UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of Earliest Event Reported): April 30, 2008
THE
BRINK’S COMPANY
(Exact
name of registrant as specified in its charter)
|
Virginia
|
1-9148
|
54-1317776
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
1801
Bayberry Court
P.
O. Box 18100
Richmond,
VA 23226-8100
(Address
and zip code of
principal
executive offices)
Registrant’s
telephone number, including area code: (804) 289-9600
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2.):
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting
materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.02. Results
of Operations and Financial Condition.
On
April 30, 2008, The Brink’s Company issued a press release regarding its results
for the first quarter ended March 31, 2008. A copy of this release is being
furnished as Exhibit 99 to this Current Report on Form 8-K.
In
accordance with General Instruction B.2 of Form 8-K, the information in this
Current Report on Form 8-K, including Exhibit 99, shall not be deemed “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, except as shall be expressly set forth by specific references in
such a filing.
Item
9.01. Financial
Statements and Exhibits.
|
(d)
|
Exhibits
|
|
99
|
Press
Release, dated April 30, 2008, issued by The Brink’s
Company.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
| THE BRINK’S COMPANY | |||
| (Registrant) | |||
|
Date:
April 30, 2008
|
By:
|
/s/ Robert T. Ritter | |
| Robert T. Ritter | |||
| Vice President and Chief Financial Officer | |||
EXHIBIT
INDEX
EXHIBIT DESCRIPTION
99 Press
Release, dated April 30, 2008, issued by The Brink’s Company.
EXHIBIT 99
|
The
Brink’s Company
|
|
|
1801
Bayberry Court
|
|
|
P.O.
Box 18100
|
|
|
Richmond, VA
23226-8100 USA
|
|
|
Tel.
804.289.9600
|
|
|
Fax
804.289.9770
|
|
| PRESS RELEASE | |
|
FOR
IMMEDIATE RELEASE
|
Contact:
Investor
Relations
804.289.9709
THE
BRINK’S COMPANY REPORTS
HIGHER
FIRST-QUARTER EARNINGS
Latin
American Operations and Brink’s Home Security Unit Drive Strong Profit
Growth
RICHMOND, Va., April 30, 2008
– The Brink’s Company (NYSE: BCO), a global leader in security-related services,
reported first-quarter income from continuing operations of $48.0 million or
$1.02 per share, up from $31.1 million or 66 cents per share in last year’s
first quarter.
First-quarter
revenue was $920.6 million, up 24% (16% on a constant currency basis) from
$740.5 million in the first quarter of 2007. Operating profit rose
51% to $97.3 million, up from $64.3 million last year and was driven mainly by
strong profit growth at Brink’s, Incorporated’s Latin American operations and
Brink’s Home Security. The effect of changes in currency values on
operating profit was insignificant.
This
year’s first-quarter results include approximately $35 million of additional
revenue from one-time currency conversion operations, which are expected to
decline sharply in the second quarter and be completed during the third
quarter.
Corporate
expense in the first quarter of 2008 includes approximately $6 million related
to its strategic review, proxy matters and the initial steps supporting the
planned execution of the previously announced spin-off of Brink’s Home
Security.
Michael
T. Dan, chairman, president and chief executive officer of The Brink’s Company,
said: “Solid growth across the board in Latin America, including the temporary
effects of the currency conversion project, and improvement in several European
countries combined to sharply increase Brink’s, Incorporated’s profits in the
recent quarter. Our focus for the rest of the year will be to
maintain improvements in Europe and look for ways to combat tougher competitive
environments and
1
higher
costs in our operations in the United States and France. Our
full-year goal for this business in 2008 is to deliver organic revenue growth in
the high-single-digit percentage range with an operating profit margin of
approximately 9%.”
“In a
difficult housing market, Brink’s Home Security once again achieved solid growth
in revenue, operating profit, cash flow and subscribers. Despite
current economic headwinds, we still expect Brink’s Home Security to deliver 10%
or better annual growth in revenue and operating profit while growing the
subscriber base in the high-single-digit percentage range.”
