16 | ) | (21 | ) | 37 | ||||||||||||||||
Non-GAAP loss on deconsolidation of Venezuela operations | — | — | — | ||||||||||||||||||
Non-GAAP interest and other income (expense) | 3 | (1 | ) | unfav | |||||||||||||||||
Non-GAAP provision for income taxes | 22 | 22 | — | ||||||||||||||||||
Non-GAAP noncontrolling interests | 2 | 2 | (12 | ) | |||||||||||||||||
Non-GAAP income from continuing operations(f) | 40 | 43 | 6 | ||||||||||||||||||
Non-GAAP EPS(f) | $ | 0.78 | 0.84 | 8 | |||||||||||||||||
Non-GAAP weighted-average diluted shares | 52.1 | 50.9 | (2 | ) | |||||||||||||||||
(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 Venezuela devaluations, prior to deconsolidation, 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) | 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. |
(d) | See pages 8-9 for more information. |
(e) | Non-GAAP results are reconciled to applicable GAAP results on pages 10-13. |
(f) | Attributable to Brink's. |
(g) | Segment revenues equal our total reported non-GAAP revenues. |
GAAP | Organic | Acquisitions / | % Change | |||||||||||||||||||
2018 | Change | Dispositions(a) | Currency(b) | 2019 | Total | Organic | ||||||||||||||||
Revenues: | ||||||||||||||||||||||
North America | $ | 644 | 39 | 199 | (4 | ) | 877 | 36 | 6 | |||||||||||||
South America | 488 | 68 | 37 | (138 | ) | 456 | (7 | ) | 14 | |||||||||||||
Rest of World | 545 | 6 | (35 | ) | (29 | ) | 487 | (11 | ) | 1 | ||||||||||||
Segment revenues(g) | $ | 1,677 | 112 | 201 | (171 | ) | 1,819 | 8 | 7 | |||||||||||||
Other items not allocated to segments(d) | 51 | (51 | ) | — | — | — | unfav | unfav | ||||||||||||||
Revenues - GAAP | $ | 1,729 | 61 | 200 | (171 | ) | 1,819 | 5 | 4 | |||||||||||||
Operating profit: | ||||||||||||||||||||||
North America | $ | 47 | 29 | 15 | — | 90 | 94 | 62 | ||||||||||||||
South America | 102 | 20 | 8 | (42 | ) | 88 | (13 | ) | 20 | |||||||||||||
Rest of World | 52 | (1 | ) | 1 | (2 | ) | 50 | (3 | ) | (1 | ) | |||||||||||
Segment operating profit | 200 | 49 | 23 | (44 | ) | 228 | 14 | 24 | ||||||||||||||
Corporate(c) | (53 | ) | (5 | ) | — | 3 | (55 | ) | 4 | 10 | ||||||||||||
Operating profit - non-GAAP | $ | 148 | 44 | 23 | (41 | ) | 174 | 18 | 30 | |||||||||||||
Other items not allocated to segments(d) | (21 | ) | (22 | ) | (28 | ) | 8 | (63 | ) | unfav | unfav | |||||||||||
Operating profit - GAAP | $ | 127 | 22 | (4 | ) | (33 | ) | 111 | (12 | ) | 17 | |||||||||||
GAAP interest expense | (31 | ) | (46 | ) | 48 | |||||||||||||||||
GAAP loss on deconsolidation of Venezuela operations | (127 | ) | — | (100 | ) | |||||||||||||||||
GAAP interest and other income (expense) | (21 | ) | (14 | ) | (33 | ) | ||||||||||||||||
GAAP provision for income taxes | 30 | 22 | (25 | ) | ||||||||||||||||||
GAAP noncontrolling interests | 4 | 2 | (34 | ) | ||||||||||||||||||
GAAP income (loss) from continuing operations(f) | (86 | ) | 26 | fav | ||||||||||||||||||
