- Total Revenues are $526 Million, Up 15%
- Operating Income is $102 Million
- Net Income is $0.27 per Diluted Share
BOSTON, Oct. 27 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated
(NYSE: IRM), the world's trusted partner for records management and data
protection services, today announced its financial results for the quarter
ended September 30, 2005, reporting higher revenues, operating income and
OIBDA. Net income for the quarter was $0.27 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended
September 30, 2005, grew to $526 million, an increase of 15% compared to the
quarter ended September 30, 2004. For the quarter, storage revenues grew 12%
and service revenues grew 18% compared to the same period in 2004. Storage
revenues, which are considered a key performance indicator for the records
management and data protection services industry, are largely recurring since
customers typically retain their records for many years. This marks the 67th
consecutive quarter for which the Company has reported increased storage
revenues.
For the third quarter of 2005, the storage and service revenue internal
growth rates were 9% and 12%, respectively, yielding a total internal revenue
growth rate of 10%. The total core storage and services revenue internal
growth rate was 9% for the quarter. A major data restoration project
completed by the digital services business unit added approximately 2% to
total internal growth for the quarter.
Richard Reese, the Company's Chairman and CEO, stated, "The third quarter
was another great quarter for Iron Mountain characterized by strong internal
revenue growth and operating margins. Storage internal growth remained at the
top end of our 8% to 9% range and service revenue growth, bolstered by a
significant digital data restoration project, was supported by solid growth
rates in our core businesses. We also announced our entry into the
Asia/Pacific region with our agreement to acquire the Australia and New
Zealand operations of Pickfords Records Management. This is an important step
in our strategy as we expand our geographic footprint to provide consistent,
high-quality service to our customers on a global basis."
Operating income before depreciation and amortization ("OIBDA") was $148
million, or 28.1% of revenues, for the quarter ended September 30, 2005,
compared to $127 million, or 27.7% of revenues, for the quarter ended
September 30, 2004. See Appendix A at the end of this press release for a
discussion of OIBDA and the required reconciliation to the appropriate GAAP
measures.
Operating income for the third quarter of 2005 was $102 million, or 19% of
revenues, compared to $85 million, or 19% of revenues, for the same period in
2004. Net income for the quarter was $36 million, or $0.27 per diluted share,
up 97% compared to $18 million, or $0.14 per diluted share, for the same
period in 2004.
Included in net income for the third quarter of 2005 is $7 million, or
$0.03 per diluted share, of other income, net comprised primarily of foreign
currency related net gains due to the strengthening of the Canadian Dollar and
the Euro since June 30, 2005. The comparable number for the third quarter of
2004 is $3 million, or $0.01 per diluted share, of other income, net comprised
almost entirely of foreign currency related net gains.
For the nine months ended September 30, 2005, the Company reported total
consolidated revenues of $1.54 billion, an increase of 15%, with storage
revenues growing at 14% and service revenues growing at 17% compared to the
prior year. For the first nine months of the year, storage and service
revenue internal growth rates were 9% and 7%, respectively, yielding a total
internal revenue growth rate of 8%.
OIBDA was $425 million, or 27.6% of revenues, for the nine months ended
September 30, 2005, compared to $378 million, or 28.2% of revenues, for the
nine months ended September 30, 2004.
Operating income for the first nine months of 2005 was $290 million, or
19% of revenues, compared to $258 million, or 19% of revenues, for 2004. Net
income was $85 million, or $0.64 per diluted share, for the first nine months
of 2005, compared to $64 million, or $0.49 per diluted share, for the
comparable period in 2004. All per share amounts have been adjusted to reflect
the three-for-two stock split, effected in the form of a dividend, paid on
June 30, 2004.
Included in net income for the nine months ended September 30, 2005, is $3
million, or $0.01 per diluted share, of other expense, net comprised almost
exclusively of foreign currency related net losses, due primarily to the
weakening of the British Pound Sterling and the Euro offset by the
strengthening of the Canadian Dollar. Included in net income for the nine
months ended September 30, 2004, is $4 million, or $0.02 per diluted share, of
other expense, net comprised primarily of $2 million of foreign currency
related net losses, due primarily to the weakening of the euro and $2 million
of charges for the early extinguishment of debt related to the Company's 2004
refinancing activities.
