Iron Mountain Incorporated Reports First Quarter 2007 Financial Results
* Total revenues up 12% to $633 million driven by strong service revenue
growth and the 73rd consecutive quarter of increased storage revenues
* OIBDA is $157 million, or 24.8% of revenues; strong performance supported
by revenue growth and timing and control of expenses
* Operating income is $100 million and net income is up 27% to $35 million
or $0.17 per diluted share
* The Company raises full year guidance
BOSTON, May 2 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated (NYSE:
IRM), the global leader in information protection and storage services, today
announced its financial results for the first quarter ended March 31, 2007,
reporting strong overall revenue performance, solid operating income and net
income for the quarter of $0.17 per diluted share. The Company also announced
the signing of a definitive agreement to acquire ArchivesOne, Inc., a leading
provider of records and information management services in the United States.
Strong revenue performance, supported by solid storage revenue growth and
robust service revenue growth, highlighted Iron Mountain's financial results for
the first quarter of 2007 and was a contributing factor in driving up operating
income before depreciation and amortization ("OIBDA"). Expense control and the
timing of initiative spending were also positive contributors to the Company's
operating performance.
Iron Mountain was very active in the capital markets in early 2007 as the
Company continued the implementation of a multi-phase global treasury program
designed to create financial flexibility, reduce foreign exchange risk and drive
annual cash savings. In late 2006, the Company established an international
treasury center in Switzerland to more effectively and efficiently manage the
financing needs of its international subsidiaries outside of North America,
initially in Europe. This was followed in the first quarter of 2007 by
successful senior subordinated debt offerings in Euros (euro 225 million) and
Canadian Dollars (C$175 million). In April 2007, the Company closed on a $900
million global senior credit facility which consolidated its existing senior
credit facilities in the U.S. and the U.K.
"We are pleased with the performance of the business thus far, as well as
the ultimate potential of the markets we serve," said Richard Reese, Chairman
and CEO. "Our strong balance sheet will allow us to address an expanding set of
growth, productivity and acquisition investment opportunities in the near to
medium term. Capitalizing on these opportunities will enhance our ability to
drive long term, increasingly profitable growth and therefore, shareholder
value."
Iron Mountain's total consolidated revenues for the quarter ended March 31,
2007 grew to $633 million, an increase of 12% compared to the quarter ended
March 31, 2006. For the quarter, storage revenues grew 10% and service revenues
grew 15% compared to the same period in 2006. For the first quarter of 2007, the
storage and service revenue internal growth rates were 9% and 10%, respectively,
yielding a total internal revenue growth rate of 9%.
OIBDA was $157 million, or 24.8% of revenues, for the quarter ended March
31, 2007 compared to $142 million, or 25.2% of revenues, for the quarter ended
March 31, 2006. 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 first quarter of 2007 was $100 million, or 16% of
revenues, compared to $92 million, or 16% of revenues, for the same period in
2006. Net income for the quarter was $35 million, or $0.17 per diluted share,
compared to $27 million, or $0.14 per diluted share, for the same period in
2006. All per share amounts have been adjusted to reflect the three-for-two
stock split effected in the form of a stock dividend on December 29, 2006.
Included in net income for the quarter of 2007 is $8 million, or $0.02 per
diluted share, of other income, net comprised primarily of $9 million of
business interruption insurance recoveries related to the London warehouse fire
of July 2006, offset by $2 million of early debt extinguishment charges related
to our first quarter refinancing activities. Net foreign currency gains for the
three months ended March 31, 2007 were negligible. Included in net income for
the first quarter of 2006, is $3 million, or $0.01 per diluted share, of other
income, net comprised of $1 million of foreign currency related gains and $2
million of other non-operating net gains. The foreign currency related gains
were due primarily to the strengthening of the British Pound Sterling and the
Euro partially offset by a weakening of the Australian Dollar.
