Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Stephen P. Golden
Director of Investor Relations
(617) 535-4799
Iron Mountain Incorporated Reports First Quarter 2003 Financial Results
o Total Revenues are $352 Million, Up 11%
o Income From Continuing Operations Before Extraordinary Items
is $0.25 per Diluted Share
o Operating Income is $72 Million, Up 26%
o EBITDA Reaches $104 Million, Up 30%
Boston, MA - April 30, 2003 - Iron Mountain Incorporated (NYSE: IRM), the leader
in records and information management services, today reported higher revenues,
EBITDA and earnings for the quarter ended March 31, 2003. The Company also
reported that it generated $72 million of operating income, an increase of 26%
over the first quarter of 2002.
Iron Mountain's total consolidated revenues for the quarter ended March 31, 2003
grew to $352 million, an increase of 11% compared with the quarter ended March
31, 2002. Storage revenues increased to $203 million for the first quarter from
$183 million for the same period in 2002. 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 57th consecutive quarter for which Iron Mountain
has reported increased storage revenues. For the quarter ended March 31, 2003,
total internal revenue growth was 8%.
Richard Reese, the Company's Chairman and CEO, stated, "The Company posted solid
results for the first quarter--revenues were within expectations and our margins
were exceptionally strong. Storage growth rates remained stable however, service
revenue growth rates, particularly for complementary services were down from
last year's levels. As planned, we are increasing our investment in our sales
and sales support resources, particularly in the digital services and enterprise
solutions and services arenas to take advantage of emerging market
opportunities."
EBITDA (earnings from continuing operations before interest, taxes, depreciation
and amortization) was $104 million, or 29.6% of revenues, for the quarter ended
March 31, 2003 compared to $80 million, or 25.2% of revenues, for the quarter
ended March 31, 2002. Operating income for the first quarter of 2003 was $72
million, or 20.5% of revenues, compared to $57 million, or 18.0% of revenues,
for the same period in 2002.
Iron Mountain believes that EBITDA is useful to investors because it is an
important financial measure used in evaluating the Company's performance, as
EBITDA is an internally generated source of funds for investment in continued
growth and for servicing indebtedness. Internally, Iron Mountain uses EBITDA as
the basis for evaluating the performance of and allocating resources to its
operating segments. Externally, holders of the Company's publicly issued debt
use EBITDA and EBITDA-based calculations as important criteria for evaluating
the Company and, as a result, all of its bond indentures and covenants include
EBITDA and EBITDA-based calculations as primary measures of financial
performance. However, EBITDA is subject to foreign currency fluctuations and,
under new accounting rules, debt extinguishment charges. As a result, operating
income, which is less affected by these items, is emerging as an important
measure of the Company's financial performance.
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Iron Mountain Reports First Quarter 2003 Financial Results / Page 2
Below is a reconciliation of Operating Income to EBITDA:
Quarter Ended
Reconciliation of Operating Income to EBITDA March 31,
--------------------------------
2002 2003
--------------- --------------
Operating Income $ 57,184 $ 72,227
Add: Depreciation and Amortization 25,156 29,949
--------- ---------
82,340 102,176
Less: Other (Income) Expense, net 1,312 (3,260)
Minority Interests in Earnings of Subsidiaries 957 1,300
--------- ---------
EBITDA (Earnings before Interest, Taxes, Depreciation and
Amortization)
$ 80,071 $ 104,136
========= =========
Digital Operating Losses Included Above $ (1,817) $ (4,764)
Other (Income) Expense, net for the first quarter of 2003 is comprised of a $5
million foreign currency gain, due primarily to the strengthening of the
Canadian dollar against the U.S. dollar, partially offset by a $2 million charge
for the early extinguishment of debt related to the redemption of the Company's
9-1/8% notes. The Company expects to record a charge of approximately $14
million in the second quarter ending June 30, 2003, for the early extinguishment
of debt related to the redemption of the Company's 8-3/4% notes. Other (Income)
Expense, net for the first quarter of 2002 is comprised primarily of a $1
million charge for the early extinguishment of debt related to the refinancing
of the Company's revolving credit facility.
Income from continuing operations before extraordinary items was $21 million, or
$0.25 per diluted share, for the first quarter of 2003, compared to $13 million,
or $0.15 per diluted share, for the same period in 2002. Net Income for the
first quarter of 2003 was $21 million, or $0.25 per diluted share, compared to
$6 million, or $0.07 per diluted share, for the same period in 2002.
During the first quarter of 2003, the Company completed the redemption of its
9-1/8% notes by retiring the $23 million of aggregate principal amount
outstanding at year-end. The Company also exchanged $31 million of its 7-3/4%
notes for $30 million of its outstanding 8-3/4% notes. In April 2003, the
Company sold $300 million of its 7-3/4% notes at 104.0% of par, which implies an
effective yield to worst of 7.066%. The net proceeds to the Company of $307
million will be used to fund the Company's offer to purchase and consent
solicitation for its 8-3/4% notes, or to otherwise redeem the 8-3/4% notes, and
for general corporate purposes, including the repayment of borrowings under its
revolving credit agreement, the possible repayment of other indebtedness and
possible future acquisitions.
Iron Mountain completed 3 acquisitions since the end of 2002 serving markets in
France, Texas and Louisiana. These acquisitions were announced in the Company's
fourth quarter 2002 earnings release and were included in the 2003 guidance at
that time.
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Iron Mountain Reports First Quarter 2003 Financial Results / Page 3
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.