In line with its strategy, Iron Mountain made selected acquisitions,
opportunistically buying attractive businesses that provide a strong platform
for future growth by expanding the Company's geographic footprint and
information management product offerings and enhancing its existing
operations. In 2005, the Company has completed 12 acquisitions, including
eight shredding businesses and two European records management businesses, for
approximately $51 million in cash and the purchase of minority interests in
three of our Latin American subsidiaries for total consideration of
approximately $20 million in cash.
On October 17, 2005, the Company announced that it had signed a definitive
agreement to acquire the Australian and New Zealand operations of Pickfords
Records Management ("PRM") for cash consideration of approximately A$115
million (US$87 million). The transaction is subject to customary closing
conditions and regulatory approvals and is expected to be completed by year
end.
PRM, a leading records management company based in Melbourne, Australia,
serves a customer base of more than 3,000 customers in a variety of sectors
including finance, healthcare, and federal and state government. With 30
facilities located in all of Australia's capital cities (Adelaide, Brisbane,
Canberra, Darwin, Hobart, Melbourne, Perth and Sydney) and all the major
business centers in New Zealand (Auckland, Wellington, Hamilton and
Christchurch), PRM has a truly national footprint in both countries. The
company's portfolio of services includes records storage and management,
secure shredding, imaging and business process outsourcing.
Financial Performance Outlook
The following statements are based on current expectations and do not
include the potential impact of any future acquisitions. These statements are
forward-looking, and actual results may differ materially. Please refer to
the cautionary language included in this press release when considering this
information. The Company undertakes no obligation to update this information
(dollars in millions):
Full Year Ending December 31, 2005
Quarter Ending
December 31, 2005 Previous Current
Low High Low High Low High
Revenues $512 $522 $2,020 $2,045 $2,052 $2,062
Operating Income (1) 94 99 360 375 384 389
Depreciation & Amortization ~48 180 185 ~183
Capital Expenditures 250 275 250 275
(1) Includes $5 million of expected gains from real estate dispositions
in Q4/2005.
Iron Mountain's conference call to discuss the third quarter 2005
financial results will be held today at 11:00 a.m. Eastern Time. In order to
further enhance the overall quality of its investor communications, the
Company will simulcast the conference call on its website at
http://www.ironmountain.com, the content of which is not part of this earnings
release. A slide presentation providing summary financial and statistical
information that will be discussed on the conference call will also be posted
to the website and available for real-time viewing. The slide presentation
and replays of the conference call will be available on the website for future
reference.
About Iron Mountain
Iron Mountain Incorporated is the world's trusted partner for outsourced
records management and data protection services. Founded in 1951, the Company
has grown to service more than 235,000 customer accounts throughout the United
States, Canada, Europe, Latin America and the Pacific Rim. Iron Mountain
offers records management services for both physical and digital media,
disaster recovery support services, and consulting - services that help
businesses save money and manage risks associated with legal and regulatory
compliance, protection of vital information, and business continuity
challenges. For more information, visit http://www.ironmountain.com.
Certain Important Factors
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and federal
securities laws, and is subject to the safe-harbor created by such Act.
Forward-looking statements include our fourth quarter and full year 2005
financial performance outlook and statements regarding our goals, beliefs,
future growth strategies, objectives, plans or current expectations. These
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results to be materially different from those
contemplated in the forward-looking statements. Such factors include, but are
not limited to: (i) changes in customer preferences and demand for the
Company's services; (ii) changes in the price for the Company's services
relative to the cost of providing such services; (iii) in the various digital
businesses in which the Company is engaged, capital and technical requirements
will be beyond the Company's means, markets for the Company's services will be
less robust than anticipated, or competition will be more intense than
anticipated; (iv) the Company's ability or inability to complete acquisitions
on satisfactory terms and to integrate acquired companies efficiently; (v) the
cost and availability of financing for contemplated growth; (vi) business
partners upon which the Company depends for technical assistance or management
and acquisition expertise outside the United States will not perform as
anticipated; (vii) changes in the political and economic environments in the
countries in which the Company's international subsidiaries operate; and
(viii) other trends in competitive or economic conditions affecting Iron
Mountain's financial condition or results of operations not presently
contemplated. Iron Mountain undertakes no obligation to release publicly the
result of any revision to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
NOTE: Condensed Consolidated Financial Statements of Iron Mountain
Incorporated follow.