GAAP EPS(f) | $ | (1.68 | ) | 0.52 | fav | |||||||||||||||||
GAAP weighted-average diluted shares | 51.0 | 50.9 | — | |||||||||||||||||||
Non-GAAP(e) | Organic | Acquisitions / | % Change | ||||||||||||||||||
2018 | Change | Dispositions(a) | Currency(b) | 2019 | Total | Organic | |||||||||||||||
Segment revenues - GAAP/non-GAAP | $ | 1,677 | 112 | 201 | (171 | ) | 1,819 | 8 | 7 | ||||||||||||
Non-GAAP operating profit | 148 | 44 | 23 | (41 | ) | 174 | 18 | 30 | |||||||||||||
Non-GAAP interest expense | (30 | ) | (43 | ) | 41 | ||||||||||||||||
Non-GAAP loss on deconsolidation of Venezuela operations | — | — | — | ||||||||||||||||||
Non-GAAP interest and other income (expense) | 4 | (4 | ) | unfav | |||||||||||||||||
Non-GAAP provision for income taxes | 42 | 42 | 1 | ||||||||||||||||||
Non-GAAP noncontrolling interests | 4 | 2 | (41 | ) | |||||||||||||||||
Non-GAAP income from continuing operations(f) | 76 | 83 | 9 | ||||||||||||||||||
Non-GAAP EPS(f) | $ | 1.45 | 1.63 | 12 | |||||||||||||||||
Non-GAAP weighted-average diluted shares | 52.1 | 50.9 | (2 | ) | |||||||||||||||||
December 31, 2018 | June 30, 2019 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 343.4 | 304.9 | |||
Restricted cash | 136.1 | 105.8 | ||||
Accounts receivable, net | 599.5 | 678.3 | ||||
Right-of-use assets, net | — | 280.8 | ||||
Property and equipment, net | 699.4 | 712.7 | ||||
Goodwill and intangibles | 907.5 | 1,062.0 | ||||
Deferred income taxes | 236.5 | 239.0 | ||||
Other | 313.6 | 348.9 | ||||
Total assets | $ | 3,236.0 | 3,732.4 | |||
Liabilities and Equity | ||||||
Accounts payable | 174.6 | 165.7 | ||||
Debt | 1,554.0 | 1,759.5 | ||||
Retirement benefits | 563.0 | 555.2 | ||||
Accrued liabilities | 502.1 | 561.4 | ||||
Lease liabilities | — | 229.9 | ||||
Other | 275.7 | 251.0 | ||||
Total liabilities | 3,069.4 | 3,522.7 | ||||
Equity | 166.6 | 209.7 | ||||
Total liabilities and equity | $ | 3,236.0 | 3,732.4 |
Six Months Ended June 30, | ||||||
2018 | 2019 | |||||
Net cash provided by operating activities | $ | 109.1 | 23.9 | |||
Net cash used by investing activities | (107.4 | ) | (242.7 | ) | ||
Net cash provided (used) by financing activities | (54.5 | ) | 149.5 | |||
Effect of exchange rate changes on cash | (24.0 | ) | 0.5 | |||
Cash, cash equivalents and restricted cash: | ||||||
Increase (decrease) | (76.8 | ) | (68.8 | ) | ||
Balance at beginning of period | 726.9 | 479.5 | ||||
Balance at end of period | $ | 650.1 | 410.7 | |||
Supplemental Cash Flow Information | ||||||
Capital expenditures | $ | (73.3 | ) | (73.1 | ) | |
Acquisitions | — | (167.0 | ) | |||
Depreciation and amortization | 77.9 | 96.6 | ||||
Cash paid for income taxes, net | (48.6 | ) | (31.9 | ) |
Revenues | |||||||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
North America | $ | 320.1 | 324.0 | 383.4 | 438.8 | 1,466.3 | $ | 434.5 | 442.5 | 877.0 | |||||||||||||||
South America | 254.8 | 233.3 | 215.5 | 223.3 | 926.9 | 230.3 | 225.2 | 455.5 | |||||||||||||||||