Iron Mountain's acquisition strategy focuses on acquiring attractive
businesses that provide a strong platform for future growth by expanding the
Company's geographic footprint and service offerings while enhancing its
existing operations. Since the end of 2006, the Company completed several small
shredding and records management business acquisitions in North America and the
U.K. The Company also signed a definitive agreement to acquire ArchivesOne,
Inc., a leading provider of records and information management services in the
United States and acquired Societa Italiana Archivi s.p.a. in Italy and
Gesellschaft fur beleglose Dokumentenbearbeitung gmbh ("GbD") in Germany. The
ArchivesOne transaction is subject to customary closing conditions and is
expected to be completed in May 2007.
Founded in 1991, ArchivesOne, is a leading records management company based
in Middlebury, Connecticut, that serves a customer base of more than 8,500
customers in a variety of sectors including professional services, healthcare,
legal and finance. With 31 facilities located in 17 major metropolitan markets
in 10 states and the District of Columbia, ArchivesOne will be an important
addition to the Company in the U.S. For nearly 15 years Italiana Archivi has
been providing records management and DMS solutions to government, finance and
other corporate customers throughout Italy. Italiana Archivi gives Iron Mountain
a strong national presence in Italy with operations in five major markets: Rome,
Venice, Milan, Naples and Aosta. Based in Hamburg, Germany, GbD provides
document management solutions specializing in scanning, processing and the
subsequent archiving of corporate documents.
Iron Mountain was advised exclusively by Lehman Brothers Inc. on the
ArchivesOne transaction.
Financial Performance Outlook
The following statements are based on current expectations and do not
include the potential impact of any future acquisitions, except those discussed
above. 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. Except as required by law, the
Company undertakes no obligation to update this information (dollars in
millions):
Full Year Ending December 31, 2007
Quarter Ending
June 30, 2007 Previous Current
Low High Low High Low High
Revenues $647 $662 $2,530 $2,600 $2,600 $2,660
Operating Income 103 110 427 452 434 457
Depreciation &
Amortization ~58 223 228 231 236
Capital Expenditures 390 420 395 425
Internal Revenue
Growth 8% 10% 8% 10%
Iron Mountain's conference call to discuss its first quarter 2007 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 Web site 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 Web site and available for
real-time viewing. The slide presentation and replays of the conference call
will be available on the Web site for future reference.
About Iron Mountain
Iron Mountain Incorporated (NYSE: IRM) helps organizations around the world
reduce the costs and risks associated with information protection and storage.
The Company offers comprehensive records management and data protection
solutions, along with the expertise and experience to address complex
information challenges such as rising storage costs, litigation, regulatory
compliance and disaster recovery. Founded in 1951, Iron Mountain is a trusted
partner to more than 100,000 corporate clients throughout North America, Europe,
Latin America and Asia Pacific. For more information, visit the Company's Web
site at http://www.ironmountain.com.
Forward Looking Statements
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 2007 financial performance outlook and
statements regarding our goals, beliefs, future growth strategies, investments,
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 cost to comply with
current and future legislation or regulation relating to privacy issues; (v) the
impact of litigation that may arise in connection with incidents of inadvertent
disclosures of customers' confidential information; (vi) the Company's ability
or inability to complete acquisitions on satisfactory terms and to integrate
acquired companies efficiently; (vii) the cost and availability of financing for
contemplated growth; (viii) business partners upon which the Company depends for
technical assistance or management and acquisition expertise outside the United
States will not perform as anticipated; (ix) changes in the political and
economic environments in the countries in which the Company's international
subsidiaries operate; (x) other trends in competitive or economic conditions
affecting Iron Mountain's financial condition or results of operations not
presently contemplated; and (xi) other risks described more fully in the
Company's Annual Report on Form 10-K for the year ended December 31, 2006 under
"Item 1A. Risk Factors". Except as required by law, 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.
