Exhibit 99.1
Iron Mountain Incorporated Reports Second Quarter 2004 Financial Results
* Total Revenues are $445 Million, Up 24%
* Operating Income is $87 Million; Up 27%
* Net Income is $0.17 per Diluted Share
* Shredding Line Expanded in Canada with Acquisition of Proshred Security
International, Inc.
BOSTON, July 29 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated
(NYSE: IRM), the leader in records and information management services, today
reported higher revenues and operating income for the quarter ended June 30,
2004. Net income for the quarter was $0.17 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended June 30,
2004 grew to $445 million, an increase of 24% compared with the quarter ended
June 30, 2003. For the quarter, storage revenues grew 22% and service
revenues grew 26% compared to the prior year. Storage revenues, which are
considered a key performance indicator for the records and information
management services industry, are largely recurring since customers typically
retain their records for many years. This marks the 62nd consecutive quarter
for which the Company has reported increased storage revenues.
For the second quarter of 2004, the storage and service revenue internal
growth rates were 9% and 4%, respectively, yielding a total internal revenue
growth rate of 7%. The storage internal growth rate continued to trend up as
strong growth in the Company's digital services and certain international
markets enhanced the solid growth rates posted by the core North American
business units. Core services, led by Secure Shredding, grew at a rate of 7%
compared to 2003 and complementary services were roughly flat to last year's
levels due primarily to the absence of large special projects and lower
product sales.
Richard Reese, the Company's Chairman and CEO, stated, "The business is
generally performing in line with our expectations. As with any portfolio of
businesses and services, some performed better than others and we continue to
be pleased with our newer investments in growth opportunities across
geographies, such as Europe and Latin America, and service lines, such as
secure shredding and digital services, all of which performed very well in the
quarter."
Operating income before depreciation and amortization ("OIBDA") was $127
million, or 28.6% of revenues, for the quarter ended June 30, 2004 compared to
$99 million, or 27.7% of revenues, for the quarter ended June 30, 2003. 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 second quarter of 2004 was $87 million, or 20% of
revenues, compared to $69 million, or 19% of revenues, for the same period in
2003. Net income for the quarter was $23 million, or $0.17 per diluted share,
compared to $20 million, or $0.15 per diluted share, for the same period in
2003. 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 second quarter of 2004 is $5 million, or
$0.02 per diluted share, of other expense, net comprised primarily of foreign
currency related net losses due to the weakening of the Canadian Dollar
against the U.S. Dollar in the second quarter. The net effect of the exchange
rate fluctuations relative to the British Pound Sterling was less than $0.5
million due primarily to the implementation of our hedging strategy relative
to that currency. Included in net income for the second quarter of 2003 is $5
million, or $0.02 per diluted share, of other income, net comprised primarily
of a $19 million foreign currency gain, due primarily to the strengthening of
the Canadian Dollar partially offset by $14 million of charges for the early
extinguishment of debt related to the Company's 2003 refinancing activities.
For the six months ended June 30, 2004, the Company reported total
consolidated revenues of $879 million, an increase of 24% with storage
revenues growing at 22% and service revenues growing at 25% compared to the
prior year. For the six-month period, storage and service revenue internal
growth rates were 8% and 5%, respectively, yielding a total internal revenue
growth rate of 7%.
OIBDA was $250 million, or 28.5% of revenues, for the six months ended
June 30, 2004 compared to $202 million, or 28.4% of revenues, for the six
months ended June 30, 2003.
Operating income for the first six months of 2004 was $173 million, or 20%
of revenues, compared to $141 million, or 20% of revenues, for the same period
in 2003. Net income was $46 million, or $0.35 per diluted share, for the
first six months of 2004, compared to $41 million, or $0.32 per diluted share,
for the same period in 2003.
Included in net income for the first six months of 2004 is $7 million, or
$0.03 per diluted share, of other expense, net comprised of a $5 million
foreign currency loss, due primarily to the weakening of the Canadian Dollar,
and $2 million of charges for the early extinguishment of debt related to the
Company's 2004 refinancing activities. Included in net income for the first
six months of 2003 is $8 million, or $0.04 per diluted share, of other income,
net comprised primarily of a $24 million foreign currency gain, due primarily
to the strengthening of the Canadian Dollar and the British pound sterling
partially offset by $16 million of charges for the early extinguishment of
debt related to the Company's 2003 refinancing activities.
Iron Mountain continued its acquisition strategy, opportunistically buying
attractive businesses expanding its geographical footprint and records
management product offerings and enhancing its existing operations providing
the platform for future growth. Since the end of the first quarter of 2004,
the Company has completed 13 acquisitions for total consideration of
approximately $106 million. These acquisitions have expanded the Company's
operations in important international markets (Germany, Chile), strengthened
the Company's secure shredding business in Canada, California, Texas and
Oregon, and opened secondary markets in Tennessee, Maryland and North
Carolina. The Company also broadened its intellectual property protection
business with the addition of domain name management services.