Rest of World | 278.4 | 266.8 | 253.5 | 245.6 | 1,044.3 | 240.2 | 246.6 | 486.8 | |||||||||||||||||
Segment revenues - GAAP and Non-GAAP | 853.3 | 824.1 | 852.4 | 907.7 | 3,437.5 | 905.0 | 914.3 | 1,819.3 | |||||||||||||||||
Other items not allocated to segments(a) | |||||||||||||||||||||||||
Venezuela operations | 25.8 | 25.6 | — | — | 51.4 | — | — | — | |||||||||||||||||
Acquisitions and dispositions | — | — | — | — | — | — | (0.3 | ) | (0.3 | ) | |||||||||||||||
GAAP | $ | 879.1 | 849.7 | 852.4 | 907.7 | 3,488.9 | $ | 905.0 | 914.0 | 1,819.0 | |||||||||||||||
Operating Profit | |||||||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Operating profit: | |||||||||||||||||||||||||
North America | $ | 20.6 | 26.1 | 33.6 | 49.5 | 129.8 | $ | 44.0 | 46.4 | 90.4 | |||||||||||||||
South America | 55.6 | 46.1 | 46.3 | 50.7 | 198.7 | 43.0 | 45.0 | 88.0 | |||||||||||||||||
Rest of World | 25.6 | 26.2 | 30.8 | 31.8 | 114.4 | 23.8 | 26.2 | 50.0 | |||||||||||||||||
Corporate | (30.3 | ) | (22.2 | ) | (15.4 | ) | (28.1 | ) | (96.0 | ) | (26.0 | ) | (28.8 | ) | (54.8 | ) | |||||||||
Non-GAAP | 71.5 | 76.2 | 95.3 | 103.9 | 346.9 | 84.8 | 88.8 | 173.6 | |||||||||||||||||
Other items not allocated to segments(a) | |||||||||||||||||||||||||
Venezuela operations | 3.5 | (1.2 | ) | — | — | 2.3 | — | — | — | ||||||||||||||||
Reorganization and Restructuring | (3.7 | ) | (4.5 | ) | (7.3 | ) | (5.1 | ) | (20.6 | ) | (3.5 | ) | (10.6 | ) | (14.1 | ) | |||||||||
Acquisitions and dispositions | (6.5 | ) | (7.4 | ) | (10.7 | ) | (16.8 | ) | (41.4 | ) | (17.2 | ) | (22.6 | ) | (39.8 | ) | |||||||||
Argentina highly inflationary impact | — | — | (8.3 | ) | 0.3 | (8.0 | ) | (4.3 | ) | (0.1 | ) | (4.4 | ) | ||||||||||||
Reporting compliance | — | (1.4 | ) | (2.0 | ) | (1.1 | ) | (4.5 | ) | (1.4 | ) | (2.9 | ) | (4.3 | ) | ||||||||||
GAAP | $ | 64.8 | 61.7 | 67.0 | 81.2 | 274.7 | $ | 58.4 | 52.6 | 111.0 | |||||||||||||||
Margin | |||||||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Margin: | |||||||||||||||||||||||||
North America | 6.4 | % | 8.1 | 8.8 | 11.3 | 8.9 | 10.1 | % | 10.5 | 10.3 | |||||||||||||||
South America | 21.8 | 19.8 | 21.5 | 22.7 | 21.4 | 18.7 | 20.0 | 19.3 | |||||||||||||||||
Rest of World | 9.2 | 9.8 | 12.1 | 12.9 | 11.0 | 9.9 | 10.6 | 10.3 | |||||||||||||||||
Non-GAAP | 8.4 | 9.2 | 11.2 | 11.4 | 10.1 | 9.4 | 9.7 | 9.5 | |||||||||||||||||
Other items not allocated to segments(a) | (1.0 | ) | (1.9 | ) | (3.3 | ) | (2.5 | ) | (2.2 | ) | (2.9 | ) | (3.9 | ) | (3.4 | ) | |||||||||
GAAP | 7.4 | % | 7.3 | 7.9 | 8.9 | 7.9 | 6.5 | % | 5.8 | 6.1 |
(a) | See explanation of items on page 9. |
• | We incurred $17.6 million in integration costs related to Dunbar in the first six months of 2019. |
• | Amortization expense for acquisition-related intangible assets was $13.5 million in the first six months of 2019. |
• | Restructuring costs related to our Dunbar and Rodoban acquisitions were $3.8 million in the first six months of 2019. |
