Exhibit 99.1
Iron Mountain Incorporated Reports Third Quarter 2004 Financial Results
* Total Revenues are $459 Million, Up 20%
* Operating Income is $85 Million; Up 10%
* Net Income is $0.14 per Diluted Share
* Shredding, Digital Services Contributing to Revenue Growth
* Acquisition of Connected Corporation Expected to Close in Early
November
BOSTON, Oct. 28 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated
(NYSE: IRM), the leader in records and information management services, today
reported higher revenues and operating income for the third quarter ended
September 30, 2004. Net income for the quarter was $0.14 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended
September 30, 2004 grew to $459 million, an increase of 20% compared with the
quarter ended September 30, 2003. For the quarter, storage revenues grew 18%
and service revenues grew 23% 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 63rd
consecutive quarter for which the Company has reported increased storage
revenues.
For the third quarter of 2004, the storage and service revenue internal
growth rates were 8% and 5%, respectively, yielding a total internal revenue
growth rate of 7%.
Richard Reese, the Company's Chairman and CEO, stated, "Iron Mountain is
making important strides strategically in what has been a very active 2004.
We have become the largest North American provider of integrated shredding
services, we have consolidated ownership of important international
businesses, and we are starting to see good progress in our digital services
business. Operationally, our businesses performed as we expected this
quarter, with the exception of our U.S. paper-based Records Management
business, where margins were lower than anticipated. We have taken steps
intended to return these margins to their normal levels. Our growing
investment in our sales and marketing organization, while dampening near-term
margins, is beginning to pay dividends."
Operating income before depreciation and amortization ("OIBDA") was $127
million, or 27.7% of revenues, for the quarter ended September 30, 2004
compared to $110 million, or 28.9% of revenues, for the quarter ended
September 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 third quarter of 2004 was $85 million, or 19% of
revenues, compared to $77 million, or 20% of revenues, for the same period in
2003. Net income for the quarter was $18 million, or $0.14 per diluted share,
an increase of 25% from $15 million, or $0.11 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 third quarter of 2004 is $3 million, or
$0.01 per diluted share, of other income, net comprised primarily of foreign
currency related net gains due to the strengthening of the Canadian Dollar,
which were partially offset by net losses due to the weakening of the Euro.
The net effect of the exchange rate fluctuations relative to the British Pound
Sterling was less than $0.2 million due primarily to the implementation of the
Company's hedging strategy relative to that currency. Included in net income
for the third quarter of 2003 is $10 million, or $0.05 per diluted share, of
other expense, net comprised primarily of $5 million of foreign currency
related net losses, due primarily to the weakening of the Canadian Dollar and
$5 million of charges for the early extinguishment of debt related to the
Company's 2003 refinancing activities.
For the nine months ended September 30, 2004, the Company reported total
consolidated revenues of $1.34 billion, an increase of 22%, with storage
revenues growing at 21% and service revenues growing at 25% compared to the
prior year. For the nine-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 $377 million, or 28.2% of revenues, for the nine months ended
September 30, 2004 compared to $312 million, or 28.6% of revenues, for the
nine months ended September 30, 2003.
Operating income for the first nine months of 2004 was $258 million, or
19% of revenues, compared to $218 million, or 20% of revenues, for the same
period in 2003. Net income was $64 million, or $0.49 per diluted share, for
the first nine months of 2004, compared to $56 million, or $0.43 per diluted
share, for the same period in 2003.
Included in net income for the first nine months of 2004 is $4 million, or
$0.02 per diluted share, of other expense, net comprised of a $2 million
foreign currency related net losses, due primarily to the weakening of the
British Pound Sterling, 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 nine months of 2003 is $2 million, or $0.01 per diluted
share, of other expense, net comprised primarily of a $19 million foreign
currency related net gains, due primarily to the strengthening of the Canadian
Dollar offset by $21 million of charges for the early extinguishment of debt
related to the Company's 2003 refinancing activities.
In line with its strategy, Iron Mountain continued to make selected
acquisitions, opportunistically buying attractive businesses that provide a
strong platform for future growth by expanding the Company's geographical
footprint and information management product offerings and enhancing its
existing operations. Since the end of July, the Company has completed six
acquisitions for total consideration of approximately $19 million in cash.
These acquisitions have expanded the Company's operations in important
international markets (Eastern Europe, Brazil), strengthened the Company's
secure shredding business in California and Virginia and enhanced its records
management presence in California.
In addition, the Company announced on October 12, 2004, the signing of a
definitive agreement to acquire Framingham, MA-based Connected Corporation in
a cash transaction valued at approximately $117 million. The acquisition
builds on Iron Mountain's mission to protect its customers' information and to
protect its customers through compliant information management. Connected
Corporation is a technology and market leader in the protection, archiving and
recovery of distributed data. The transaction is expected to close in early
November.