Business Unit Performance:
First-Quarter 2008 Versus 2007
Brink’s,
Incorporated (“Brink’s”)
Brink’s,
the company’s secure transportation and cash management unit, had first-quarter
revenue of $792.8 million, up 27% (17% on a constant currency basis) from $625.8
million in the year-ago quarter. Operating profit rose 61% to $82.0
million, for a margin of 10.3%, up from $51.0 million last year and a margin of
8.1%. The increase in operating profit was due primarily to solid
growth in Latin American operations, including the effect of temporarily higher
volumes related to our support of customers during the currency conversion
process. Due to inflationary pressures, especially those related to
wage increases in Latin America, and less currency conversion work, the
second-quarter 2008 operating profit margin is expected to be approximately
7%.
Capital
expenditures during the quarter totaled $31.5 million. Capital
spending at Brink’s in 2008 is expected to be between $155 million and $165
million.
Brink’s
North America
First-quarter
revenue in North America was $230.3 million, up 9% from $211.2 million last
year. Operating profit was $13.4 million, down 27% from $18.3 million
in the year-ago quarter due to higher costs for labor, transportation and
selling activities and lower volumes in the higher-margin U.S. Global Services
operations. The operating profit margin for the quarter was 5.8%,
down from 8.7% in last year’s first quarter.
Brink’s
International
First-quarter
revenue from international operations was $562.5 million, up 36% (22% on a
constant currency basis) from $414.6 million in 2007, reflecting increases in
all regions. First-quarter operating profit more than doubled to
$68.6 million, up from $32.7 million last year. The
improvement
2
was due
primarily to higher profits in several Latin American countries. The
operating profit margin for international operations was 12.2%, up from 7.9% in
last year’s first quarter.
EMEA (Europe, Middle East,
Africa): First-quarter revenue for EMEA was $332.4
million, up 23% (8% on a constant currency basis) from $270.4 million in
2007. Operating profit declined slightly versus the year-ago quarter
as improved performance in several countries was offset by weakness in the
French operations.
Latin
America: First-quarter revenue in Latin America
increased 63% (51% on a constant currency basis) to $211.0 million, up from
$129.5 million in 2007. Growth in the first quarter of 2008 included
approximately $35 million related to the currency conversion in
Venezuela. Revenues from conversion operations are expected to
decline to approximately $10 million in the second quarter. Operating
profit was up significantly over last year as profit growth in Venezuela was
supplemented by strong performance in Brazil, Colombia, Chile and
Argentina.
Asia-Pacific: First-quarter
revenue in Asia-Pacific was $19.1 million versus $14.7 million last
year. Operating profit increased over the year-ago period due to
improved results from Global Services.
Brink’s
Home Security (“BHS”)
First-quarter
revenue at BHS was $127.8 million, up 11% from $114.7 million in 2007 due
primarily to continued growth in the subscriber base and higher average
monitoring rates. BHS ended the quarter with approximately 1.25
million subscribers, up 8.4% from the year-ago level. Monthly
recurring revenue rose 12% to $38.3 million (see Non-GAAP Reconciliations for a
reconciliation of monthly recurring revenue to reported revenue).
Operating
profit was $32.0 million, up 14% from $28.2 million last year as higher profits
from recurring services offset increased investment in new
subscribers. The first-quarter operating profit margin was 25.0%, up
slightly from 24.6% in 2007.
BHS
installed approximately 44,600 systems for new customers during the quarter, a
decline of 3% from the year-ago level, and had 18,900
disconnects. The decline in installations reflects the effects of
ongoing weakness in the housing market.
The
annualized disconnect rate was 6.1% in both periods. The full-year
disconnect rate in 2008 is expected to range between 6.5% and 7.0%.
First-quarter
capital expenditures at BHS totaled $45.8 million. Total capital
spending at BHS in 2008 is expected to be between $185 million and $195
million.