• | Transaction costs related to business acquisitions were $1.9 million in the first six months of 2019. |
• | Compensation expense related to the retention of key Dunbar employees was $1.6 million in the first six months of 2019. |
• | In the first six months of 2019, we recognized $1.3 million in asset impairment charges and severance costs related to the exit from our top-up prepaid mobile phone business in Brazil. |
• | Amortization expense for acquisition-related intangible assets was $17.7 million in 2018. |
• | Integration costs in 2018 related to acquisitions in France and the U.S. were $8.1 million. |
• | 2018 transaction costs related to business acquisitions were $6.7 million. |
• | We incurred 2018 severance charges related to our acquisitions in Argentina, France, U.S. and Brazil of $5.0 million. |
• | Compensation expense related to the retention of key Dunbar employees was $4.1 million in 2018. |
• | We recognized a net gain in 2018 ($2.6 million, net of statutory employee benefit) on the sale of real estate in Mexico. |
YTD '18 | YTD '19 | ||||||||||||||||||
Pre-tax | Tax | Effective tax rate | Pre-tax | Tax | Effective tax rate | ||||||||||||||
Effective Income Tax Rate | |||||||||||||||||||
GAAP | $ | (52.2 | ) | 30.0 | (57.5 | )% | $ | 51.0 | 22.4 | 43.9 | % | ||||||||
Retirement plans(c) | 16.9 | 3.9 | 14.9 | 3.5 | |||||||||||||||
Venezuela operations(a)(j) | 0.6 | (3.9 | ) | 0.9 | — | ||||||||||||||
Reorganization and Restructuring(a) | 8.2 | 2.7 | 14.1 | 3.6 | |||||||||||||||
Acquisitions and dispositions(a) | 19.6 | 9.3 | 42.8 | 2.8 | |||||||||||||||
Tax on accelerated income(e) | — | 0.3 | — | — | |||||||||||||||
Argentina highly inflationary impact(a) | — | — | 4.4 | — | |||||||||||||||
Reporting compliance(a) | 1.4 | 0.3 | 4.3 | 0.1 | |||||||||||||||
Gain on lease termination(k) | — | — | (5.2 | ) | — | ||||||||||||||
Loss on deconsolidation of Venezuela operations(f) | 126.7 | — | — | — | |||||||||||||||
Income tax rate adjustment(b) | — | (1.1 | ) | — | 9.6 | ||||||||||||||
Non-GAAP | $ | 121.2 | 41.5 | 34.2 | % | $ | 127.2 | 42.0 | 33.0 | % |
(a) | See “Other Items Not Allocated To Segments” on pages 8-9 for details. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. |
(b) | 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 is estimated at 33.0% for 2019 and was 34.2% for 2018. |
(c) | Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges related to these non-U.S. plans are also excluded from non-GAAP results. |
(d) | Represents the estimated impact of tax legislation enacted into law in the fourth quarter of 2017. This primarily relates to the U.S. Tax Reform expense from the remeasurement of our net deferred tax assets. |
(e) | The non-GAAP tax rate excludes the 2018 and 2017 foreign tax benefits that resulted from the transaction that accelerated U.S. tax in 2015. |
