-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HIxTufV+9JQZ9+PoCBnPo+4G1soyQaWhVVWAIPHUbzqeQjVGWaIc3TG3CErcpKCS 5Vqs83vQzvUs/PBimTIlKw== 0001144204-07-039475.txt : 20070801 0001144204-07-039475.hdr.sgml : 20070801 20070801102026 ACCESSION NUMBER: 0001144204-07-039475 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070801 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070801 DATE AS OF CHANGE: 20070801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRON MOUNTAIN INC CENTRAL INDEX KEY: 0001020569 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC WAREHOUSING & STORAGE [4220] IRS NUMBER: 232588479 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13045 FILM NUMBER: 071014728 BUSINESS ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6175354766 MAIL ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: IRON MOUNTAIN INC/PA DATE OF NAME CHANGE: 20000201 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE LEAHY CORP DATE OF NAME CHANGE: 19960807 8-K 1 v082579_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 1, 2007 IRON MOUNTAIN INCORPORATED (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 1-13045 23-2588479 (Commission File Number) (IRS Employer Identification No.) 745 Atlantic Avenue Boston, Massachusetts 02111 (Address of principal executive offices, including zip code) (617) 535-4766 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (7 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On August 1, 2007, the Company issued a press release setting forth the Company's results of operations and financial condition for its fiscal quarter ended June 30, 2007 and its financial outlook for 2007. A copy of the Company's press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (d) Exhibits 99.1 Press Release of Iron Mountain Incorporated dated August 1, 2007 (furnished herewith). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IRON MOUNTAIN INCORPORATED (Registrant) By: /s/ Brian McKeon ---------------------------------- Name: Brian McKeon Title: EVP and Chief Financial Officer Date: August 1, 2007 EX-99.1 2 v082579_ex99-1.txt Iron Mountain Incorporated Reports Second Quarter 2007 Financial Results - The Company exceeds the high end of its forecasted revenue and OIBDA ranges with 15% revenue growth and benefits from expense control; - Revenue performance is driven by strong service revenue growth and the 74th consecutive quarter of increased storage revenues; - Operating income before depreciation and amortization grows 11% to $172 million and net income is $39 million, or $0.19 per diluted share; - The Company raises full year financial outlook to reflect first half performance and the impact of acquisitions. BOSTON, Aug. 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 ended June 30, 2007, reporting strong revenue growth, higher operating income and earnings of $0.19 per diluted share. Iron Mountain posted solid operating income before depreciation and amortization ("OIBDA") growth of 11% in the second quarter supported by strong revenue growth and continued overhead expense control. The Company had balanced revenue performance across its North America Physical, International Physical and Worldwide Digital business segments with overall gains supported by robust service revenue growth. Acquisitions and favorable foreign currency fluctuations also contributed to overall revenue growth. "We are pleased with the performance of the business this quarter and in the first half of this year," said Richard Reese, Chairman and CEO. "We are delivering solid growth across our portfolio and managing our operations effectively in the face of increasing market demand. We continue to invest in our ability to serve our customers through acquisitions that strengthen our service offerings and expand our global footprint. We are on track to deliver against our strategic objectives this year and are raising our full year financial outlook reflecting this progress." Key Financial Highlights - Q2/2007 Iron Mountain's total consolidated revenues for the quarter grew 15% to $669 million driven by solid internal growth of 10% and augmented by several acquisitions, most notably ArchivesOne and Italiana Archivi, which were first reported during this quarter. The Company's overall revenue growth was highlighted by continued strength in service revenue internal growth (11%) led by