Brink's execs tout Fourth quarter results

RICHMOND, Va.-- During a Feb. 1 conference call, chief executive officer Michael Dan called The Brink's Company's fourth quarter results, which showed profits up 43 percent at Brink's Home Security, a "strong finish to a good year," and promised to "extend our well established track record in creating substantial value for all of our shareholders." In the course of the 45-minute call, Dan and chief financial officer Bob Ritter fielded far-ranging questions about the results and projections, and potential acquisitions in the commercial security space, but quelled questions about some hedge funds' [notably, MMI and Pirate Capital] persistent demands that Brink's put itself up for sale. Early in his prepared remarks, Dan said, "The board and management are actively engaged in evaluating proposals and when appropriate, we will disclose any decisions and actions ... It would be imprudent to discuss the proposals at this point." "Substantially higher revenue and profits at both of the company's operating units" accounted for impressive fourth quarter results, which included income jumping to $33.1 million (71 cents per share) compared to $6.2 million (11 cents per share) one year ago. Revenue from continuing operations was up 14 percent over the year, to $755.9 million from $663.1 in Q4 2005. In addition, operating profit from continuing operations doubled from $24.1 million in 2005 to $62.5 million in Q4 2006. However, while the results were impressive, and the company is "financially strong and focused" going into 2007, Dan and Ritter sought to temper expectations for the next year by pointing out that the prior year's fourth quarter results were particularly weak. Still, in 2007, they expect the armored trucking division to sustain annual operating margin above seven percent and Brink's Home Security to post another year of 10 percent, or better, growth in revenue, profits and subscribers, and improved installation growth rate. The commercial security division accounted for seven percent of installations in the fourth quarter of 2006. Dan said Brink's would like to see that increase to "around 10 percent by the end of 2007." Asked about acquisition prospects, Dan noted, "there's not a lot to pick from" among large players, but that there are several regional players out there. "We're in the deal stream," he said, but "we want to find the one that will not dilute the ability to maintain return on capital that we have at Brink's Home Security today."