(f) | Effective June 30, 2018, we deconsolidated our investment in Venezuelan subsidiaries and recognized a pretax charge of $126.7 million. |
(g) | Due to reorganization and restructuring activities, there was a $7.5 million non-GAAP adjustment to share-based compensation in the first half of 2019 and $0.1 million in the fourth quarter and full-year of 2018. There is no difference between GAAP and non-GAAP share-based compensation amounts for the other periods presented. |
(h) | Adjusted EBITDA is defined as non-GAAP income from continuing operations excluding the impact of non-GAAP interest expense, non-GAAP income tax provision, non-GAAP depreciation and amortization and non-GAAP share-based compensation. |
(i) | Because we reported a loss from continuing operations on a GAAP basis in the second quarter of 2018 and full year 2018, GAAP EPS was calculated using basic shares. However, as we reported income from continuing operations on a non-GAAP basis in the second quarter of 2018 and full year 2018, non-GAAP EPS was calculated using diluted shares. |
(j) | Post-deconsolidation funding of ongoing costs related to our Venezuelan operations was $0.9 million in the first six months of 2019 ($0.6 million in the second half of 2018) and was expensed as incurred and reported in interest and other nonoperating income (expense). We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect. |
(k) | Gain on termination of a mining lease obligation related to former coal operations. We have no remaining mining leases. |
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
GAAP | $ | 879.1 | 849.7 | 852.4 | 907.7 | 3,488.9 | $ | 905.0 | 914.0 | 1,819.0 | |||||||||||||||
Venezuela operations(a) | (25.8 | ) | (25.6 | ) | — | — | (51.4 | ) | — | — | — | ||||||||||||||
Acquisitions and dispositions(a) | — | — | — | — | — | — | 0.3 | 0.3 | |||||||||||||||||
Non-GAAP | $ | 853.3 | 824.1 | 852.4 | 907.7 | 3,437.5 | $ | 905.0 | 914.3 | 1,819.3 | |||||||||||||||
Operating profit (loss): | |||||||||||||||||||||||||
GAAP | $ | 64.8 | 61.7 | 67.0 | 81.2 | 274.7 | $ | 58.4 | 52.6 | 111.0 | |||||||||||||||
Venezuela operations(a) | (3.5 | ) | 1.2 | — | — | (2.3 | ) | — | — | — | |||||||||||||||
Reorganization and Restructuring(a) | 3.7 | 4.5 | 7.3 | 5.1 | 20.6 | 3.5 | 10.6 | 14.1 | |||||||||||||||||
Acquisitions and dispositions(a) | 6.5 | 7.4 | 10.7 | 16.8 | 41.4 | 17.2 | 22.6 | 39.8 | |||||||||||||||||
Argentina highly inflationary impact(a) | — | — | 8.3 | (0.3 | ) | 8.0 | 4.3 | 0.1 | 4.4 | ||||||||||||||||
Reporting compliance(a) | — | 1.4 | 2.0 | 1.1 | 4.5 | 1.4 | 2.9 | 4.3 | |||||||||||||||||
Non-GAAP | $ | 71.5 | 76.2 | 95.3 | 103.9 | 346.9 | $ | 84.8 | 88.8 | 173.6 | |||||||||||||||
Operating margin: | |||||||||||||||||||||||||
GAAP margin | 7.4 | % | 7.3 | % | 7.9 | % | 8.9 | % | 7.9 | % | 6.5 | % | 5.8 | % | 6.1 | % | |||||||||
Non-GAAP margin | 8.4 | % | 9.2 | % | 11.2 | % | 11.4 | % | 10.1 | % | 9.4 | % | 9.7 | % | 9.5 | % | |||||||||
