Exhibit 99.1
IRON MOUNTAIN INCORPORATED REPORTS THIRD QUARTER 2006 FINANCIAL RESULTS
* Total Revenues are $596 Million, Up 13%
* Operating Income is $97 Million
* OIBDA is $150 Million; 25.2% of Revenues
* Net Income is $0.20 per Diluted Share
BOSTON, Oct. 31 /PRNewswire-FirstCall/ -- Iron Mountain Incorporated (NYSE:
IRM), the global leader in information protection and storage services, today
announced its financial results for the third quarter ended September 30, 2006,
reporting higher revenues, strong storage internal revenue growth and net income
for the quarter of $0.20 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended September
30, 2006 grew to $596 million, an increase of 13% compared to the quarter ended
September 30, 2005. For the quarter, storage revenues grew 14% and service
revenues grew 12% compared to the same period in 2005. Storage revenues, which
are considered a key performance indicator for the information protection and
storage services industry, are largely recurring since customers typically
retain their records for many years. This marks the 71st consecutive quarter for
which the Company has reported increased storage revenues.
For the third quarter of 2006, the storage and service revenue internal
growth rates were 11% and 3%, respectively, yielding a total internal revenue
growth rate of 7%. The total core storage and services revenue internal growth
rate was 9% for the quarter. The service internal growth rate and the total
internal growth rate were both impacted by a large data restoration project
completed by the Company's digital business in the third quarter of 2005 that
did not repeat in 2006.
"Our business continues to perform as expected and as we forecasted at our
Investor Day earlier this month. Strong revenue growth, particularly in storage
revenues, a key driver of our business, remains a highlight as our customer
facing investments continue to generate the anticipated results," stated Richard
Reese, the Company's Chairman and CEO. "We are confident that our on-going
growth and productivity investments, which are designed to enhance our ability
to drive long-term, increasingly profitable growth and ultimately higher
shareholder value, will generate similar success."
Operating income before depreciation and amortization ("OIBDA") was $150
million, or 25.2% of revenues, for the quarter ended September 30, 2006 compared
to $148 million, or 28.1% of revenues, for the quarter ended September 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 third quarter of 2006 was $97 million, or 16% of
revenues, compared to $102 million, or 19% of revenues, for the same period in
2005. Net income for the quarter was $27 million, or $0.20 per diluted share,
compared to $36 million, or $0.27 per diluted share, for the same period in
2005.
Included in net income for the quarter is $1 million, or less than $0.01 per
diluted share, of other expense, net comprised primarily of charges related to
the early extinguishment of debt associated with the Company's financing
activities partially offset by foreign currency related net gains. The foreign
currency related gains were due primarily to the strengthening of the British
Pound Sterling compared to June 30, 2006. Included in net income for the quarter
ended September 30, 2005, is $7 million, or $0.03 per diluted share, of other
income, net comprised primarily of foreign currency related net gains, due
mainly to the strengthening of the Canadian Dollar.
For the nine months ended September 30, 2006, the Company reported total
consolidated revenues of $1.7 billion, an increase of 13% compared to the prior
year. Storage revenues and service revenues also grew 13% for the first nine
months of 2006 compared to the prior year. For the first nine months of the
year, storage and service revenue internal growth rates were 10% and 6%,
respectively, yielding a total internal revenue growth rate of 9%.
OIBDA was $447 million, or 25.7% of revenues, for the nine months ended
September 30, 2006 compared to $425 million, or 27.6% of revenues, for the nine
months ended September 30, 2005.
Operating income for the first nine months of 2006 was $292 million, or 17%
of revenues, compared to $290 million, or 19% of revenues, for 2005. Net income
was $92 million, or $0.69 per diluted share, for the first nine months of 2006,
compared to $85 million, or $0.64 per diluted share, for the comparable period
in 2005.
