Brink's (BCO) Misses Q1 EPS by 34c; Not Providing Guidance

Brink's (NYSE: BCO) reported Q1 EPS of $0.36, $0.34 worse than the analyst estimate of $0.70. Revenue for the quarter came in at $873 million versus the consensus estimate of $913.08 million.

Doug Pertz, president and chief executive officer, said: “The COVID-19 pandemic has made these very trying and uncertain times for everyone, as the world unites against this health and economic crisis. Given the uncertainties related to the pandemic, we are focused on three priorities-- protecting our employees and providing essential services to our customers, preserving cash and maximizing profits, and positioning Brink’s to emerge from this crisis stronger than it has ever been.

“The pandemic had a substantial impact on first-quarter results, first affecting our operations in Asia, and then in early March moving sequentially through Europe, North America and South America. Results were also affected significantly by unfavorable currency translation, which also began to have a material impact in early March driven, we believe, by a temporary flight from risk in key developing countries such as Mexico and Brazil.

“As we address the challenges of the pandemic, our confidence in the future is supported by our strong balance sheet, ample liquidity, and the decisive actions our global team is taking to revamp our cost structure to align with an expected near-term revenue decline of approximately 25 percent. In the second quarter, we expect to generate adjusted EBITDA of at least $45 million and positive operating cash flow for the year. We believe the second quarter will be the low point for 2020 and, as additional cost actions take hold, we expect margin improvement in the third and fourth quarters.

“Given the uncertainty regarding the impact of the pandemic on our customers’ operations, which currently includes shutdowns in more than 50 countries, we don’t believe that it is possible to provide guidance within a meaningful range. However, we expect to see revenue growth return as our customers-- most of which are large, stable and resilient businesses-- begin to resume operations, leading to an acceleration of earnings growth in the second half of the year. Fortunately, we have very limited exposure to dine-in restaurants and other small businesses that have been significantly affected by this pandemic and high exposure to essential services, which comprise approximately 44 percent of our retail customer base in the U.S. In addition to the substantial cost reduction actions we are taking, we are also reducing our planned cash capital expenditures by 50 percent to support achieving our target of positive free cash flow for the year.

“As we proactively address the issues related to this pandemic, we are continuing to complete the acquisition and integration of the G4S operations, which provide a new platform for accelerated growth. We have already begun to achieve the cost synergies related to the operations that have been completed to date. We are also moving quickly to introduce our new Strategy 2.0 tech-enabled cash management services that offer enhanced safety, ease-of-use and higher value-- attributes that we believe will be in even greater demand in the post-pandemic economy.

“Finally, I want to express my support and sympathy to those, both within and outside of Brink’s, who have been affected by this terrible virus. I also offer my sincere gratitude to all of our front-line employees for their dedication to ensuring that the essential services we provide remain available to our customers around the world. Together with our global operating managers, I am confident that Brink’s will emerge from this crisis as a stronger company with substantial revenue and earnings growth opportunities.”

For earnings history and earnings-related data on Brink's (BCO) click here.

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