Iron Mountain Incorporated
Condensed Consolidated Statements of Operations
(Amounts in Thousands except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
Revenues:
Storage $263,867 $296,784 $768,232 $873,805
Service and Storage
Material Sales 195,463 229,688 570,430 665,995
Total Revenues 459,330 526,472 1,338,662 1,539,800
Operating Expenses:
Cost of Sales
(Excluding Depreciation) 209,797 237,414 608,934 696,130
Selling, General and
Administrative 122,508 141,442 353,456 418,095
Depreciation and
Amortization 42,269 45,698 119,912 134,989
(Gain) Loss on Disposal /
Writedown of Property,
Plant and Equipment, Net (246) (259) (1,260) 606
Total Operating Expenses 374,328 424,295 1,081,042 1,249,820
Operating Income 85,002 102,177 257,620 289,980
Interest Expense, Net 54,313 44,308 140,431 137,336
Other (Income) Expense, Net (2,979) (6,542) 4,236 3,067
Income Before Provision \
for Income Taxes and
Minority Interest 33,668 64,411 112,953 149,577
Provision for Income Taxes 14,293 27,637 46,668 63,739
Minority Interest in Earnings
of Subsidiaries 925 397 1,981 1,102
Net Income $18,450 $36,377 $64,304 $84,736
Net Income Per Share - Basic $ 0.14 $ 0.28 $ 0.50 $ 0.65
Net Income Per Share - Diluted $ 0.14 $ 0.27 $ 0.49 $ 0.64
Weighted Average Common Shares
Outstanding - Basic 129,288 130,862 128,934 130,439
Weighted Average Common Shares
Outstanding - Diluted 131,366 132,283 131,056 131,757
Operating Income before
Depreciation and
Amortization $127,271 $147,875 $377,532 $424,969
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, September 30,
2004 2005
ASSETS
Current Assets:
Cash and Cash Equivalents $31,942 $43,990
Accounts Receivable (less allowances of
$13,886 and $12,862, respectively) 354,434 394,599
Other Current Assets 114,778 107,263
Total Current Assets 501,154 545,852
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 2,266,839 2,436,077
Less: Accumulated Depreciation (617,043) (733,600)
Property, Plant and Equipment, net 1,649,796 1,702,477
Other Assets:
Goodwill, net 2,040,217 2,050,575
Other Non-current Assets, net 251,220 253,586
Total Other Assets 2,291,437 2,304,161
Total Assets $4,442,387 $4,552,490
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $39,435 $26,303
Other Current Liabilities 476,028 501,538
Total Current Liabilities 515,463 527,841
Long-term Debt, Net of Current Portion 2,438,587 2,382,139
Other Long-term Liabilities 256,724 309,119
Minority Interests 13,045 5,969
Stockholders' Equity 1,218,568 1,327,422
Total Liabilities and Stockholders' Equity $4,442,387 $4,552,490
APPENDIX A
Operating Income Before Depreciation and Amortization
The Company uses Operating Income Before Depreciation and Amortization
("OIBDA"), an integral part of its planning and reporting systems, to evaluate
the operating performance of the consolidated business. As such, the Company
believes OIBDA provides current and potential investors with relevant and
useful information regarding its ability to grow revenues faster than
operating expenses. Additionally, the Company uses multiples of current and
projected OIBDA in conjunction with its discounted cash flow models to
determine its overall enterprise valuation and to evaluate acquisition
targets. OIBDA is not a measurement of financial performance under accounting
principles generally accepted in the United States, or GAAP, and should not be
considered as a substitute for operating or net income or cash flows from
operating activities (as determined in accordance with GAAP).
Following is a reconciliation of operating income before depreciation and
amortization to operating income and net income (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
OIBDA (Operating Income
Before Depreciation and
Amortization) (1) $127 $148 $378 $425
Less: Depreciation and
Amortization 42 46 120 135
Operating Income (1) $85 $102 $258 $290
Less: Interest Expense, net 54 44 140 137
Other (Income) Expense, net (3) (7) 4 3
Provision for Income Taxes 14 28 47 64
Minority Interest 1 -- 2 1
Net Income (1) $18 $36 $64 $85
Major Components of Other
(Income) Expense, net:
Foreign Exchange Effects $(3) $(6) $2 $4
Debt Extinguishment Charges $-- $-- $2 $--
(1) Columns may not foot due to rounding.
Contact: Stephen P. Golden
Director of Investor Relations
617-535-4799
SOURCE Iron Mountain Incorporated
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Related links:
http://www.ironmountain.com
CONTACT:
Stephen P. Golden, Director of Investor
Relations, Iron Mountain Incorporated, +1-617-535-4799
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