Exhibit 99.1
IRON MOUNTAIN INCORPORATED REPORTS 2005 FINANCIAL RESULTS
- Total Revenues are $2.1 Billion, Up 14%
- Operating Income is $387 Million
- OIBDA is $574 Million; 27.6% of Revenues
- Net Income Before Cumulative Effect of Change in Accounting Principle is
$0.86 per Diluted Share
BOSTON, March 1 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated (NYSE:
IRM), the global leader in information protection and storage services, today
announced its financial results for the quarter and full year ended December 31,
2005, reporting higher revenues, operating income and OIBDA. Net income for the
year was $0.84 per diluted share.
Iron Mountain's total consolidated revenues for the year ended December 31,
2005 grew to $2,078 million, an increase of 14% compared to the year ended
December 31, 2004. For the year, storage revenues grew 13% and service revenues
grew 16% compared to 2004. For the fourth quarter of 2005, storage revenues grew
to $308 million, an increase of 12% compared to the fourth quarter of 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
68th consecutive quarter for which the Company has reported increased storage
revenues.
For the year ended December 31, 2005, the storage and service revenue
internal growth rates were 9% and 7%, respectively, yielding a total internal
revenue growth rate of 8%. The total core storage and services revenue internal
growth rate was 8% for the year.
Richard Reese, the Company's Chairman and CEO, stated, "Our business has
performed very well throughout 2005 and the fourth quarter was no exception. We
exceeded our revenue and OIBDA targets and our internal revenue growth rates
were at or above the top of our forecasted ranges. We also did very well against
our strategic agenda in the fourth quarter with the acquisitions of Pickfords, a
premier records management business with excellent national footprints in
Australia and New Zealand; Secure Destruction Services, the only national
provider of shredding services in the UK; and LiveVault, the leading provider of
disk-based online server backup and recovery solutions. We still have a lot of
work ahead of us but the opportunity set remains strong and we are well
positioned to take advantage of those opportunities."
Operating income before depreciation and amortization ("OIBDA") was $574
million, or 27.6% of revenues, for the year ended December 31, 2005 compared to
$508 million, or 28.0% of revenues, for the year ended December 31, 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 2005 was $387 million, or 19% of revenues, compared to
$344 million, or 19% of revenues, for 2004. Net income before Cumulative Change
in Accounting Principle for the year was $114 million, or $0.86 per diluted
share, compared to $94 million, or $0.72 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.
Effective December 31, 2005, the Company adopted the provisions of FASB
Interpretation Number 47, "Accounting for Conditional Asset Retirement
Obligations ("ARO"), an interpretation of FASB Statement No. 143." This requires
us to record a liability for the present value of the estimated future costs of
preparing a facility for exit based on contractual obligations contained in the
lease. This relates primarily to the removal of vaults and shredding pits. As a
result, a non-cash charge of $3 million, net of tax, was recorded in the fourth
quarter of 2005 as a Cumulative Effect of Change in Accounting Principle. This
charge reduced earnings by $0.02 per diluted share for both the fourth quarter
and full year 2005. Going forward, the accretion of the associated liability
will be recorded as a component of depreciation expense.
Also included in net income for 2005 is $6 million, or $0.03 per diluted
share, of other expense, net comprised almost exclusively of foreign currency
related net losses. These losses were due primarily to the weakening of the
British Pound Sterling and the Euro partially offset by a strengthening of the
Canadian Dollar. Included in net income for the year ended December 31, 2004, is
$8 million, or $0.04 per diluted share, of other income, net comprised primarily
of foreign currency related net gains, due primarily to the strengthening of the
British Pound Sterling and the Canadian Dollar.
In line with its strategy, Iron Mountain acquires attractive businesses that
provide a strong platform for future growth by expanding the Company's
geographic footprint and information protection and storage service offerings
while enhancing its existing operations. In 2005, the Company completed 16
acquisitions for approximately $184 million in cash and the purchase of minority
interests in three of our Latin American subsidiaries for total consideration of
approximately $20 million in cash.
The most significant acquisitions completed in 2005 include: (i) the
Australian and New Zealand operations of Pickfords Records Management, a premier
records management company based in Melbourne, Australia, with operations in all
of Australia's capital cities (Adelaide, Brisbane, Canberra, Darwin, Hobart,
Melbourne, Perth and Sydney) and all the major business centers in New Zealand
(Auckland, Wellington, Hamilton and Christchurch); and (ii) LiveVault, a leading
provider of disk-based online server backup and recovery solutions. Completed
after the end of their fiscal year and not included in our 2005 results of
operations is Iron Mountain Europe's acquisition of Secure Destruction Services
Ltd., the largest shredding business in the UK. Secure Destruction is based in
London with seven operating centers and more than 200 employees located
throughout the UK.
For the quarter ended December 31, 2005, the Company reported total
consolidated revenues of $538 million, an increase of 12%, with storage revenues
growing at 12% and service revenues growing at 13% compared to the same period
in 2004. For the quarter, storage and service revenue internal growth rates were
10% and 9%, respectively, yielding a total internal revenue growth rate of 9%.
OIBDA was $149 million, or 27.6% of revenues, for the quarter ended December
31, 2005 compared to $131 million, or 27.3% of revenues, for the quarter ended
December 31, 2004.
Operating income for the fourth quarter of 2005 was $97 million, or 18% of
revenues, compared to $87 million, or 18% of revenues, for 2004. Net income
before Cumulative Effect of Change in Accounting Principle for the quarter was
$29 million, or $0.22 per diluted share, for 2005, compared to $30 million, or
$0.23 per diluted share, for the same period in 2004.
Also included in net income for the quarter ended December 31, 2005, is $3
million, or $0.01 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 September 30, 2005. The comparable amount for the
fourth quarter of 2004 is $12 million, or $0.05 per diluted share, of other
income, net comprised almost entirely of foreign currency related net gains.