increasing special project revenues in both North America and Europe. Solid storage (9%) and core service (8%) internal revenue growth rates were also key factors in the Company's revenue performance for the quarter. OIBDA for the quarter grew 11% to $172 million reflecting the impact of the Company's robust revenue performance and expense control, particularly with regard to overhead spending. Selling, general & administrative expenses decreased 70 basis points as a percentage of revenues. This improvement partially offset the expected decrease in gross margin resulting from the impact of acquisitions, decreased capacity utilization due to the timing of new real estate and increased real estate taxes and property insurance costs. See Appendix B at the end of this press release for a discussion of OIBDA and the required reconciliation to the appropriate GAAP measures. Operating income increased 8% to $111 million, indicative of higher OIBDA and higher depreciation and amortization expense reflecting the impact of recent acquisitions. Net income for the quarter was $39 million, or $0.19 per diluted share, including other income, net of $3 million, or $0.01 per share. The components of other income, net, including the impact of foreign currency fluctuations, insurance gains and early debt extinguishment charges are detailed in the table below. Also impacting net income was an increase in interest expense due to additional borrowings for acquisitions and approximately $4 million of reported overlapping interest expense caused by the two-month reporting offset of one of our European subsidiaries as we retired our European senior credit facility. The Company's effective tax rate for the quarter was 26.3% reflecting the positive impacts of the newly created International Treasury Center and the effect of certain foreign currency gains and losses recorded in different tax jurisdictions. Absent the impact of any additional foreign currency rate fluctuations, we expect our effective tax rate to be approximately 33% for 2007. 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. The Company's year to date Free Cash Flow before Acquisitions and Discretionary Investments ("FCF") for the six months ended June 30, 2007 is $59 million reflecting a 19% increase in cash flows from operating activities, approximately $22 million of insurance proceeds related to the July 2006 warehouse fire in London and controlled capital expenditures. Capital expenditures are expected to increase in the second half of the year. See Appendix B at the end of this press release for a discussion of FCF and the required reconciliation to the appropriate GAAP measures. Acquisitions 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 the first quarter of 2007, the Company completed several important acquisitions, most notably, the previously announced acquisition of ArchivesOne, Inc., a leading provider of records and information management services in the United States, which closed in May 2007. The Company also acquired a data protection business based in California, a small shredding company in Canada and two small software businesses. Furthering its European expansion strategy, Iron Mountain acquired records management businesses in France, the Netherlands and Ireland. Financial Performance Outlook The Company is raising its financial performance outlook for the full year ending December 31, 2007 to reflect its first half performance and the expected contribution of recently completed acquisitions. In addition, the Company is issuing guidance for the third quarter ending September 30, 2007. The following statements are based on current expectations and do not include the potential impact of any future acquisitions (dollars in millions): Full Year Ending December 31, 2007 Quarter Ending September 30, 2007 Previous Current Low High Low High Low High Revenues $678 $693 $2,600 $ 2,660 $2,660 $2,695 Operating Income 108 115 434 457 434 453 Depreciation & Amortization ~61 231 236 ~240 Capital Expenditures 395 425 395 425 Internal Revenue Growth 8% 10% 8% 10% Iron Mountain's conference call to discuss its second 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 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 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 Vice President, Investor Relations sgolden@ironmountain.com (617) 535-2994 