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
Previous Current
Low High Low High
Revenues $1,765 $1,800 $1,794 $1,804
Operating Income 335 354 335 341
Depreciation & Amortization 163 159 ~163
Capital Expenditures 210 240 210 240
Iron Mountain's conference call to discuss the third 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, 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 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 federal
securities laws, and is subject to the safe-harbor created by such Act.
Forward-looking statements include our fourth quarter and full year 2004
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) 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 Nine Months Ended
September 30, September 30,
2003 2004 2003 2004
REVENUES:
Storage $222,973 $263,867 $634,773 $768,232
Service and Storage Material
Sales 158,785 195,463 458,066 570,430
Total Revenues 381,758 459,330 1,092,839 1,338,662
OPERATING EXPENSES:
Cost of Sales (Excluding
Depreciation) 171,355 209,797 493,538 608,934
Selling, General and
Administrative 98,087 122,508 285,377 353,456
Depreciation and Amortization 33,197 42,269 93,911 119,912
Loss (Gain) on Disposal /
Writedown of Property, Plant
and Equipment, Net 1,870 (246) 1,886 (1,260)
Total Operating Expenses 304,509 374,328 874,712 1,081,042
OPERATING INCOME 77,249 85,002 218,127 257,620
INTEREST EXPENSE, NET 38,790 54,313 110,752 140,431
OTHER EXPENSE (INCOME), NET 10,343 (2,979) 2,361 4,236
Income Before Provision for Income
Taxes and Minority Interest 28,116 33,668 105,014 112,953
PROVISION FOR INCOME TAXES 12,012 14,293 44,635 46,668
MINORITY INTEREST IN EARNINGS OF
SUBSIDIARIES 1,310 925 4,168 1,981
Net Income $14,794 $18,450 $56,211 $64,304
NET INCOME PER SHARE - BASIC $0.12 $0.14 $0.44 $0.50
NET INCOME PER SHARE - DILUTED $0.11 $0.14 $0.43 $0.49
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC 127,955 129,288 127,817 128,934
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 130,089 131,366 130,035 131,056
Operating Income before
Depreciation and Amortization $110,446 $127,271 $312,038 $377,532
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
(Unaudited)
December 31, September 30,
2003 2004
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $74,683 $44,428
Accounts Receivable (less allowances of
$20,922 and $14,010, respectively) 279,800 343,941
Other Current Assets 117,100 91,259
Total Current Assets 471,583 479,628
PROPERTY, PLANT AND EQUIPMENT:
Property, Plant and Equipment at Cost 1,950,893 2,143,420
Less: Accumulated Depreciation (458,626) (567,974)
Property, Plant and Equipment, net 1,492,267 1,575,446
OTHER ASSETS:
Goodwill, net 1,776,279 1,943,622
Other Non-current Assets, net 151,970 207,532
Total Other Assets 1,928,249 2,151,154
Total Assets $3,892,099 $4,206,228
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Portion of Long-term Debt $115,781 $17,923
Other Current Liabilities 468,964 452,454
Total Current Liabilities 584,745 470,377
LONG-TERM DEBT, NET OF CURRENT PORTION 1,974,147 2,330,155
OTHER LONG-TERM LIABILITIES 191,308 228,848
MINORITY INTERESTS 75,785 11,735
SHAREHOLDERS' EQUITY 1,066,114 1,165,113
Total Liabilities and Shareholders'
Equity $3,892,099 $4,206,228
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 Nine Months
Ended Ended
September 30, September 30,
2003 2004 2003 2004
OIBDA (Operating Income Before
Depreciation and Amortization) (1) $110 $127 $312 $378
Less: Depreciation and Amortization 33 42 94 120
Operating Income (1) $77 $85 $218 $258
Less: Interest Expense, net 39 54 111 140
Other (Income) Expense, net 10 (3) 2 4
Provision for Income Taxes 12 14 45 47
Minority Interest 1 1 4 2
Net Income (1) (2) $15 $18 $56 $64
Major Components of Other (Income)
Expense, net:
Foreign Exchange Effects $5 $(3) $(19) $2
Debt Extinguishment Charges $5 $-- $21 $2
(1) Includes $2 million and $1 million of losses on Disposal / Write-down
of Property, Plant and Equipment, net for the quarters ended September
30, 2003 and 2004, respectively and $2 million of losses and
$1 million of gains on Disposal / Write-down of Property, Plant and
Equipment, net for the nine months ended September 30, 2003 and 2004,
respectively.
(2) Columns may not foot due to rounding.
Contact: Stephen P. Golden
Director of Investor Relations
(617) 535-4799
SOURCE Iron Mountain Incorporated
-0- 10/28/2004
/CONTACT: Stephen P. Golden, Director of Investor Relations of Iron
Mountain Incorporated, +1-617-535-4799/
/Photo: http://www.newscom.com/cgi-bin/prnh/20030505/IRMLOGO
AP Archive: http://photoarchive.ap.org
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/Web site: http://www.ironmountain.com /
(IRM)
CO: Iron Mountain Incorporated
ST: Massachusetts
IN: FIN
SU: ERN ERP CCA