Exhibit 99.1
IRON MOUNTAIN INCORPORATED REPORTS SECOND QUARTER 2005 FINANCIAL RESULTS
* Total Revenues are $512 Million, Up 15%
* Operating Income is $97 Million
* Net Income is $0.19 per Diluted Share
BOSTON, July 28 /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 June 30,
2005, reporting higher revenues, operating income and OIBDA. Net income for the
quarter was $0.19 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended June 30,
2005 grew to $512 million, an increase of 15% compared to the quarter ended June
30, 2004. For the quarter, storage revenues grew 14% and service revenues grew
16% 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 66th consecutive quarter for which the
Company has reported increased storage revenues.
For the second quarter of 2005, the storage and service revenue internal
growth rates were 9% and 6%, respectively, yielding a total internal revenue
growth rate of 8%. The total core storage and services revenue internal growth
rate was 8% for the quarter.
Richard Reese, the Company's Chairman and CEO, stated, "Iron Mountain posted
excellent results in the second quarter as we surpassed all of our financial
targets. Internal revenue growth was strong and margins exceeded our
expectations. Storage internal growth came in at the high end of our range and
we saw improvement in our service internal growth rates. We won a major piece of
business for our Digital Archive service that will generate meaningful service
revenues in the second half of 2005 and recurring storage revenues for the next
several years. As a result, we now expect our digital business to breakeven for
2005." Reese continued, "Based on the strength of our first half performance, we
are increasing our guidance for the balance of 2005."
Operating income before depreciation and amortization ("OIBDA") was $141
million, or 27.6% of revenues, for the quarter ended June 30, 2005 compared to
$127 million, or 28.6% of revenues, for the quarter ended June 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 second quarter of 2005 was $97 million, or 19% of
revenues, compared to $87 million, or 20% of revenues, for the same period in
2004. Net income for the quarter was $25 million, or $0.19 per diluted share, up
11% compared to $23 million, or $0.17 per diluted share, for the same 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 second quarter of 2005 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 British Pound Sterling
and the Euro since March 31, 2005. The comparable number for the second quarter
of 2004 is also $5 million, or $0.02 per diluted share, of other expense, net
comprised almost entirely of foreign currency related net losses.
For the six months ended June 30, 2005, the Company reported total
consolidated revenues of $1.01 billion, an increase of 15%, with storage
revenues growing at 14% and service revenues growing at 16% compared to the
prior year. For the first half of the year, storage and service revenue internal
growth rates were 9% and 5%, respectively, yielding a total internal revenue
growth rate of 7%.
OIBDA was $277 million, or 27.3% of revenues, for the six months ended June
30, 2005 compared to $250 million, or 28.5% of revenues, for the six months
ended June 30, 2004.
Operating income for the first half of 2005 was $188 million, or 19% of
revenues, compared to $173 million, or 20% of revenues, for 2004. Net income was
$48 million, or $0.37 per diluted share, for the first six-months of 2005,
compared to $46 million, or $0.35 per diluted share, for the comparable period
in 2004.
Included in net income for the six months ended June 30, 2005, is $10
million, or $0.04 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, the Euro and the Canadian Dollar.
Included in net income for the six months ended June 30, 2004, is $7 million, or
$0.03 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 $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 seven acquisitions, including five shredding
businesses, for approximately $21 million in cash and the purchase of minority
interests in two of our Latin American subsidiaries for total consideration of
approximately $19 million in cash.
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
September 30, 2005 Previous Current
--------------------- --------------------- ---------------------
Low High Low High Low High
--------- --------- --------- --------- --------- ---------
Revenues $ 512 $ 522 $ 1,980 $ 2,030 $ 2,020 $ 2,045
Operating Income 94 99 350 360 360 375
Depreciation &
Amortization ~46 180 185 180 185
Capital Expenditures 220 250 250 275
Iron Mountain's conference call to discuss the second 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 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 third 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 Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
2004 2005 2004 2005
------------ ------------ ------------ ------------
Revenues:
Storage $ 255,770 $ 291,666 $ 504,365 $ 577,021
Service and
Storage Material
Sales 189,640 220,256 374,967 436,307
Total Revenues 445,410 511,922 879,332 1,013,328
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) 200,827 228,088 399,137 458,716
Selling, General
and Administrative 118,488 141,313 230,948 276,653
Depreciation and
Amortization 40,363 44,745 77,643 89,291
(Gain) Loss on
Disposal / Writedown
of Property, Plant and
Equipment, Net (1,134) 1,083 (1,014) 865
Total Operating
Expenses 358,544 415,229 706,714 825,525
Operating Income 86,866 96,693 172,618 187,803
Interest Expense, Net 42,659 47,222 86,118 93,028
Other Expense, Net 4,945 4,946 7,215 9,609
Income Before
Provision for
Income Taxes and
Minority Interest 39,262 44,525 79,285 85,166
Provision for
Income Taxes 15,825 18,866 32,375 36,102
Minority Interest
in Earnings of
Subsidiaries 580 249 1,056 705
Net Income $ 22,857 $ 25,410 $ 45,854 $ 48,359
Net Income Per
Share - Basic $ 0.18 $ 0.19 $ 0.36 $ 0.37
Net Income Per
Share - Diluted $ 0.17 $ 0.19 $ 0.35 $ 0.37
Weighted Average
Common Shares
Outstanding - Basic 128,956 130,474 128,757 130,228
Weighted Average
Common Shares
Outstanding - Diluted 131,036 131,470 130,901 131,494
Operating Income
before Depreciation
and Amortization $ 127,229 $ 141,438 $ 250,261 $ 277,094
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, June 30,
2004 2005
------------ ------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 31,942 $ 29,517
Accounts Receivable (less allowances
of $13,886 and $13,162, respectively) 354,434 375,839
Other Current Assets 114,778 105,942
Total Current Assets 501,154 511,298
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 2,266,839 2,404,327
Less: Accumulated Depreciation (617,043) (695,941)
Property, Plant and Equipment, net 1,649,796 1,708,386
Other Assets:
Goodwill, net 2,040,217 2,061,258
Other Non-current Assets, net 251,220 259,513
Total Other Assets 2,291,437 2,320,771
Total Assets $ 4,442,387 $ 4,540,455
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $ 39,435 $ 23,566
Other Current Liabilities 476,028 522,412
Total Current Liabilities 515,463 545,978
Long-term Debt, Net of Current Portion 2,438,587 2,406,196
Other Long-term Liabilities 256,724 292,123
Minority Interests 13,045 5,288
Stockholders' Equity 1,218,568 1,290,870
Total Liabilities and Stockholders' Equity $ 4,442,387 $ 4,540,455
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,
------------------- -------------------
2004 2005 2004 2005
-------- -------- -------- --------
OIBDA
(Operating Income
Before Depreciation
and Amortization) (1) $ 127 $ 141 $ 250 $ 277
Less: Depreciation
and Amortization 40 45 78 89
Operating Income (1) $ 87 $ 97 $ 173 $ 188
Less: Interest Expense,
net 43 47 86 93
Other Expense, net 5 5 7 10
Provision for
Income Taxes 16 19 32 36
Minority Interest 1 -- 1 1
Net Income (1) $ 23 $ 25 $ 46 $ 48
Major Components of
Other Expense, net:
Foreign Exchange Effects $ 5 $ 5 $ 5 $ 10
Debt Extinguishment
Charges $ -- $ -- $ 2 $ --
(1) Columns may not foot due to rounding.
Contact: Stephen P. Golden
Director of Investor Relations
(617) 535-4799