3
Recent
Events
On
February 25, the company announced its intent to pursue a tax-free spin-off of
BHS into a separate publicly traded company. The spin-off is expected
to be completed in the fourth quarter of this year. The initial
filing of Form 10 with the Securities and Exchange Commission, which will
include preliminary details regarding the spin-off, is expected to occur during
the second quarter.
During
the first quarter of 2008, the company purchased 594,300 shares of its common
stock for $36.9 million or $62.16 per share under the $100 million share
repurchase authorization announced in 2007. From April 1 through
April 25, an additional 204,000 shares were purchased for $13.9 million or
$68.00 per share.
Corporate
Expenses
Total
corporate expense in the first quarter was $16.1 million, up from $11.6 million
in 2007. in the 2008 quarter, the company incurred approximately $6
million of expenses related to its strategic review, proxy matters and the
initial steps towards the planned execution of a tax-free spin-off of its BHS
subsidiary. An additional $10 million to $15 million of expenses
related to the spin-off are expected to be incurred during the balance of
2008.
Costs Related to Former
Operations Included in Continuing Operations
First-quarter
expenses related to former operations totaled $0.6 million, down from $3.3
million in 2007 due primarily to lower postretirement medical and pension
expenses.
Taxes
The effective income tax rate of 35.1%
for the first quarter of 2008 was lower than the year-ago rate of 39.9%, which
included the recording of valuation allowances on expected benefits in non U.S.
jurisdictions. The company expects the effective tax rate for
full-year 2008 to be in the range of 34% to 36%.
Discontinued
Operations
First-quarter
income from discontinued operations was $2.1 million or 4 cents per share versus
a loss of $2.4 million or 5 cents per share in the first quarter of
2007.
4
Net
Income
First-quarter
net income, which includes results from continuing and discontinued operations,
was $50.1 million or $1.07 per share versus $28.7 million or 61 cents per share
in 2007.
This
release contains both historical and forward-looking
information. Words such as “anticipates,” “estimates,”
“expects,” “projects,” “intends,” “plans,” “believes,” “may,” “should” and
similar expressions may identify forward-looking
information. Forward-looking information in this document includes,
but is not limited to, expected revenue growth, cash flow and earnings for The
Brink’s Company and its subsidiaries in 2008, including organic revenue growth
and operating profit margin at Brink’s and revenue, operating profit and
subscriber growth at BHS, maintaining improvements in Europe, combating
competitive environments and higher costs in the United States and France,
anticipated revenues from currency conversion operations, expected capital
expenditures for 2008, ongoing weakness in the housing market, the disconnect
rate at BHS, the strategic decision to spin-off BHS, the tax free nature, timing
and other expected characteristics of the spin-off, expected additional expenses
in 2008 related to the spin-off and the anticipated annual effective tax rate
for 2008. The forward-looking information in this release is subject
to known and unknown risks, uncertainties and contingencies, 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 the control of
The Brink’s Company and its subsidiaries, include, but are not limited to the
ability of the Company to complete a successful spin-off of BHS, the
satisfaction of all conditions in order to complete a spin-off of BHS, demand
for the services of Brink’s and BHS, the ability to identify and execute further
cost and operational improvements and efficiencies in the core businesses, the
impact of continuing initiatives to control costs and increase profitability,
the ability of the businesses to cost effectively match customer demand with
appropriate resources, the willingness of Brink’s and BHS’ customers to absorb
future price increases and the actions of competitors, the Company’s ability to
identify strategic opportunities and integrate them successfully, acquisitions
and dispositions made in the future, Brink’s ability to integrate recent
acquisitions, corporate expenses due to the implementation of the spin-off
decision and shareholder initiatives, decisions by the Company’s Board of
Directors, Brink’s ability to perform currency conversion cash handling services
in Venezuela successfully and without adverse operational issues, regulatory and
labor issues and higher security threats in European countries, the impact of
actions responding to current market conditions in the United States, France and
other European countries, the return to profitability of operations in
jurisdictions where Brink’s has recorded valuation adjustments, the input of
governmental authorities regarding the non-payment of customs duties and
value-added tax, the stability of the Venezuelan economy and changes in
Venezuelan policy regarding exchange rates for dividend remittances, variations
