The Brink’s Company Reports Second Quarter Results
The Brink’s Company reported income from continuing operations of $8.0 million, or $0.15 per share for the quarter ended June 30, 2003. For the same period one year ago, income from continuing operations was $19.1 million, or $0.36 per share.
Revenue in the second quarter of 2003 increased 6 percent over last year’s second quarter to $975.2 million. All business units achieved higher revenues, with Brink’s Inc. and BAX Global benefiting from stronger European currencies relative to the U.S. dollar.
Operating profit in the quarter just ended was $17.3 million after deducting $17.2 million of costs associated with retained obligations of the former coal operations. Operating profit of $35.6 million in last year’s second quarter did not include expenses related to the former coal operations for 2002 since such costs had been recorded previously within discontinued operations. In the current period, increased year-over-year operating profits at Brink’s Inc., Brink’s Home Security and other operations were offset by lower operating profit at BAX Global, which was affected by poor economic conditions in the United States and Europe.
The company recorded a loss from discontinued operations in the second quarter of 2003 of $1.9 million (after tax), or $(0.04) per share, stemming from a revised estimate of the value of a contingent liability of the former coal operations. As a result, net income for the quarter ended June 30, 2003 was $6.1 million, or $0.11 per share, compared with $19.1 million, or $0.36 per share in the prior year period.
For the six months ended June 30, 2003, revenues were $1.9 billion compared with $1.8 billion in the last six months of 2002. Net income for the first half of 2003 was $4.4 million, or $0.08 per share, compared with $27.2 million, or $0.51 per diluted share a year ago.
“Despite challenging economic conditions, we were able to achieve continued strong performance in our Brink’s Home Security business and improve performance in international operations at Brink’s Inc.”, said Michael T. Dan, president and CEO of The Brink’s Co. “However, results at BAX Global continued to reflect the impact of lower domestic overnight heavy freight volume,” he added.
Second Quarter Business Unit Performance
Brink’s, Inc. (“Brink’s”) : Worldwide revenue of $410.7 million reflected an increase of 4 percent during the second quarter as compared with the prior year’s period. International revenue this quarter was up 6 percent over the level of the second quarter a year ago, primarily due to the effects of the strengthening of European currencies compared to the U.S. dollar. This positive effect on revenue was partially offset by the effect of a stronger U.S. dollar relative to South American currencies. North American revenue increased 2 percent over the second quarter of 2002.
Brink’s operating profit in the quarter ended June 30, 2003 increased 9 percent to $21.5 million from last year’s second quarter, reflecting improved international operations. International performance in the second quarter of 2003 benefited from cost realignment in European operations as well as improved results in Asia/Pacific and South America. Operating profit in North American declined $2.9 million versus the prior year as increased profits in cash logistics were more than offset by the impact of higher employee benefit costs in the U.S. and costs associated with the closure of the Darien, Connecticut office. Costs associated with the Darien office closure and the realigning of resources in European operations approximated $2 million in the quarter.
Brink’s Home Security: Revenue increased 9 percent to $76.5 million in the second quarter as compared to the same period last year due primarily to growth in the subscriber base. Operating profits of $17.7 million in the second quarter were 13 percent higher than those recorded in the prior year’s quarter. An increase in operating profit from recurring services resulted primarily from the growth of the subscriber base, a lower disconnect rate and more efficient service operations.
The annualized disconnect rate for the current year’s quarter improved to 7.2 percent compared to 7.5 percent a year earlier. The company added more than 28,000 new subscribers during the quarter, a 10 percent increase over the number of new subscribers in the second quarter last year. At June 30, 2003, Brink’s Home Security had more than 795,000 subscribers.
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