Interest expense: | |||||||||||||||||||||||||
GAAP | $ | (15.0 | ) | (15.8 | ) | (17.0 | ) | (18.9 | ) | (66.7 | ) | $ | (23.0 | ) | (22.7 | ) | (45.7 | ) | |||||||
Venezuela operations(a) | — | 0.1 | — | — | 0.1 | — | — | — | |||||||||||||||||
Acquisitions and dispositions(a) | 0.2 | 0.2 | 0.1 | 0.7 | 1.2 | 1.5 | 1.5 | 3.0 | |||||||||||||||||
Argentina highly inflationary impact(a) | — | — | — | (0.2 | ) | (0.2 | ) | — | — | — | |||||||||||||||
Non-GAAP | $ | (14.8 | ) | (15.5 | ) | (16.9 | ) | (18.4 | ) | (65.6 | ) | $ | (21.5 | ) | (21.2 | ) | (42.7 | ) | |||||||
Loss on deconsolidation of Venezuela operations: | |||||||||||||||||||||||||
GAAP | $ | — | (126.7 | ) | — | — | (126.7 | ) | $ | — | — | — | |||||||||||||
Loss on deconsolidation of Venezuela operations(f) | — | 126.7 | — | — | 126.7 | — | — | — | |||||||||||||||||
Non-GAAP | $ | — | — | — | — | — | $ | — | — | — | |||||||||||||||
Interest and other income (expense): | |||||||||||||||||||||||||
GAAP | $ | (13.1 | ) | (8.1 | ) | (8.1 | ) | (9.5 | ) | (38.8 | ) | $ | (11.2 | ) | (3.1 | ) | (14.3 | ) | |||||||
Retirement plans(c) | 8.8 | 8.1 | 8.1 | 8.2 | 33.2 | 8.4 | 6.5 | 14.9 | |||||||||||||||||
Venezuela operations(a)(j) | 1.9 | 0.9 | 0.3 | 0.3 | 3.4 | 0.5 | 0.4 | 0.9 | |||||||||||||||||
Acquisitions and dispositions(a) | 2.9 | 2.4 | 0.2 | (1.1 | ) | 4.4 | — | — | — | ||||||||||||||||
Argentina highly inflationary impact(a) | — | — | (0.5 | ) | — | (0.5 | ) | — | — | — | |||||||||||||||
Gain on lease termination(k) | — | — | — | — | — | — | (5.2 | ) | (5.2 | ) | |||||||||||||||
Non-GAAP | $ | 0.5 | 3.3 | — | (2.1 | ) | 1.7 | $ | (2.3 | ) | (1.4 | ) | (3.7 | ) |
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Taxes: | |||||||||||||||||||||||||
GAAP | $ | 11.4 | 18.6 | 23.0 | 17.0 | 70.0 | $ | 9.7 | 12.7 | 22.4 | |||||||||||||||
Retirement plans(c) | 1.9 | 2.0 | 2.0 | 2.0 | 7.9 | 1.9 | 1.6 | 3.5 | |||||||||||||||||
Venezuela operations(a) | (1.5 | ) | (2.4 | ) | — | — | (3.9 | ) | — | — | — | ||||||||||||||
Reorganization and Restructuring(a) | 1.2 | 1.5 | 2.4 | 1.6 | 6.7 | 1.0 | 2.6 | 3.6 | |||||||||||||||||
Acquisitions and dispositions(a) | 3.1 | 6.2 | 2.8 | 1.7 | 13.8 | 1.7 | 1.1 | 2.8 | |||||||||||||||||
Tax reform(d) | — | — | — | 2.1 | 2.1 | — | — | — | |||||||||||||||||
Tax on accelerated income(e) | 0.5 | (0.2 | ) | — | (0.3 | ) | — | — | — | — | |||||||||||||||
Argentina highly inflationary impact(a) | — | — | 0.6 | (0.6 | ) | — | — | — | — | ||||||||||||||||
Reporting compliance(a) | — | 0.3 | 0.5 | (0.7 | ) | 0.1 | — | 0.1 | 0.1 | ||||||||||||||||
Gain on lease termination(k) | — | — | — | — | — | — | — | — | |||||||||||||||||
Loss on deconsolidation of Venezuela operations(f) | — | — | 0.1 | — | 0.1 | — | — | — | |||||||||||||||||
Income tax rate adjustment(b) | 3.0 | (4.1 | ) | (4.6 | ) | 5.7 | — | 5.8 | 3.8 | 9.6 | |||||||||||||||
Non-GAAP | $ | 19.6 | 21.9 | 26.8 | 28.5 | 96.8 | $ | 20.1 | 21.9 | 42.0 | |||||||||||||||