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, 2004
Quarter Ending
September 30, 2004 Previous Current
Low High Low High Low High
Revenues $450 $458 $ 1,750 $1,785 $1,765 $1,800
Operating Income 87 91 333 352 335 354
Depreciation &
Amortization ~41 162 158 163 159
Capital Expenditures 210 240 210 240
Iron Mountain's conference call to discuss the second quarter 2004
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. 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 and information management services. Founded in 1951, the Company has
grown to service more than 200,000 customer accounts throughout the United
States, Canada, Europe and Latin America. 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 is
subject to the safe-harbor created by such Act. Forward-looking statements
include our third quarter and full year 2004 financial performance outlook and
statements regarding our goals, beliefs, 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) the cost and availability of financing for contemplated
growth; (iv) the Company's ability or inability to complete acquisitions on
satisfactory terms and to integrate acquired companies efficiently; (v) 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; (vi) the possibility that 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 Six Months Ended
June 30, June 30,
2003 2004 2003 2004
Revenues:
Storage $208,969 $255,770 $411,800 $504,365
Service and Storage
Material Sales 150,301 189,640 299,281 374,967
Total Revenues 359,270 445,410 711,081 879,332
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) 162,032 200,827 322,183 399,137
Selling, General
and Administrative 96,134 118,488 187,290 230,948
Depreciation and
Amortization 30,765 40,363 60,714 77,643
Loss (Gain) on
Disposal / Writedown
of Property, Plant and
Equipment, Net 1,688 (1,134) 16 (1,014)
Total Operating
Expenses 290,619 358,544 570,203 706,714
Operating Income 68,651 86,866 140,878 172,618
Interest Expense, Net 36,397 42,659 71,962 86,118
Other (income)
Expense, Net (4,722) 4,945 (7,982) 7,215
Income Before
Provision for Income
Taxes and Minority
Interest 36,976 39,262 76,898 79,285
Provision for
Income Taxes 15,285 15,825 32,623 32,375
Minority Interest in
Earnings of
Subsidiaries 1,558 580 2,858 1,056
Net Income $20,133 $22,857 $41,417 $45,854
Net Income Per
Share - Basic $ 0.16 $ 0.18 $ 0.32 $ 0.36
Net Income Per
Share - Diluted $ 0.15 $ 0.17 $ 0.32 $ 0.35
Weighted Average
Common Shares
Outstanding - Basic 127,851 128,956 127,748 128,757
Weighted Average
Common Shares
Outstanding - Diluted 130,190 131,036 130,008 130,901
Operating Income
before Depreciation
and Amortization $99,416 $127,229 $201,592 $250,261
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, June 30,
2003 2004
ASSETS
Current Assets:
Cash and Cash Equivalents $74,683 $40,006
Accounts Receivable (less allowances of
$20,922 and $16,082, respectively) 279,800 322,444
Other Current Assets 117,100 98,937
Total Current Assets 471,583 461,387
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 1,950,893 2,071,260
Less: Accumulated Depreciation (458,626) (528,370)
Property, Plant and Equipment, net 1,492,267 1,542,890
Other Assets:
Goodwill, net 1,776,279 1,864,946
Other Non-current Assets, net 151,970 197,664
Total Other Assets 1,928,249 2,062,610
Total Assets $3,892,099 $4,066,887
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $115,781 $18,381
Other Current Liabilities 468,964 432,141
Total Current Liabilities 584,745 450,522
Long-term Debt, Net of Current Portion 1,974,147 2,260,473
Other Long-term Liabilities 191,308 212,684
Minority Interests 75,785 11,940
Shareholders' Equity 1,066,114 1,131,268
Total Liabilities and Shareholders' Equity $3,892,099 $4,066,887
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 Six Months Ended
June 30, June 30,
2003 2004 2003 2004
OIBDA (Operating
Income Before
Depreciation and
Amortization) (1) $99 $127 $202 $250
Less: Depreciation
and Amortization 30 40 61 78
Operating Income (1) $69 $87 $141 $172
Less: Interest Expense,
net 37 43 72 86
Other (Income) Expense,
net (5) 5 (8) 7
Provision for Income Taxes 15 16 33 32
Minority Interest 2 -- 3 1
Net Income (1) $20 $23 $41 $46
Major Components of Other
(Income) Expense, net:
Foreign Exchange
Effects $(19) $5 $(24) $5
Debt Extinguishment
Charges $14 $-- $16 $2
(1) Includes $2 million of losses and $1 million of gains on Disposal /
Write-down of Property, Plant and Equipment, net for the quarters
ended June 30, 2003 and 2004, respectively and a $1 million gain on
Disposal / Write-down of Property, Plant and Equipment, net for the
six months ended June 30, 2004.
Contact: Stephen P. Golden
Director of Investor Relations
(617) 535-4799
SOURCE Iron Mountain Incorporated
-0- 07/29/2004
/CONTACT: Stephen P. Golden, Director of Investor Relations of Iron
Mountain Incorporated, +1-617-535-4799/
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/Web site: http://www.ironmountain.com/
(IRM)
CO: Iron Mountain Incorporated
ST: Massachusetts
IN: CPR
SU: ERN CCA MAV