The Company is providing the following financial guidance for the quarter ending
June 30, 2003 and the full year ending December 31, 2003 (dollars in millions):
Full Year Ending December 31, 2003
-----------------------------------------
Quarter Ending
June 30, 2003 Previous Current
----------------- ---------------- ------------------
Low High Low High Low High
------- ------- ------- ------- -------- -------
Revenues $355 $365 $ 1,440 $1,480 $ 1,440 $1,480
Operating Income 68 73 270 290 270 290
Depreciation & Amortization 30 127 123
EBITDA 83 88 390 405 376 392
Capital Expenditures 190 215 190 215
Internal Growth 9% 11% 9% 11%
The Company's second quarter and full year 2003 guidance with respect to EBITDA
includes a charge for the early extinguishment of debt related to the redemption
of its 8-3/4% notes of approximately $14 million. In addition, the full year
2003 guidance includes the $2 million charge for the early extinguishment of
debt related to the redemption of the Company's 9-1/8% notes in the first
quarter of 2003. In addition, the Company has not included any foreign currency
effects, actual or forecasted, or additional debt extinguishment charges for the
second quarter or full-year 2003. Minority interest is assumed to be $5 million
for the full year 2003. Following is a reconciliation of operating income to
EBITDA with respect to the aforementioned guidance (dollars in millions):
Full Year Ending December 31, 2003
-------------------------------------------
Reconciliation of Operating Income to EBITDA Quarter Ending
June 30, 2003 Previous Current
-------------------- ----------------- ------------------
Low High Low High Low High
---------- -------- -------- -------- ------- ------
Operating Income $ 68 $ 73 $ 270 $ 290 $ 270 $ 290
Add: Depreciation and Amortization 30 30 125 120 127 123
---- ---- ----- ----- ----- -----
98 103 395 410 397 413
Less: Other Expense (1) 14 14 -- -- 16 16
Minority Interest in Earnings of
Subsidiaries 1 1 5 5 5 5
---- ---- ----- ----- ----- -----
EBITDA $ 83 $ 88 $ 390 $ 405 $ 376 $ 392
==== ==== ===== ===== ===== =====
- ------------------
<FN>
(1) Other Expense includes charges related to the early extinguishment of
debt of $14 million and $16 million for the second quarter and full
year 2003, respectively related to the Company's first and second
quarter 2003 refinancing events.
</FN>
Iron Mountain's conference call to discuss the first quarter 2003 financial
results will be held today at 11:00 am 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 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.
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Iron Mountain Reports First Quarter 2003 Financial Results / Page 4
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 150,000 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
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
second quarter and full year 2003 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 on which the Company is
embarking, 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 Reports First Quarter 2003 Financial Results / Page 5
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
----------------------
2002 2003
--------- ---------
REVENUES:
Storage $ 183,436 $ 202,831
Service and Storage Material Sales 133,762 148,980
--------- ---------
Total Revenues 317,198 351,811
OPERATING EXPENSES:
Cost of Sales (Excluding Depreciation) 152,446 160,151
Selling, General and Administrative 82,194 91,156
Depreciation and Amortization 25,156 29,949
Merger-Related Expenses 300 --
Gain on Disposal/Writedown of Property, Plant and Equipment, Net (82) (1,672)
--------- ---------
Total Operating Expenses 260,014 279,584
--------- ---------
OPERATING INCOME 57,184 72,227
INTEREST EXPENSE, NET 32,880 35,565
OTHER EXPENSE (INCOME), NET 1,312 (3,260)
--------- ---------
Income from Continuing Operations Before Provision for Income Taxes and Minority Interest 22,992 39,922
PROVISION FOR INCOME TAXES 9,517 17,338
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES 957 1,300
--------- ---------
Income from Continuing Operations Before Cumulative Effect of Change in Accounting Principle 12,518 21,284
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (NET OF MINORITY INTEREST) (1) (6,396) --
--------- ---------
Net Income $ 6,122 $ 21,284
========= =========
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE PER SHARE - BASIC $ 0.15 $ 0.25
========= =========
INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE PER SHARE - DILUTED $ 0.15 $ 0.25
========= =========
NET INCOME PER SHARE - BASIC $ 0.07 $ 0.25
========= =========
NET INCOME PER SHARE - DILUTED $ 0.07 $ 0.25
========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 84,372 85,097
========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 86,002 86,551
========= =========
EBITDA $ 80,071 $ 104,136
========= =========
<FN>
(1) Represents the non-cash charge related to the impairment of goodwill
associated with the Company's investment in South America due primarily
to the deterioration of the economy and the devaluation of the currency
in Argentina.
</FN>
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Iron Mountain Reports First Quarter 2003 Financial Results / Page 6
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
(Unaudited)
December 31, March 31,
2002 2003
------------ -----------
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 56,292 $ 13,581
Accounts Receivable (less allowances of $20,274
and $20,316, respectively) 225,416 248,973
Other Current Assets 85,332 76,697
----------- -----------
Total Current Assets 367,040 339,251
----------- -----------
PROPERTY, PLANT AND EQUIPMENT:
Property, Plant and Equipment at Cost 1,577,588 1,643,511
Less: Accumulated Depreciation (338,400) (367,717)
----------- -----------
Property, Plant and Equipment, net 1,239,188 1,275,794
----------- -----------
OTHER ASSETS:
Goodwill, net 1,544,974 1,572,663
Other Non-current Assets, net 79,453 81,162
----------- -----------
Total Other Assets 1,624,427 1,653,825
----------- -----------
Total Assets $ 3,230,655 $ 3,268,870
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Portion of Long-term Debt $ 69,732 $ 43,858
Other Current Liabilities 358,230 353,083
----------- -----------
Total Current Liabilities 427,962 396,941
LONG-TERM DEBT, NET OF CURRENT PORTION 1,662,365 1,679,861
OTHER LONG-TERM LIABILITIES 133,335 148,015
MINORITY INTERESTS 62,132 67,641
SHAREHOLDERS' EQUITY 944,861 976,412
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,230,655 $ 3,268,870
=========== ===========
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