in costs or expenses and performance delays of any public or private sector
supplier, service provider or customer, the ability of the Company and its
subsidiaries to obtain appropriate insurance coverage at reasonable prices,
positions taken by insurers with respect to claims made and the financial
condition of insurers, safety and security performance, Brink’s loss experience,
changes in insurance costs, risks customarily associated with operating in
foreign countries including changing labor and economic conditions, political
instability, restrictions on repatriation of earnings and capital,
nationalization, expropriation and other forms of restrictive government
actions, costs associated with information technology and other ongoing
contractual obligations, BHS’ ability to maintain subscriber growth, the number
of household moves, the level of home sales or new home construction, potential
instability in housing credit markets, the performance of BHS’ equipment
suppliers and dealers, BHS’ ability to cost-effectively develop or incorporate
new systems in a timely manner, decisions regarding continued support of the
developing commercial business, the ability of the home security industry to
dissuade law enforcement and municipalities from refusing to respond to alarms,
the willingness of BHS’ customers to pay for private response personnel or other
alternatives to police responses to alarms, estimated reconnection experience at
BHS, costs associated with the purchase and implementation of cash processing
and security equipment, changes in the scope or method of remediation or
monitoring of the Company’s former coal operations, the timing of the
pass-through of certain costs to third parties and the timing of approvals by
governmental authorities relating to the disposal of the coal assets, changes to
estimated liabilities and assets in actuarial assumptions due to payments made,
investment returns, annual actuarial revaluations, and periodic revaluations of
reclamation liabilities, the funding levels, accounting treatment, investment
performance and costs of the company’s pension plans and the VEBA, whether the
Company’s assets or the VEBA’s assets are used to pay benefits, projections
regarding the number of participants in and beneficiaries of the Company’s
employee and retiree benefit plans, black lung claims incidence, the number of
dependents of mine workers for whom benefits are provided, actual retirement
experience of the former coal operation’s employees, actual medical and legal
expenses relating to benefits, changes in inflation rates (including medical
inflation) and interest rates, changes in mortality and morbidity assumptions,
mandatory or voluntary pension plan contributions, discovery of new facts
relating to civil suits, the addition of claims or changes in relief sought by
adverse parties, the cash, debt and tax position and growth needs of the
Company, the demand for capital by the Company and the availability and cost of
such capital, the satisfaction or waiver of limitations on the use of proceeds
contained in various of the Company’s financing arrangements, the nature of the
Company’s hedging relationships, the financial performance of the Company,
utilization of third-party advisors and the ability of the Company to hire and
retain corporate staff, changes in employee obligations, overall domestic and
international economic, political, social and business conditions, capital
markets performance, the strength of the U.S. dollar relative to foreign
currencies, foreign currency exchange rates, changes in estimates and
assumptions underlying the Company’s critical accounting policies, anticipated
return on assets, inflation, the promulgation and adoption of new accounting
standards and interpretations, seasonality, pricing and other competitive
industry factors, labor relations, fuel and copper prices, new government
regulations and interpretations of existing regulations, legislative
initiatives, judicial decisions, issuances of permits, variations in costs or
expenses and the ability of
5
counterparties
to perform. The information included in this release is
representative only as of the date of this release, and The Brink’s Company
undertakes no obligation to update any information contained in this
release.
About
The Brink’s Company
The Brink’s Company (NYSE:BCO) is a
global leader in security-related services that operates two businesses:
Brink’s, Incorporated and Brink’s Home Security. Brink’s,
Incorporated is the world’s premier provider of secure transportation and cash
management services. Brink’s Home Security is one of the largest and
most successful residential alarm companies in North America. For
more information, please visit The Brink’s Company website at www.brinkscompany.com
or call toll free
877-275-7488.
Conference
Call
The
Brink’s Company will host a conference call today, April 30, at 11:00 a.m.
eastern time to discuss this press release. Interested parties can listen to the
conference call by dialing (877) 407-0778 (domestic) or (201) 689-8565
(international), or via live webcast at www.brinkscompany.com.