APPENDIX A Selected Financial Data: (dollars in millions, except per share data) Q2/2006 Q2/2007 Inc (Dec) YTD/2006 YTD/2007 Inc (Dec) Revenues $582 $669 15% $1,145 $1,301 14% Gross Profit (excluding D&A) $322 $361 12% $624 $698 12% Gross Margin % 55.4% 54.0% 54.4% 53.7% OIBDA $154 $172 11% $296 $328 11% OIBDA Margin % 26.5% 25.7% 25.9% 25.2% Operating Income $103 $111 8% $195 $211 8% Interest $47 $61 30% $94 $112 19% Net Income $38 $39 3% $65 $74 13% EPS - Diluted $0.19 $0.19 --% $0.33 $0.37 12% Included in Net Income: Foreign Currency Exchange Effects $ 7 $ 4 $9 $4 Insurance Related Gains -- 3 -- 12 Debt Extinguishment Charges -- (4) -- (6) Q2/2007 YTD/2007 Components of Revenue Growth: Storage internal growth rate 9 % 9 % Service internal growth rate 11 % 10 % Total internal growth rate 10 % 9 % Impact of foreign currency fluctuations 3 % 2 % Impact of acquisitions 3 % 2 % Total revenue growth 15 % 14 % NOTE: Columns may not foot due to rounding. APPENDIX B 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, Ended June 30 2006 2007 2006 2007 OIBDA (Operating Income Before Depreciation and Amortization) $154 $172 $296 $328 Less: Depreciation and Amortization 51 60 101 117 Operating Income $103 $111 $195 $211 Less: Interest Expense, net 47 61 94 112 Other (Income), net (7) (3) (10) (11) Provision for Income Taxes 24 14 45 36 Minority Interest -- -- 1 1 Net Income $38 $39 $65 $74 NOTE: 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): Six Months Ended June 30, 2006 2007 Free Cash Flows Before Acquisitions and Discretionary Investments $25 $59 Add: Capital Expenditures (excluding real estate), net 142 139 Additions to Customer Acquisition Costs 7 9 Cash Flows From Operating Activities $174 $207 NOTE: Columns may not foot due to rounding. 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, 2006 2007 2006 2007 Revenues: Storage $327,863 $368,679 $647,018 $720,844 Service and Storage Material Sales 253,705 300,010 498,207 580,357 Total Revenues 581,568 668,689 1,145,225 1,301,201 Operating Expenses: Cost of Sales (Excluding Depreciation and Amortization) 259,290 307,963 521,658 602,968 Selling, General and Administrative 168,285 188,845 327,128 369,350 Depreciation and Amortization 51,273 60,290 101,121 117,462 (Gain) Loss on Disposal / Writedown of Property, Plant and Equipment, Net (174) 357 (11) 394 Total Operating Expenses 478,674 557,455 949,896 1,090,174 Operating Income 102,894 111,234 195,329 211,027 Interest Expense, Net 47,254 61,222 93,832 111,557 Other Income, Net (6,858) (3,235) (9,705) (10,958) Income Before Provision for Income Taxes and Minority Interest 62,498 53,247 111,202 110,428 Provision for Income Taxes 24,212 14,024 45,183 36,107 Minority Interest in Earnings of Subsidiaries, net 444 171 904 562 Net Income $37,842 $39,052 $65,115 $73,759 Net Income Per Share - Basic $ 0.19 $ 0.20 $ 0.33 $ 0.37 Net Income Per Share - Diluted $ 0.19 $ 0.19 $ 0.33 $ 0.37 Weighted Average Common Shares Outstanding - Basic 197,894 199,792 197,708 199,511 Weighted Average Common Shares Outstanding - Diluted 200,167 201,742 200,069 201,579 Operating Income before Depreciation and Amortization $154,167 $171,524 $296,450 $328,489 Iron Mountain Incorporated Condensed Consolidated Balance Sheets (Amounts in Thousands) (Unaudited) December 31, June 30, 2006 2007 ASSETS CURRENT ASSETS: Cash and Cash Equivalents $45,369 $94,964 Accounts Receivable (less allowances of $15,157 and $17,187, respectively) 473,366 522,448 Other Current Assets 160,986 95,550 Total Current Assets 679,721 712,962 PROPERTY, PLANT AND EQUIPMENT: Property, Plant and Equipment at Cost 2,965,995 3,197,671 Less: Accumulated Depreciation (950,760) (1,062,177) Property, Plant and Equipment, net 2,015,235 2,135,494 OTHER ASSETS: Goodwill, net 2,165,129 2,373,859 Other Non-current Assets, net 349,436 491,481 Total Other Assets 2,514,565 2,865,340 Total Assets $5,209,521 $5,713,796 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current Portion of Long-term Debt $63,105 $31,805 Other Current Liabilities 575,542 600,363 Total Current Liabilities 638,647 632,168 LONG-TERM DEBT, NET OF CURRENT PORTION 2,605,711 2,971,654 OTHER LONG-TERM LIABILITIES 406,600 451,683 MINORITY INTERESTS 5,290 5,883 STOCKHOLDERS' EQUITY 1,553,273 1,652,408 Total Liabilities and Stockholders' Equity $5,209,521 $5,713,796 -----END PRIVACY-ENHANCED MESSAGE-----