Investor Relations Contact:
Stephen P. Golden
Director, Investor Relations
sgolden@ironmountain.com
(617) 535-4799
Iron Mountain Incorporated
Condensed Consolidated Statements of Operations
(Amounts in Thousands except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
2006 2007
Revenues:
Storage $319,155 $352,165
Service and Storage Material Sales 244,502 280,347
Total Revenues 563,657 632,512
Operating Expenses:
Cost of Sales (Excluding Depreciation and
Amortization) 262,368 295,005
Selling, General and Administrative 158,843 180,505
Depreciation and Amortization 49,848 57,172
Loss on Disposal / Writedown of Property,
Plant and Equipment, Net 163 37
Total Operating Expenses 471,222 532,719
Operating Income 92,435 99,793
Interest Expense, Net 46,578 50,335
Other Income, Net (2,847) (7,723)
Income Before Provision for Income Taxes and
Minority Interest 48,704 57,181
Provision for Income Taxes 20,971 22,083
Minority Interest in Earnings of Subsidiaries, Net 460 391
Net Income $ 27,273 $ 34,707
Net Income Per Share - Basic $0.14 $0.17
Net Income Per Share - Diluted $0.14 $0.17
Weighted Average Common Shares Outstanding - Basic 197,522 199,230
Weighted Average Common Shares Outstanding - Diluted 199,971 201,416
Operating Income before Depreciation and
Amortization $142,283 $156,965
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, March 31,
2006 2007
ASSETS
Current Assets:
Cash and Cash Equivalents $ 45,369 $ 61,481
Accounts Receivable (less allowances of
$15,157 and $15,106, respectively) 473,366 485,687
Other Current Assets 160,986 120,424
Total Current Assets 679,721 667,592
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 2,965,995 3,051,944
Less: Accumulated Depreciation (950,760) (1,004,328)
Property, Plant and Equipment, net 2,015,235 2,047,616
Other Assets:
Goodwill, net 2,165,129 2,195,256
Other Non-current Assets, net 349,436 359,267
Total Other Assets 2,514,565 2,554,523
Total Assets $5,209,521 $5,269,731
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $ 63,105 $ 99,883
Other Current Liabilities 575,542 565,812
Total Current Liabilities 638,647 665,695
Long-term Debt, Net of Current Portion 2,605,711 2,592,719
Other Long-term Liabilities 406,600 418,305
Minority Interests 5,290 5,503
Stockholders' Equity 1,553,273 1,587,509
Total Liabilities and Stockholders' Equity $5,209,521 $5,269,731
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
March 31,
2006 2007
OIBDA (Operating Income Before Depreciation and
Amortization) (1) $142 $157
Less: Depreciation and Amortization 50 57
Operating Income (1) $ 92 $100
Less: Interest Expense, net 47 50
Other (Income), net (3) (8)
Provision for Income Taxes 21 22
Minority Interest -- --
Net Income (1) $ 27 $ 35
Major Components of Other (Income) Expense, net:
Foreign Currency Exchange Effects: $ (1) $ --
Debt Extinguishment Charges, net: $ -- $ 2
Insurance related gains $ -- $ (9)
(1) Columns may not foot due to rounding.
Free Cash Flows Before Acquisitions and Discretionary Investments, or FCF
FCF is defined as Cash Flows From Operating Activities less capital
expenditures (excluding real estate), net of proceeds from the sales of property
and equipment and other, net, and additions to customer acquisition costs. Our
management uses this measure when evaluating the operating performance and
profitability of our consolidated business. FCF is a useful measure in
determining our ability to generate cash flows in excess of our capital
expenditures (both growth and maintenance) and our customer acquisition costs.
As such, we believe this measure provides relevant and useful information to our
current and potential investors. FCF should be considered in addition to, but
not as a substitute for, other measures of financial performance reported in
accordance with GAAP, such as cash flows from operating activities (as
determined in accordance with GAAP).
Following is a reconciliation of Free Cash Flows Before Acquisitions and
Discretionary Investments to Cash Flows from Operating Activities (in millions):
Three Months Ended
March 31,
2006 2007
Free Cash Flows Before Acquisitions and
Discretionary Investments $(12) $ 33
Add: Capital Expenditures (excluding real
estate), net 71 66
Additions to Customer Acquisition Costs 3 3
Cash Flows From Operating Activities (2) $ 62 $102
(2) Columns may not foot due to rounding.
SOURCE Iron Mountain Incorporated
-0- 05/02/2007
/CONTACT: Investor Relations Contact: Stephen P. Golden, Director,
Investor Relations, sgolden@ironmountain.com, +1-617-535-4799/
/Web site: http://www.ironmountain.com /
(IRM)