Please dial in at least five minutes prior to the start of the call. Dial-in
replay will be available through May 14, 2008, by calling (877) 660-6853
(domestic) or (201) 612-7415 (international). The conference account
number is 286 and the conference ID for the replay is 282475. A
webcast replay will also be available at www.brinkscompany.com.
6
THE
BRINK’S COMPANY
and
subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions, except per share amounts)
|
2008
|
2007
|
||||||
|
Revenues
|
$ | 920.6 | 740.5 | |||||
|
Expenses:
|
||||||||
|
Operating
expenses
|
681.7 | 564.7 | ||||||
|
Selling,
general and administrative expenses
|
140.6 | 112.4 | ||||||
|
Total expenses
|
822.3 | 677.1 | ||||||
|
Other
operating income (expense), net
|
(1.0 | ) | 0.9 | |||||
|
Operating profit
|
97.3 | 64.3 | ||||||
|
Interest
expense
|
(2.5 | ) | (2.5 | ) | ||||
|
Interest
and other income, net
|
2.1 | 1.6 | ||||||
|
Income from continuing operations
before income taxes
|
||||||||
|
and minority
interest
|
96.9 | 63.4 | ||||||
|
Provision
for income taxes
|
34.0 | 25.3 | ||||||
|
Minority
interest
|
14.9 | 7.0 | ||||||
|
Income from continuing
operations
|
48.0 | 31.1 | ||||||
|
Income
(loss) from discontinued operations, net of tax
|
2.1 | (2.4 | ) | |||||
|
Net
income
|
$ | 50.1 | 28.7 | |||||
|
Basic
earnings per common share:
|
||||||||
|
Continuing
operations
|
$ | 1.03 | 0.67 | |||||
|
Discontinued
operations
|
0.05 | (0.05 | ) | |||||
|
Net income
|
1.08 | 0.62 | ||||||
|
Diluted
earnings per common share:
|
||||||||
|
Continuing
operations
|
$ | 1.02 | 0.66 | |||||
|
Discontinued
operations
|
0.04 | (0.05 | ) | |||||
|
Net income
|
1.07 | 0.61 | ||||||
|
Weighted-average
common shares outstanding:
|
||||||||
|
Basic
|
46.5 | 46.3 | ||||||
|
Diluted
|
46.9 | 46.9 | ||||||
7
THE
BRINK’S COMPANY
and
subsidiaries
(Unaudited)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
Segment
Information
|
||||||||
|
Revenues:
|
||||||||
|
Brink’s
|
$ | 792.8 | 625.8 | |||||
|
Brinks Home
Security
|
127.8 | 114.7 | ||||||
|
Revenues
|
$ | 920.6 | 740.5 | |||||
|
Operating
profit:
|
||||||||
|
Brink’s
|
$ | 82.0 | 51.0 | |||||
|
Brinks Home
Security
|
32.0 | 28.2 | ||||||
|
Business segments
|
114.0 | 79.2 | ||||||
|
Corporate
|
(16.1 | ) | (11.6 | ) | ||||
|
Former operations
|
(0.6 | ) | (3.3 | ) | ||||
|
Operating profit
|
$ | 97.3 | 64.3 | |||||
|
Supplemental
Financial Information
|
||||||||
|
Brink’s:
|
||||||||
|
Revenues:
|
||||||||
|
North America
|
$ | 230.3 | 211.2 | |||||
|
International
|
562.5 | 414.6 | ||||||
|
Revenues
|
$ | 792.8 | 625.8 | |||||
|
Operating profit:
|
||||||||
|
North America
|
$ | 13.4 | 18.3 | |||||
|
International
|
68.6 | 32.7 | ||||||
|
Operating profit
|
$ | 82.0 | 51.0 | |||||
|
Brink’s
Home Security:
|
||||||||
|
Revenues
|
$ | 127.8 | 114.7 | |||||
|
Operating profit:
|
||||||||
|
Recurring
services
|
$ | 56.8 | 50.8 | |||||
|
Investment in new
subscribers
|
(24.8 | ) | (22.6 | ) | ||||
|
Operating profit
|
$ | 32.0 | 28.2 | |||||
|
Monthly recurring revenues
(a)
|
38.3 | 34.2 | ||||||
|
Annualized disconnect
rate
|
6.1 | % | 6.1 | % | ||||
|
Number of subscribers (in
thousands):
|
||||||||
|
Beginning of
period
|
1,223.9 | 1,124.9 | ||||||
|
Installations
|
44.6 | 45.8 | ||||||
|
Disconnects
|
(18.9 | ) | (17.5 | ) | ||||
|
End of period
|
1,249.6 | 1,153.2 | ||||||
|
Average number of
subscribers
|
1,236.4 | 1,138.1 | ||||||
|
(a)
|
see
“Non-GAAP Reconciliations”
below.