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, 2006
-------------------------------------
Quarter Ending
March 31, 2006 Previous Current
----------------- ----------------- -----------------
Low High Low High Low High
------- ------- ------- ------- ------- -------
Revenues $ 550 $ 560 $ 2,240 $ 2,310 $ 2,240 $ 2,310
Operating Income 91 96 407 423 404 420
Depreciation &
Amortization ~51 203 207 206 210
Capital Expenditures 300 355 300 355
Iron Mountain's conference call to discuss the 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 global leader in information protection
and storage services. Founded in 1951, the Company has grown to service more
than 275,000 customer accounts throughout the United States, Canada, Europe,
Latin America and the Pacific Rim. 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 first quarter and full year 2006
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 Twelve Months Ended
December 31, December 31,
--------------------------- ---------------------------
2004 2005 2004 2005
------------ ------------ ------------ ------------
Revenues:
Storage $ 275,134 $ 307,746 $ 1,043,366 $ 1,181,551
Service and Storage
Material Sales 203,793 230,609 774,223 896,604
Total Revenues 478,927 538,355 1,817,589 2,078,155
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) 214,965 242,109 823,899 938,239
Selling, General and
Administrative 132,790 151,600 486,246 569,695
Depreciation and
Amortization 43,717 51,933 163,629 186,922
Loss (Gain) on
Disposal / Writedown
of Property, Plant
and Equipment, Net 579 (4,091) (681) (3,485)
Total Operating
Expenses 392,051 441,551 1,473,093 1,691,371
Operating Income 86,876 96,804 344,496 386,784
Interest Expense, Net 45,318 46,248 185,749 183,584
Other (Income)
Expense, Net (12,224) 3,115 (7,988) 6,182
Income Before
Provision for
Income Taxes and
Minority Interest 53,782 47,441 166,735 197,018
Provision for
Income Taxes 22,906 17,745 69,574 81,484
Minority Interest in
Earnings of Subsidiaries 989 582 2,970 1,684
Income Before
Cumulative Effect
of Change in
Accounting
Principle 29,887 29,114 94,191 113,850
Cumulative Effect of
Change in Accounting
Principle, net of
tax benefit -- 2,751 -- 2,751
Net Income $ 29,887 $ 26,363 $ 94,191 $ 111,099
Net Income Per Share - Basic:
Income Before
Cumulative Effect
of Change in Accounting
Principle $ 0.23 $ 0.22 $ 0.73 $ 0.87
Cumulative Effect
of Change in
Accounting Principle,
Net of Tax Benefit -- (0.02) -- (0.02)
Net Income Per
Share - Basic $ 0.23 $ 0.20 $ 0.73 $ 0.85
Net Income Per Share - Diluted:
Income Before
Cumulative Effect of
Change in
Accounting
Principle $ 0.23 $ 0.22 $ 0.72 $ 0.86
Cumulative Effect
of Change in
Accounting Principle,
Net of Tax Benefit -- (0.02) -- (0.02)
Net Income Per Share -
Diluted $ 0.23 $ 0.20 $ 0.72 $ 0.84
Weighted Average
Common Shares
Outstanding - Basic 129,532 131,317 129,083 130,659
Weighted Average
Common Shares
Outstanding -
Diluted 131,537 133,008 131,176 132,070
Operating Income
before Depreciation
and Amortization $ 130,593 $ 148,737 $ 508,125 $ 573,706
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, December 31,
2004 2005
------------ ------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 31,942 $ 53,413
Accounts Receivable (less allowances of $13,886
and $14,522, respectively) 354,434 408,564
Other Current Assets 114,778 92,191
Total Current Assets 501,154 554,168
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 2,266,839 2,556,880
Less: Accumulated Depreciation (617,043) (775,614)
Property, Plant and Equipment, net 1,649,796 1,781,266
Other Assets:
Goodwill, net 2,040,217 2,138,641
Other Non-current Assets, net 251,220 292,065
Total Other Assets 2,291,437 2,430,706
Total Assets $ 4,442,387 $ 4,766,140
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $ 39,435 $ 25,905
Other Current Liabilities 476,028 566,091
Total Current Liabilities 515,463 591,996
Long-term Debt, Net of Current Portion 2,438,587 2,503,526
Other Long-term Liabilities 256,724 294,622
Minority Interests 13,045 5,867
Stockholders' Equity 1,218,568 1,370,129
Total Liabilities and Stockholders' Equity $ 4,442,387 $ 4,766,140
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 Full Year Ended
December 31, December,
------------------- -------------------
2004 2005 2004 2005
-------- -------- -------- --------
OIBDA (Operating Income Before
Depreciation and Amortization) (1) $ 131 $ 149 $ 508 $ 574
Less: Depreciation and Amortization 44 52 164 187
Operating Income (1) $ 87 $ 97 $ 344 $ 387
Less: Interest Expense, net 45 46 186 184
Other (Income) Expense, net (12) 3 (8) 6
Provision for Income Taxes 23 18 70 81
Minority Interest 1 1 3 2
Cumulative Effect of
Change in Accounting Principle -- 3 -- 3
Net Income (1) $ 30 $ 26 $ 94 $ 111
Major Components of Other (Income)
Expense, net:
Foreign Exchange Effects $ (11) $ 3 $ (9) $ 7
(1) Columns may not foot due to rounding.
Contact: Stephen P. Golden
Director of Investor Relations
(617) 535-4799
SOURCE Iron Mountain Incorporated
-0- 03/01/2006
/CONTACT: Stephen P. Golden, Director of Investor Relations,
+1-617-535-4799/
/Web site: http://www.ironmountain.com /
(IRM)