BRINKS CO

Previous wording

•North America – operations in the U.S. and Canada, including the Brink’s Global Services ("BGS") line of business,

Current wording

•North America – operations in the U.S. and Canada, including the BGS line of business,

Previous wording

We provide an analysis of our operations below on both a U.S. generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as they allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 35–36 and are reconciled to comparable GAAP measures on pages 41–43.

Current wording

We provide an analysis of our operations below on both a U.S. generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as they allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 41–43 and are reconciled to comparable GAAP measures on pages 48–50.

Previous wording

(b)Non-GAAP results are reconciled to the applicable GAAP results on pages 41–43.

Current wording

(b)Non-GAAP results are reconciled to the applicable GAAP results on pages 48–50 and 51.

Previous wording

Consolidated Revenues Revenues increased $50.7 million due to organic increases in Latin America ($117.1 million), Europe ($17.1 million), Rest of World ($7.9 million), and North America ($3.5 million) and the favorable impact of acquisitions ($1.9 million), partially offset by the unfavorable impact of currency exchange rates ($96.8 million). The unfavorable currency impact was driven primarily by the Argentine peso. Revenues increased 12% on an organic basis primarily due to inflation-based price increases and organic growth in AMS and DRS revenue. See above for our definition of “organic growth.”

Current wording

Consolidated Revenues Revenues increased $36.9 million due to organic increases in Latin America ($126.7 million), Europe ($25.6 million), North America ($10.4 million), and Rest of World ($4.0 million) and the favorable impact of acquisitions ($6.7 million), partially offset by the unfavorable impact of currency exchange rates ($136.5 million). The unfavorable currency impact was driven primarily by the Argentine peso. Revenues increased 14% on an organic basis primarily due to inflation-based price increases and organic growth in AMS and DRS revenue. See above for our definition of “organic growth.”

Previous wording

Consolidated Costs and Expenses Cost of revenues increased 1% to $927.2 million primarily due to higher revenue, partially offset by the impact of currency exchange rates and lower costs related to restructuring actions. Selling, general and administrative costs increased 13% to $200.6 million primarily due to organic increases in labor costs, partially offset by lower acquisition and restructuring related costs and the impact of currency exchange rates.

Current wording

Consolidated Costs and Expenses Cost of revenues decreased 1% to $937.8 million primarily due to the impact of currency exchange rates and the prior year impact of a large loss event in our BGS line of business, partially offset by the impact of higher revenue. Selling, general and administrative costs increased 14% to $194.3 million primarily due to organic increases in labor costs and costs related to transformation initiatives, partially offset by lower acquisition and restructuring related costs and the impact of currency exchange rates.

Previous wording

Consolidated Operating Profit Operating profit increased $41.1 million due mainly to:

Current wording

Consolidated Operating Profit Operating profit increased $10.4 million due mainly to:

Previous wording

•lower costs incurred related to reorganization and restructuring ($12.8 million),

Current wording

•lower costs incurred related to reorganization and restructuring ($12.7 million), and

Previous wording

•lower costs incurred related to business acquisitions and dispositions ($8.4 million), including the impact of acquisition-related charges and intangible asset amortization, included in "Other items not allocated to segments", and

Current wording

•lower costs incurred related to business acquisitions and dispositions ($6.8 million), including the impact of acquisition-related charges and intangible asset amortization, included in "Other items not allocated to segments",

Previous wording

•unfavorable changes in currency exchange rates ($20.3 million), driven by the Argentine peso and

Current wording

•unfavorable changes in currency exchange rates ($64.1 million), driven by the Argentine peso and

Previous wording

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $35.0 million to $49.3 million due to the increase in operating profit mentioned above, higher interest and other nonoperating income ($8.6 million) and lower noncontrolling interest ($0.4 million), partially offset by higher interest expense ($9.2 million) and higher income tax expense ($5.9 million). Earnings per share from continuing operations was $1.09, up from $0.30 in the first quarter of 2023.

Current wording

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $49.1 million to $95.6 million due to the increase in operating profit mentioned above and higher interest and other nonoperating income ($17.0 million), partially offset by higher interest expense ($14.6 million), higher income tax expense ($4.6 million), and higher noncontrolling interest ($0.2 million). Earnings per share from continuing operations was $2.12, up from $0.98 in the first six months of 2023.