Noncontrolling interests: | |||||||||||||||||||||||||
GAAP | $ | 3.2 | 0.3 | 1.4 | 0.9 | 5.8 | $ | 0.8 | 1.5 | 2.3 | |||||||||||||||
Venezuela operations(a) | (0.6 | ) | 1.6 | — | — | 1.0 | — | — | — | ||||||||||||||||
Reorganization and Restructuring(a) | — | (0.1 | ) | — | 0.1 | — | — | — | — | ||||||||||||||||
Income tax rate adjustment(b) | (0.4 | ) | (0.1 | ) | 0.6 | (0.1 | ) | — | — | — | — | ||||||||||||||
Non-GAAP | $ | 2.2 | 1.7 | 2.0 | 0.9 | 6.8 | $ | 0.8 | 1.5 | 2.3 | |||||||||||||||
Income (loss) from continuing operations attributable to Brink's: | |||||||||||||||||||||||||
GAAP | $ | 22.1 | (107.8 | ) | 17.5 | 34.9 | (33.3 | ) | $ | 13.7 | 12.6 | 26.3 | |||||||||||||
Retirement plans(c) | 6.9 | 6.1 | 6.1 | 6.2 | 25.3 | 6.5 | 4.9 | 11.4 | |||||||||||||||||
Venezuela operations(a)(j) | 0.5 | 3.0 | 0.3 | 0.3 | 4.1 | 0.5 | 0.4 | 0.9 | |||||||||||||||||
Reorganization and Restructuring(a) | 2.5 | 3.1 | 4.9 | 3.4 | 13.9 | 2.5 | 8.0 | 10.5 | |||||||||||||||||
Acquisitions and dispositions(a) | 6.5 | 3.8 | 8.2 | 14.7 | 33.2 | 17.0 | 23.0 | 40.0 | |||||||||||||||||
Tax reform(d) | — | — | — | (2.1 | ) | (2.1 | ) | — | — | — | |||||||||||||||
Tax on accelerated income(e) | (0.5 | ) | 0.2 | — | 0.3 | — | — | — | — | ||||||||||||||||
Argentina highly inflationary impact(a) | — | — | 7.2 | 0.1 | 7.3 | 4.3 | 0.1 | 4.4 | |||||||||||||||||
Reporting compliance(a) | — | 1.1 | 1.5 | 1.8 | 4.4 | 1.4 | 2.8 | 4.2 | |||||||||||||||||
Gain on lease termination(k) | — | — | — | — | — | — | (5.2 | ) | (5.2 | ) | |||||||||||||||
Loss on deconsolidation of Venezuela operations(f) | — | 126.7 | (0.1 | ) | — | 126.6 | — | — | — | ||||||||||||||||
Income tax rate adjustment(b) | (2.6 | ) | 4.2 | 4.0 | (5.6 | ) | — | (5.8 | ) | (3.8 | ) | (9.6 | ) | ||||||||||||
Non-GAAP | $ | 35.4 | 40.4 | 49.6 | 54.0 | 179.4 | $ | 40.1 | 42.8 | 82.9 |
2018 | 2019 | ||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | 2Q | Six Months | ||||||||||||||||||
Adjusted EBITDA(h): | |||||||||||||||||||||||||
Net income (loss) attributable to Brink's - GAAP | $ | 22.3 | (107.9 | ) | 17.4 | 34.9 | (33.3 | ) | $ | 13.7 | 12.5 | 26.2 | |||||||||||||
Interest expense - GAAP | 15.0 | 15.8 | 17.0 | 18.9 | 66.7 | 23.0 | 22.7 | 45.7 | |||||||||||||||||
Income tax provision - GAAP | 11.4 | 18.6 | 23.0 | 17.0 | 70.0 | 9.7 | 12.7 | 22.4 | |||||||||||||||||
Depreciation and amortization - GAAP | 38.8 | 39.1 | 41.6 | 42.8 | 162.3 | 47.9 | 48.7 | 96.6 | |||||||||||||||||
EBITDA | $ | 87.5 | (34.4 | ) | 99.0 | 113.6 | 265.7 | $ | 94.3 | 96.6 | 190.9 | ||||||||||||||
Discontinued operations - GAAP | (0.2 | ) | 0.1 | 0.1 | — | — | — | 0.1 | 0.1 | ||||||||||||||||
Retirement plans(c) | 8.8 | 8.1 | 8.1 | 8.2 | 33.2 | 8.4 | 6.5 | 14.9 | |||||||||||||||||
Venezuela operations(a)(j) | (1.5 | ) | (0.1 | ) | 0.3 | 0.3 | (1.0 | ) | 0.5 | 0.4 | 0.9 | ||||||||||||||
Reorganization and Restructuring(a) | 2.5 | 4.4 | 6.9 | 4.9 | 18.7 | 3.4 | 10.6 | 14.0 | |||||||||||||||||
