The Brink's Company Reports Strong Fourth Quarter and Full Year 2004 Results

Business Wire, Feb 8, 2005

RICHMOND, Va -- BAX Global Posts Solid Results as Growth in Volumes Continues Brink's, Incorporated Achieves Robust Margins; Brink's Home Security Maintains Strong Growth and Performance

The Brink's Company (NYSE: BCO) today reported after-tax income from continuing operations for the fourth quarter of 2004 of $30.9 million or $0.55 per diluted share compared to $4.3 million or $0.08 per diluted share in the prior-year period. Fourth quarter 2003 results included a deferred tax valuation allowance of $22.0 million, partially offset by a $7.0 million after-tax gain on the sale of the Company's former investment in an Australian gold and nickel company.

Revenue in the fourth quarter of 2004 was up 17% over last year's fourth quarter to $1.3 billion, reflecting substantial increases from each of the Company's business units. Revenues at Brink's, Incorporated and BAX Global also benefited from stronger European currencies relative to the U.S. dollar. The effects of the weaker U.S. dollar contributed about three percentage points of the increase in revenues.

The Company reported operating profit of $59.7 million for the quarter ended December 31, 2004, a decrease from $64.2 million in the year earlier period which benefited from a $10.4 million pre-tax gain on the sale of the equity interest in the Australian gold and nickel company. Results for 2004 included higher corporate expenses in comparison to a year ago largely due to continuing efforts related to Sarbanes-Oxley Section 404. Operating profit performance improved at both Brink's Home Security and BAX Global in the current quarter versus a year earlier. Operating profit for the recent quarter also benefited from a reduction in costs from former coal operations.

Net income for the fourth quarter of 2004 was $32.1 million, or $0.57 per diluted share, as income from discontinued operations was $1.2 million, or $0.02 per diluted share; a one-time gain from a royalty payment more than offset higher costs from annual revisions to retained liabilities related to former coal operations. In the fourth quarter a year ago, the Company reported a net loss of $25.0 million, or $0.47 per diluted share, which included a $29.3 million, or $0.55 per diluted share, loss from discontinued operations primarily associated with annual revisions to estimated retained liabilities related to former coal operations.

Updated information on the status of multi-employer pension plans related to former coal operations is not yet available. As a result, the Company has been unable to determine if an adjustment to its estimated withdrawal liability should be recorded within discontinued operations. Although the preparation of this information is not within the Company's control, management believes that the information will be released in time to be reflected in the financial statements in the Form 10-K filing for 2004. Any such adjustment could have a material impact on the financial information contained in this release. However, the Company believes it is unlikely that any such change will result in an increase to the Company's estimate of the obligation.

Full-Year 2004 Results

For the year ended December 31, 2004, revenues increased 18% to $4.7 billion compared to the prior year, and operating profit for 2004 was $189.9 million, almost double the $99.8 million earned in 2003, reflecting substantial improvement in all three business units. Income from continuing operations improved to $98.4 million, or $1.78 per diluted share, for 2004 compared with $18.2 million, or $0.34 per share, a year ago. Net income for the full year of 2004 was $114.6 million, or $2.07 per diluted share, compared with $29.4 million, or $0.55 per diluted share, a year ago.

Fourth Quarter Business Unit Performance

Brink's, Incorporated ("Brink's")

Brink's revenue increased 12% to $515.9 million in the fourth quarter of 2004 from $459.7 million in the prior-year period. International revenue in the quarter increased 19% over the year-ago quarter due to stronger performance in certain European countries - most notably France and Greece - combined with the net benefit of currency translation. Revenues were also up in South America due largely to business growth. North American revenue increased 2% over the fourth quarter of 2003, mainly due to improved Canadian operations and the positive impact of foreign currency exchange rates on such operations.

Brink's operating profit in the quarter ended December 31, 2004 of $41.9 million was below the strong $44.5 million recorded in the fourth quarter of 2003. Increased operating profit from International operations was more than offset by softer performance in North America. Operating profit in North America declined $2.6 million year-over-year due to higher costs in Brink's operations in the United States.

Brink's Home Security

Revenue at Brink's Home Security increased 11% to $90.1 million in the fourth quarter of 2004, as compared to the same period last year, due primarily to growth in the subscriber base. Operating profit in the fourth quarter was a record $21.4 million, 14% higher than in the prior year's fourth quarter. An increase in operating profit from recurring services resulted primarily from the growth of the subscriber base.