Previous wording

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $17.6 million due mainly to:

Current wording

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $23.8 million due mainly to:

Previous wording

Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $8.7 million to $68.9 million due to the operating profit increase mentioned above, higher interest and other nonoperating income ($8.3 million), and lower noncontrolling interest ($0.4 million), partially offset by higher interest expense ($9.4 million) and higher income tax expense ($8.2 million). Earnings per share from continuing operations was $1.52, up from $1.27 in the first quarter of 2023.

Current wording

Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $15.2 million to $75.4 million due to the operating profit increase mentioned above and higher interest and other nonoperating income ($7.7 million), partially offset by higher income tax expense ($10.0 million), higher interest expense ($5.7 million), and higher noncontrolling interest ($0.6 million). Earnings per share from continuing operations was $1.67, up from $1.27 in the second quarter of 2023.

Previous wording

Revenues and Operating Profit by Segment: First Quarter 2024 versus First Quarter 2023

Current wording

Revenues and Operating Profit by Segment: Second Quarter 2024 versus Second Quarter 2023

Previous wording

(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.

Current wording

(a)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.

Previous wording

(e)See pages 35–36 for more information

Current wording

(e)See pages 41-43 for more information

Previous wording

Analysis of Segment Results: First Quarter 2024 versus First Quarter 2023

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Analysis of Segment Results: Second Quarter 2024 versus Second Quarter 2023

Previous wording

Revenues increased 1% ($3.6 million) primarily due to a 1% organic increase ($3.5 million). Organic revenue increased primarily due to price increases and growth in AMS and DRS revenue in the U.S., partially offset by volume reductions due to the rationalization of our customer portfolio to optimize profitability and lower BGS revenue. Operating profit increased $9.8 million due to a 25% organic increase ($9.8 million) primarily driven by cost productivity improvements in labor and other areas, including realizing benefits from transformation initiatives in the U.S., as well as lower security losses and increased revenue.

Current wording

Revenues increased 2% ($18.2 million) primarily due to a 2% organic increase ($13.9 million) and the impact of acquisitions ($4.8 million). Organic revenue increased primarily due to price increases and growth in AMS and DRS revenue in the U.S., partially offset by volume reductions due to the rationalization of our customer portfolio to optimize profitability and lower BGS revenue. Operating profit increased $24.0 million due to a 31% organic increase ($23.5 million) and the impact of acquisitions ($0.5 million). The organic increase was primarily driven by cost productivity improvements in labor and other areas, including realizing benefits from transformation initiatives in the U.S., as well as lower security losses and increased revenue.

Previous wording

Revenues increased 6% ($19.2 million) primarily due to a 37% organic increase ($117.1 million), partially offset by the unfavorable impact of currency exchange rates ($97.9 million), primarily from the Argentine peso partially offset by favorable impact from the Mexican peso. The organic increase was primarily driven by inflation-based price increases across the segment with a majority of the impact from Argentina, as well as growth in AMS and DRS revenue. Operating profit was down 5% ($3.6 million) primarily due to the unfavorable impact of currency exchange rates ($31.1 million), mostly offset by a 41% organic increase ($27.5 million). The organic increase was driven by higher revenue which outpaced the impact of labor and other cost increases.

Current wording

Revenues increased 3% ($17.0 million) due to a 38% organic increase ($243.8 million), mostly offset by the unfavorable impact of currency exchange rates ($226.8 million), primarily from the Argentine peso partially offset by favorable impact from the Mexican peso. The organic increase was driven by inflation-based price increases across the segment with a majority of the impact from Argentina, as well as growth in AMS and DRS revenue. Operating profit was down 5% ($6.3 million) due to the unfavorable impact of currency exchange rates ($72.0 million), mostly offset by a 50% organic increase ($65.7 million). The organic increase was driven by higher revenue which outpaced the impact of labor and other cost increases.

Previous wording

Revenues increased 8% ($22.7 million) due to a 6% organic increase ($17.1 million), the favorable impact of currency exchange rates ($3.7 million) driven by the euro, and the favorable impact of acquisitions ($1.9 million). The organic increase was primarily due to price increases and the growth of AMS and DRS revenue. Operating profit increased $3.9 million, primarily due to a 15% organic increase ($3.4 million). The organic increase was primarily driven by higher revenue outpacing the impact of labor and other cost increases across the segment, cost productivity, and the mix benefit of higher AMS and DRS revenue.