Included in net income for the nine months ended September 30, 2006, is $9
million, or $0.04 per diluted share, of other income, net comprised primarily of
foreign currency related net gains, due mainly to the strengthening of the
British Pound Sterling and the Canadian Dollar, partially offset by charges
related to the early extinguishment of debt associated with the Company's
financing activities. Included in net income for the nine months ended September
30, 2005, is $3 million, or $0.01 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 and the Euro offset by
the strengthening of 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 service offerings while enhancing its existing
operations. During the third quarter, the Company completed several small
shredding and records management business acquisitions 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. Except as required by law, the Company undertakes no obligation to
update this information (dollars in millions):
Full Year Ending December 31, 2006
Quarter Ending ------------------------------------------------------
December 31, 2006 Previous Current
------------------------ ------------------------ ------------------------
Low High Low High Low High
--------- --------- --------- --------- --------- ---------
Revenues $ 594 $ 609 $ 2,300 $ 2,350 $ 2,335 $ 2,350
Operating Income 98 113 392 403 390 405
Depreciation &
Amortization ~56 208 212 ~210
Capital
Expenditures 360 395 360 385
Internal Revenue
Growth 8% 9% 8% 9%
Iron Mountain's conference call to discuss the third 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 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 2006 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, 2005 under
"Item 1A. Risk Factors" and our Current Report on Form 8-K filed on July 11,
2006. 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 Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2006 2005 2006
------------ ------------ ------------ ------------
Revenues:
Storage $ 296,784 $ 338,313 $ 873,805 $ 985,331
Service and Storage
Material Sales 229,688 257,297 665,995 755,504
Total Revenues 526,472 595,610 1,539,800 1,740,835
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) 237,414 277,227 696,130 798,885
Selling, General
and Administrative 141,442 167,602 418,095 494,730
Depreciation and
Amortization 45,698 53,146 134,989 154,267
(Gain) Loss on
Disposal / Writedown
of Property, Plant and
Equipment, Net (259) 505 606 494
Total Operating
Expenses 424,295 498,480 1,249,820 1,448,376
Operating Income 102,177 97,130 289,980 292,459
Interest Expense, Net 44,308 50,462 137,336 144,294
Other (Income) Expense,
Net (6,542) 583 3,067 (9,122)
Income Before
Provision for
Income Taxes
and Minority
Interest 64,411 46,085 149,577 157,287
Provision for Income
Taxes 27,637 19,205 63,739 64,388
Minority Interest in
Earnings of Subsidiaries,
net 397 267 1,102 1,171
Net Income $ 36,377 $ 26,613 $ 84,736 $ 91,728
Net Income Per Share --
Basic $ 0.28 $ 0.20 $ 0.65 $ 0.70
Net Income Per Share --
Diluted $ 0.27 $ 0.20 $ 0.64 $ 0.69
Weighted Average Common
Shares Outstanding --
Basic 130,862 132,205 130,439 131,938
Weighted Average Common
Shares Outstanding --
Diluted 132,283 133,724 131,757 133,494
Operating Income before
Depreciation and
Amortization $ 147,875 $ 150,276 $ 424,969 $ 446,726
Iron Mountain Incorporated
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, September 30,
2005 2006
------------- -------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 53,413 $ 45,389
Accounts Receivable (less
allowances of $14,522 and
$14,385, respectively) 408,564 457,996
Other Current Assets 92,191 116,534
Total Current Assets 554,168 619,919
Property, Plant and Equipment:
Property, Plant and Equipment
at Cost 2,556,880 2,843,779
Less: Accumulated Depreciation (775,614) (915,997)
Property, Plant and
Equipment, net 1,781,266 1,927,782
Other Assets:
Goodwill, net 2,138,641 2,185,659
Other Non-current Assets, net 292,065 325,587
Total Other Assets 2,430,706 2,511,246
Total Assets $ 4,766,140 $ 5,058,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt $ 25,905 $ 59,748
Other Current Liabilities 566,091 556,438
Total Current Liabilities 591,996 616,186
Long-term Debt, Net of Current Portion 2,503,526 2,575,081
Other Long-term Liabilities 294,622 359,054
Minority Interests 5,867 5,041
Stockholders' Equity 1,370,129 1,503,585
Total Liabilities and
Stockholders' Equity $ 4,766,140 $ 5,058,947
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 Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2006 2005 2006
-------- -------- -------- --------
OIBDA (Operating Income Before
Depreciation and Amortization)(1) $ 148 $ 150 $ 425 $ 447
Less: Depreciation and
Amortization 46 53 135 154
Operating Income (1) $ 102 $ 97 $ 290 $ 292
Less: Interest Expense, net 44 50 137 144
Other (Income)
Expense, net (7) 1 3 (9)
Provision for
Income Taxes 28 19 64 64
Minority Interest -- -- 1 1
Net Income (1) $ 36 $ 27 $ 85 $ 92
Foreign Currency Impact
on Other (Income)
Expense, net: $ (6) $ (2) $ 4 $ (11)
Debt Extinguishment Charges
Included in Other (Income)
Expense, net: $ -- $ 3 $ -- $ 3
(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):
Nine Months Ended
September 30,
-----------------------
2005 2006
---------- ----------
Free Cash Flows Before
Acquisitions and Investments $ 89 $ 12
Add: Capital Expenditures, net 180 256
Additions to Customer
Acquisition Costs 10 10
Cash Flows From Operating
Activities (2) $ 279 $ 279
(2) Columns may not foot due to rounding.
SOURCE Iron Mountain Incorporated
-0- 10/31/2006
/CONTACT: Stephen P. Golden, Director, Investor Relations of Iron
Mountain Incorporated, +1-617-535-4799, sgolden@ironmountain.com/
/Web site: http://www.ironmountain.com /
(IRM)