Acquisitions and dispositions(a) | 5.6 | 6.4 | 6.4 | 9.7 | 28.1 | 10.8 | 12.2 | 23.0 | |||||||||||||||||
Argentina highly inflationary impact(a) | — | — | 7.8 | (0.3 | ) | 7.5 | 4.1 | (0.2 | ) | 3.9 | |||||||||||||||
Reporting compliance(a) | — | 1.4 | 2.0 | 1.1 | 4.5 | 1.4 | 2.9 | 4.3 | |||||||||||||||||
Gain on lease termination(k) | — | — | — | — | — | — | (5.2 | ) | (5.2 | ) | |||||||||||||||
Loss on deconsolidation of Venezuela operations(f) | — | 126.7 | — | — | 126.7 | — | — | — | |||||||||||||||||
Income tax rate adjustment(b) | 0.4 | 0.1 | (0.6 | ) | 0.1 | — | — | — | — | ||||||||||||||||
Share-based compensation(g) | 6.8 | 5.7 | 6.3 | 9.5 | 28.3 | 8.9 | 9.7 | 18.6 | |||||||||||||||||
Adjusted EBITDA | $ | 109.9 | 118.4 | 136.3 | 147.1 | 511.7 | $ | 131.8 | 133.6 | 265.4 | |||||||||||||||
EPS: | |||||||||||||||||||||||||
GAAP | $ | 0.42 | (2.11 | ) | 0.34 | 0.68 | (0.65 | ) | $ | 0.27 | 0.25 | 0.52 | |||||||||||||
Retirement plans(c) | 0.13 | 0.12 | 0.12 | 0.12 | 0.49 | 0.13 | 0.10 | 0.22 | |||||||||||||||||
Venezuela operations(a)(j) | 0.01 | 0.06 | 0.01 | 0.01 | 0.08 | 0.01 | 0.01 | 0.02 | |||||||||||||||||
Reorganization and Restructuring costs(a) | 0.05 | 0.06 | 0.09 | 0.07 | 0.27 | 0.05 | 0.16 | 0.21 | |||||||||||||||||
Acquisitions and dispositions(a) | 0.12 | 0.07 | 0.16 | 0.29 | 0.64 | 0.33 | 0.45 | 0.79 | |||||||||||||||||
Tax reform(d) | — | — | — | (0.04 | ) | (0.04 | ) | — | — | — | |||||||||||||||
Tax on accelerated income(e) | (0.01 | ) | — | — | 0.01 | — | — | — | — | ||||||||||||||||
Argentina highly inflationary impact(a) | — | — | 0.14 | — | 0.14 | 0.09 | — | 0.09 | |||||||||||||||||
Reporting compliance(a) | — | 0.02 | 0.03 | 0.04 | 0.09 | 0.03 | 0.06 | 0.08 | |||||||||||||||||
Gain on lease termination(k) | — | — | — | — | — | — | (0.10 | ) | (0.10 | ) | |||||||||||||||
Loss on deconsolidation of Venezuela operations(f) | — | 2.43 | — | — | 2.44 | — | — | — | |||||||||||||||||
Income tax rate adjustment(b) | (0.05 | ) | 0.08 | 0.08 | (0.11 | ) | — | (0.11 | ) | (0.07 | ) | (0.19 | ) | ||||||||||||
Share adjustment(i) | — | 0.04 | — | — | 0.01 | — | — | — | |||||||||||||||||
Non-GAAP | $ | 0.68 | 0.78 | 0.95 | 1.05 | 3.46 | $ | 0.79 | 0.84 | 1.63 | |||||||||||||||
Depreciation and Amortization: | |||||||||||||||||||||||||
GAAP | $ | 38.8 | 39.1 | 41.6 | 42.8 | 162.3 | $ | 47.9 | 48.7 | 96.6 | |||||||||||||||
Venezuela operations(a) | (0.5 | ) | (0.6 | ) | — | — | (1.1 | ) | — | — | — | ||||||||||||||
Reorganization and Restructuring costs(a) | (1.2 | ) | (0.2 | ) | (0.4 | ) | (0.1 | ) | (1.9 | ) | (0.1 | ) | — | (0.1 | ) | ||||||||||
Acquisitions and dispositions(a) | (3.8 | ) | (3.4 | ) | (4.5 | ) | (6.0 | ) | (17.7 | ) | (6.4 | ) | (10.4 | ) | (16.8 | ) | |||||||||
Argentina highly inflationary impact(a) | — | — | — | — | — | (0.2 | ) | (0.3 | ) | (0.5 | ) | ||||||||||||||
Non-GAAP | $ | 33.3 | 34.9 | 36.7 | 36.7 | 141.6 | $ | 41.2 | 38.0 | 79.2 |