Current wording

Revenues increased 8% ($46.5 million) due to a 8% organic increase ($42.7 million) and the favorable impact of acquisitions ($3.8 million). The organic increase was primarily due to price increases and the growth of AMS and DRS revenue. Operating profit increased 13% ($6.8 million), primarily due to a 13% organic increase ($6.5 million). The organic increase was primarily driven by higher revenue outpacing the impact of labor and other cost increases across the segment, cost productivity, and the mix benefit of higher AMS and DRS revenue.

Previous wording

Revenues increased 3% ($5.2 million) due to a 4% organic increase ($7.9 million), partially offset by the unfavorable impact of currency exchange rates ($2.7 million). Organic growth in the segment was primarily due to growth in BGS revenue and supplemented by continued growth in DRS and AMS revenue. Operating profit increased $3.8 million primarily due to a 13% organic increase ($4.7 million). The organic increase was primarily due to the impact of labor and other operational cost saving actions throughout the segment as well as the increase in higher-margin BGS revenue.

Current wording

Revenues increased 1% ($5.9 million) due to a 3% organic increase ($11.9 million), partially offset by the unfavorable impact of currency exchange rates ($6.0 million). Organic growth in the segment was primarily due to growth in BGS revenue and supplemented by continued growth in AMS and DRS revenue. Operating profit increased 2% ($1.5 million) due to a 4% organic increase ($3.1 million), partially offset by the unfavorable impact of currency exchange rates ($1.3 million). The organic increase was primarily due the increase in higher-margin revenue.

Previous wording

Corporate expenses for the first three months of 2024 decreased $3.7 million versus the prior year period. This was primarily driven by lower charges related to insurance and security losses ($7.4 million), partially offset by higher net compensation costs ($3.1 million) and higher professional fees ($2.2 million).

Current wording

Corporate expenses for the first six months of 2024 decreased $15.4 million versus the prior year period. This was primarily driven by lower charges related to insurance and security losses ($22.8 million), partially offset by higher net compensation costs ($2.4 million) and higher technology costs ($2.2 million).

Previous wording

In the first quarter of 2023, management completed the review and approval of remaining actions included in the previously announced restructuring program across our global business operations. The actions were taken to enable growth, reduce costs and related infrastructure, and to mitigate the potential impact of external economic conditions. In total, we have recognized $34.2 million in charges under this program, including $1.0 million in the first three months of 2024. We expect total expenses from the program to be between $36 million and $38 million. When completed, the current restructuring actions are expected to reduce our workforce by 3,200 to 3,400 positions and result in annualized cost savings of approximately $60 million.

Current wording

In the first quarter of 2023, management completed the review and approval of remaining actions included in the previously announced restructuring program across our global business operations. The actions were taken to enable growth, reduce costs and related infrastructure, and to mitigate the potential impact of external economic conditions. In total, we have recognized $34.0 million in charges under this program, including $0.8 million in the first six months of 2024. We expect total expenses from the program to be between $36 million and $38 million. When completed, the current restructuring actions are expected to reduce our workforce by 3,200 to 3,400 positions and result in annualized cost savings of approximately $60 million.

Previous wording

Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized net costs of $3.8 million in the first three months of 2023, primarily severance costs. We recognized $0.4 million in net costs in the first three months of 2024. The majority of the costs in both the 2024 and 2023 periods result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic.

Current wording

Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized net costs of $4.1 million in the first six months of 2023, primarily severance costs. We recognized $0.7 million in net costs in the first six months of 2024. The majority of the costs in both the 2024 and 2023 periods result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic.

Previous wording

•Amortization expense for acquisition-related intangible assets was $14.5 million in the first three months of 2024.

Current wording

•Amortization expense for acquisition-related intangible assets was $29.1 million in the first six months of 2024.

Previous wording

•Net charges of $0.5 million were incurred for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

Current wording

•Net charges of $1.2 million were incurred for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

Previous wording

•We recognized $0.7 million in charges in Argentina in the first three months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses. See Note 1 for details.

Current wording

•We recognized $0.5 million in charges in Argentina in the first six months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses. See Note 6 for details.

Previous wording

•We incurred $0.3 million in integration costs in the first three months of 2024.

Current wording

•We incurred $0.4 million in integration costs in the first six months of 2024.

Previous wording

•Transaction costs related to business acquisitions were $0.3 million in the first three months of 2024.

Current wording

•Transaction costs related to business acquisitions were $0.3 million in the first six months of 2024.

Previous wording

•Compensation expense related to the retention of key PAI employees was $0.6 million in the first three months of 2023.

Current wording

•A net credit of $1.3 million related to the reversal of retention liability for key PAI employees was recorded in the first six months of 2024.

