Exhibit 99.1
Iron Mountain Incorporated Reports Second Quarter 2006 Financial Results
- Total Revenues are $582 Million, Up 14%
- Operating Income is $103 Million
- OIBDA is $154 Million; 26.5% of Revenues
- Net Income is $0.28 per Diluted Share
BOSTON, July 27 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated
(NYSE: IRM), the global leader in information protection and storage services,
today announced its financial results for the second quarter ended June 30,
2006, reporting higher revenues, strong internal revenue growth and net income
for the quarter of $0.28 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended June 30,
2006 grew to $582 million, an increase of 14% compared to the quarter ended
June 30, 2005. For the quarter, storage revenues grew 12% and service revenues
grew 15% compared to the same period in 2005. 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 70th consecutive quarter
for which the Company has reported increased storage revenues.
For the second quarter of 2006, the storage and service revenue internal
growth rates were 11% and 8%, respectively, yielding a total internal revenue
growth rate of 9%. The total core storage and services revenue internal growth
rate was 10% for the quarter.
"Our business is performing well across geographies and service lines led
by strong revenue growth, particularly storage revenues, the key driver of our
business. We continue making the investments we believe will further enhance
our ability to capture the tremendous market opportunity we see before us and
drive future revenue growth and profitability," stated Richard Reese, the
Company's Chairman and CEO.
Operating income before depreciation and amortization ("OIBDA") was $154
million, or 26.5% of revenues, for the quarter ended June 30, 2006 compared to
$141 million, or 27.6% of revenues, for the quarter ended June 30, 2005. 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 2006 was $103 million, or 18%
of revenues, compared to $97 million, or 19% of revenues, for the same period
in 2005. Net income for the quarter was $38 million, or $0.28 per diluted
share, compared to $25 million, or $0.19 per diluted share, for the same
period in 2005.
Included in net income for the quarter is $7 million, or $0.03 per diluted
share, of other income, net comprised of foreign currency related net gains.
The foreign currency related gains were due primarily to the strengthening of
the British Pound Sterling and the Canadian Dollar compared to March 31, 2006.
Included in net income for the quarter ended June 30, 2005, is $5 million, or
$0.02 per diluted share, of other expense, net comprised primarily of foreign
currency related net losses, due primarily to the weakening of the British
Pound Sterling and the Euro.
For the six months ended June 30, 2006, the Company reported total
consolidated revenues of $1.1 billion, an increase of 13%, with storage
revenues growing at 12% and service revenues growing at 14% compared to the
prior year. For the first six months of the year, storage and service revenue
internal growth rates were 11% and 8%, respectively, yielding a total internal
revenue growth rate of 9%.
OIBDA was $296 million, or 25.9% of revenues, for the six months ended
June 30, 2006 compared to $277 million, or 27.3% of revenues, for the six
months ended June 30, 2005.
Operating income for the first six months of 2006 was $195 million, or 17%
of revenues, compared to $188 million, or 19% of revenues, for 2005. Net
income was $65 million, or $0.49 per diluted share, for the first six months
of 2006, compared to $48 million, or $0.37 per diluted share, for the
comparable period in 2005.
Included in net income for the six months ended June 30, 2006, is $10
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. 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 Canadian Dollar and the Euro.
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. Since the end of the first quarter,
the Company has completed several acquisitions including a 50.1% joint venture
in India, a leading data protection business in Australia/New Zealand, a
document management services business in Brazil, and several small shredding
and records management businesses in North America.