|
8
THE
BRINK’S COMPANY
and
subsidiaries
Supplemental
Financial Information (continued)
(Unaudited)
COSTS
OF FORMER OPERATIONS INCLUDED IN CONTINUING OPERATIONS
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
Company-sponsored
postretirement benefits other
|
||||||||
|
than pensions
|
$ | 0.3 | 1.5 | |||||
|
Black
lung
|
0.9 | 0.9 | ||||||
|
Pension
|
(1.8 | ) | (0.1 | ) | ||||
|
Administrative,
legal and other expenses, net
|
1.2 | 1.0 | ||||||
|
Costs
of former operations
|
$ | 0.6 | 3.3 | |||||
|
|
INCOME
(LOSS) FROM DISCONTINUED OPERATIONS
|
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
Results
of Brink’s United Kingdom domestic cash handling
|
||||||||
|
operations
|
$ | - | (2.5 | ) | ||||
|
Adjustments
to contingent liabilities of former operations
|
2.9 | 0.4 | ||||||
|
Income
(loss) from discontinued operations before
|
||||||||
|
income taxes
|
2.9 | (2.1 | ) | |||||
|
Provision
for income taxes
|
0.8 | 0.3 | ||||||
|
Income
(loss) from discontinued operations
|
$ | 2.1 | (2.4 | ) | ||||
9
THE
BRINK’S COMPANY
and
subsidiaries
Supplemental
Financial Information (continued)
(Unaudited)
SELECTED
CASH FLOW INFORMATION
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
Depreciation
and amortization:
|
||||||||
|
Brink’s
|
$ | 29.7 | 24.7 | |||||
|
Brink’s Home
Security
|
20.6 | 18.5 | ||||||
|
Corporate
|
0.1 | 0.2 | ||||||
|
Depreciation and
amortization
|
$ | 50.4 | 43.4 | |||||
|
Capital
expenditures:
|
||||||||
|
Brink’s
|
$ | 31.5 | 26.2 | |||||
|
Brink’s Home
Security:
|
||||||||
|
Security systems
|
43.2 | 41.1 | ||||||
|
Other
|
2.6 | 2.3 | ||||||
|
Corporate
|
- | 0.1 | ||||||
|
Capital
expenditures
|
$ | 77.3 | 69.7 | |||||
|
Other
Brink’s Home Security cash flow information:
|
||||||||
|
Impairment charges from
subscriber disconnects
|
$ | 11.9 | 11.2 | |||||
|
Amortization of deferred
revenue
|
(8.6 | ) | (8.0 | ) | ||||
|
Deferral of subscriber
acquisition costs (current year payments)
|
(6.3 | ) | (5.8 | ) | ||||
|
Deferral of revenue from new
subscribers (current year receipts)
|
12.0 | 12.1 | ||||||
10
THE
BRINK’S COMPANY
and
subsidiaries
NON-GAAP
RECONCILIATIONS
(Unaudited)
Monthly
Recurring Revenues
A
reconciliation of monthly recurring revenues to reported Brink’s Home Security
revenues follows:
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
March:
|
||||||||
|
Monthly
recurring revenues (“MRR”) (a)
|
$ | 38.3 | 34.2 | |||||
|
Amounts excluded from
MRR:
|
||||||||
|
Amortization of deferred
revenue
|
2.9 | 2.7 | ||||||
|
Other revenues
(b)
|
1.6 | 1.7 | ||||||
|
Revenues on a GAAP
basis
|
$ | 42.8 | 38.6 | |||||
|
Revenues
(GAAP basis):
|
||||||||
|
March
|
$ | 42.8 | 38.6 | |||||
|
January –
February
|
85.0 | 76.1 | ||||||
|
January – March
|
$ | 127.8 | 114.7 | |||||
|
(a)
|
MRR
is calculated based on the number of subscribers at period end multiplied
by the average fee per subscriber received in the last month of the period
for contracted monitoring and maintenance
services.