Previous wording

•Amortization expense for acquisition-related intangible assets was $14.0 million in the first three months of 2023.

Current wording

•Amortization expense for acquisition-related intangible assets was $28.6 million in the first six months of 2023.

Previous wording

•We recognized $3.3 million in charges in Argentina in the first three months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses.

Current wording

•We recognized $3.3 million in charges in Argentina in the first six months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses.

Previous wording

•We incurred $0.4 million in integration costs, primarily related to PAI, in the first three months of 2023.

Current wording

•We incurred $1.2 million in integration costs, primarily related to PAI, in the first six months of 2023.

Previous wording

•Transaction costs related to business acquisitions were $0.5 million in the first three months of 2023.

Current wording

•Transaction costs related to business acquisitions were $2.4 million in the first six months of 2023.

Previous wording

•We recognized a $2.0 million loss on the disposition of Russia-based operations in the first three months of 2023.

Current wording

•We recognized a $2.0 million loss on the disposition of Russia-based operations in the first six months of 2023.

Previous wording

•Compensation expense related to the retention of key PAI employees was $0.1 million in the first three months of 2024.

Current wording

•Compensation expense related to the retention of key PAI employees was $1.0 million in the first six months of 2023.

Previous wording

Argentina highly inflationary impact Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date to the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In the first three months of 2024, we recognized $1.6 million in pretax charges related to highly inflationary accounting. In the first three months of 2023, we recognized $11.2 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $9.8 million. These amounts are excluded from segment and non-GAAP results.

Current wording

Argentina highly inflationary impact Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date to the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In the first six months of 2024, we recognized $13.0 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $6.4 million. In the first six months of 2023, we recognized $22.2 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $18.2 million. These amounts are excluded from segment and non-GAAP results.

Previous wording

Transformation initiatives During 2023, we initiated a multi-year program intended to accelerate growth and drive margin expansion through transformation of our business model in the U.S., with expectations to then leverage the transformation changes and learnings globally. The program is designed to help us standardize our commercial and operational systems and processes, drive continuous improvement and achieve operational excellence. Accordingly, we incurred $5.5 million of expense in 2023, and an additional $4.8 million in the first three months of 2024. The transformation costs primarily include third party professional services and project management charges and are excluded from segment and non-GAAP results.

Current wording

Transformation initiatives During 2023, we initiated a multi-year program intended to accelerate growth and drive margin expansion through transformation of our business model in the U.S., with expectations to then leverage the transformation changes and learnings globally. The program is designed to help us standardize our commercial and operational systems and processes, drive continuous improvement and achieve operational excellence. Accordingly, we incurred $5.5 million of expense in 2023 and an additional $12.0 million in the first six months of 2024. The transformation costs primarily include third party professional services and project management charges and are excluded from segment and non-GAAP results.

Previous wording

Chile antitrust matter We recognized an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine. In the first three months of 2024, we recognized an additional $0.4 million adjustment and, in the first three months of 2023, an additional $0.2 million adjustment to our estimated loss. The adjustments resulted primarily from changes in currency rates. Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results. See Note 13 for details.

Current wording

Chile antitrust matter We recognized an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine. In the first six months of 2024, we recognized an additional $0.5 million adjustment and, in the first six months of 2023, an additional $0.4 million adjustment to our estimated loss. The adjustments resulted primarily from changes in currency rates. Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results. See Note 14 for details.

Previous wording

At March 31, 2024, Argentina's economy remains highly inflationary for accounting purposes. At March 31, 2024, we had net monetary assets denominated in Argentine pesos of $85.9 million (including cash of $74.5 million) and net nonmonetary assets of $141.4 million (including $99.8 million of goodwill, $2.7 million in equity securities denominated in Argentine pesos and $6.7 million in debt securities denominated in Argentine pesos).

Current wording

At June 30, 2024, Argentina's economy remains highly inflationary for accounting purposes. At June 30, 2024, we had net monetary assets denominated in Argentine pesos of $101.5 million (including cash of $84.5 million) and net nonmonetary assets of $139.9 million (including $99.8 million of goodwill, $2.9 million in equity securities denominated in Argentine pesos and $7.3 million in debt securities denominated in Argentine pesos).

Previous wording

We have previously elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. We did not have any such conversions or conversion losses in the three months ended March 31, 2024 or March 31, 2023.

Current wording

We have previously elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. We did not have any such conversions or conversion losses in the six months ended June 30, 2024 or June 30, 2023.