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):
Quarter Ending Full Year Ending December 31, 2006
September 30, -------------------------------------------
2006 Previous Current
-------------------- -------------------- -------------------
Low High Low High Low High
-------- -------- -------- -------- -------- --------
Revenues $ 582 $ 596 $ 2,270 $ 2,320 $ 2,270 $ 2,320
Operating Income 97 104 382 403 382 403
Depreciation &
Amortization ~53 208 212 208 212
Capital
Expenditures 320 360 320 360
Internal revenue
Growth 7% 9% 7% 9%
Iron Mountain's conference call to discuss the second quarter of 2006
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 website 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 90,000 corporate clients throughout North
America, Europe, Latin America and Asia Pacific. For more information, visit
the Company's Web site at 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 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
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; and (x)
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,
------------------------- -------------------------
2005 2006 2005 2006
----------- ----------- ----------- -----------
Revenues:
Storage $ 291,666 $ 327,863 $ 577,021 $ 647,018
Service and Storage Material
Sales 220,256 253,705 436,307 498,207
Total Revenues 511,922 581,568 1,013,328 1,145,225
Operating Expenses:
Cost of Sales (Excluding
Depreciation) 228,088 259,290 458,716 521,658
Selling, General and
Administrative 141,313 168,285 276,653 327,128
Depreciation and Amortization 44,745 51,273 89,291 101,121
Loss (Gain) on Disposal /
Writedown of Property, Plant
and Equipment, Net 1,083 (174) 865 (11)
Total Operating Expenses 415,229 478,674 825,525 949,896
Operating Income 96,693 102,894 187,803 195,329
Interest Expense, Net 47,222 47,254 93,028 93,832
Other Expense (Income), Net 4,946 (6,858) 9,609 (9,705)
Income Before Provision for
Income Taxes and
Minority Interest 44,525 62,498 85,166 111,202
Provision for Income Taxes 18,866 24,212 36,102 45,183
Minority Interest in Earnings of
Subsidiaries, net 249 444 705 904
Net Income $ 25,410 $ 37,842 $ 48,359 $ 65,115
Net Income Per Share - Basic $ 0.19 $ 0.29 $ 0.37 $ 0.49
Net Income Per Share - Diluted $ 0.19 $ 0.28 $ 0.37 $ 0.49
Weighted Average Common Shares
Outstanding - Basic 130,474 131,929 130,228 131,805
Weighted Average Common Shares
Outstanding - Diluted 131,470 133,445 131,494 133,379
Operating Income before
Depreciation and Amortization $ 141,438 $ 154,167 $ 277,094 $ 296,450
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, June 30,
2005 2006
------------- --------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 53,413 $ 40,952
Accounts Receivable (less allowances of
$14,522 and $14,181, respectively) 408,564 440,285
Other Current Assets 92,191 108,359
Total Current Assets 554,168 589,596
Property, Plant and Equipment:
Property, Plant and Equipment at Cost 2,556,880 2,746,506
Less: Accumulated Depreciation (775,614) (870,990)
Property, Plant and Equipment, net 1,781,266 1,875,516
Other Assets:
Goodwill, net 2,138,641 2,186,367
Other Non-current Assets, net 292,065 305,433
Total Other Assets 2,430,706 2,491,800
Total Assets $ 4,766,140 $ 4,956,912
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $ 25,905 $ 65,762
Other Current Liabilities 566,091 543,452
Total Current Liabilities 591,996 609,214
Long-term Debt, Net of Current Portion 2,503,526 2,541,996
Other Long-term Liabilities 294,622 337,016
Minority Interests 5,867 5,083
Stockholders' Equity 1,370,129 1,463,603
Total Liabilities and Stockholders' Equity $ 4,766,140 $ 4,956,912
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,
------------------- -------------------
2005 2006 2005 2006
-------- -------- -------- --------
OIBDA (Operating Income Before
Depreciation and Amortization) (1) $ 141 $ 154 $ 277 $ 296
Less: Depreciation and Amortization 45 51 89 101
Operating Income (1) $ 97 $ 103 $ 188 $ 195
Less: Interest Expense, net 47 47 93 94
Other Expense (Income), net 5 (7) 10 (10)
Provision for Income Taxes 19 24 36 45
Minority Interest -- -- 1 1
Net Income (1) $ 25 $ 38 $ 48 $ 65
Major Components of Other (Income)
Expense, net:
Foreign Exchange Effects $ 5 $ (7) $ 10 $ (9)
(1) Columns may not foot due to rounding.
Free Cash Flows Before Acquisitions and Investments, or FCF
FCF is defined as Cash Flows From Operating Activities less capital
expenditures, 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
Investments to Cash Flows from Operating Activities (in millions):
Six Months Ended
June 30,
-----------------
2005 2006
------- -------
Free Cash Flows Before Acquisitions and Investments $ 54 $ 13
Add: Capital Expenditures, net 131 154
Additions to Customer Acquisition Costs 7 7
Cash Flows From Operating Activities (2) $ 191 $ 174
Cash Paid for Acquisitions and Investments, net $ 35 $ 74
(2) Columns may not foot due to rounding.
Investor Relations Contact:
Stephen P. Golden
Director, Investor Relations
sgolden@ironmountain.com
(617) 535-4799
SOURCE Iron Mountain Incorporated
-0- 07/27/2006
/CONTACT: Stephen P. Golden, Director, Investor Relations, Iron Mountain
Incorporated, sgolden@ironmountain.com, +1-617-535-4799/
/Web site: http://www.ironmountain.com /