|
|
(b)
|
Revenues
that are not pursuant to monthly contractual
billings.
|
The
company uses MRR as one factor in the evaluation of BHS’ performance and
believes the presentation of MRR is useful to investors because the measure is
widely used in the industry to assess the amount of recurring revenues from
subscriber fees that a monitored security business produces. This
supplemental non-GAAP information should be reviewed in conjunction with the
company’s consolidated statements of operations.
|
Net
Debt (Cash) reconciled to GAAP measures
|
||||||||
|
March
31,
|
December
31,
|
|||||||
|
(In
millions)
|
2008
|
2007
|
||||||
|
Short-term
debt
|
$ | 17.4 | 12.4 | |||||
|
Long-term
debt
|
162.2 | 100.2 | ||||||
|
Debt
|
179.6 | 112.6 | ||||||
|
Less
cash and cash equivalents
|
(207.2 | ) | (196.4 | ) | ||||
|
Net Debt (Cash)
|
$ | (27.6 | ) | (83.8 | ) | |||
Net
Debt (Cash) is utilized by management as a measure of the company’s financial
leverage and the company believes that investors also may find Net Debt (Cash)
to be helpful in evaluating the financial leverage of the
company. This supplemental non-GAAP information should be reviewed in
conjunction with the company’s consolidated balance sheets in the company’s
report on Form 10-Q for the period ended March 31, 2008.
11
THE
BRINK’S COMPANY
and
subsidiaries
NON-GAAP
RECONCILIATIONS (continued)
(Unaudited)
Brink’s,
Incorporated Organic Revenue Growth
|
Three
Months Ended
|
%
change
|
|||||||
|
(In
millions)
|
March
31,
|
from
prior period
|
||||||
|
2006
revenues
|
$ | 548.4 | 10 | |||||
|
Effects
on revenue of:
|
||||||||
|
Organic Revenue
Growth
|
47.7 | 9 | ||||||
|
Acquisitions and dispositions,
net
|
6.3 | 1 | ||||||
|
Changes in currency exchange
rates
|
23.4 | 4 | ||||||
|
2007
revenues
|
625.8 | 14 | ||||||
|
Effects
on revenue of:
|
||||||||
|
Organic Revenue
Growth
|
95.9 | 16 | ||||||
|
Acquisitions and dispositions,
net
|
7.7 | 1 | ||||||
|
Changes in currency exchange
rates
|
63.4 | 10 | ||||||
|
2008
revenues
|
$ | 792.8 | 27 | |||||
The
supplemental Brink’s, Incorporated Organic Revenue Growth information presented
above is non-GAAP financial information that management uses to evaluate results
of existing operations without the effects of acquisitions, dispositions and
currency exchange rates. The company believes that this information
may be helpful to investors in understanding the performance of the company’s
operations. The limitation of this measure is that the effects of
acquisitions, dispositions and changes in values of foreign currencies cannot be
completely separated from changes in prices (which include the effects of
inflation) and volume of a unit’s base business. This supplemental
non-GAAP information does not affect net income or any other reported
amounts. This supplemental non-GAAP information should be reviewed in
conjunction with the company’s consolidated statements of
operations.
# #
#
12