EX-99.1 2 im3901ex991.txt EXHIBIT 99.1 Exhibit 99.1 IRON MOUNTAIN INCORPORATED REPORTS THIRD QUARTER 2005 FINANCIAL RESULTS - Total Revenues are $526 Million, Up 15% - Operating Income is $102 Million - Net Income is $0.27 per Diluted Share BOSTON, Oct. 27 /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 September 30, 2005, reporting higher revenues, operating income and OIBDA. Net income for the quarter was $0.27 per diluted share. Iron Mountain's total consolidated revenues for the quarter ended September 30, 2005, grew to $526 million, an increase of 15% compared to the quarter ended September 30, 2004. For the quarter, storage revenues grew 12% and service revenues grew 18% 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 67th consecutive quarter for which the Company has reported increased storage revenues. For the third quarter of 2005, the storage and service revenue internal growth rates were 9% and 12%, respectively, yielding a total internal revenue growth rate of 10%. The total core storage and services revenue internal growth rate was 9% for the quarter. A major data restoration project completed by the digital services business unit added approximately 2% to total internal growth for the quarter. Richard Reese, the Company's Chairman and CEO, stated, "The third quarter was another great quarter for Iron Mountain characterized by strong internal revenue growth and operating margins. Storage internal growth remained at the top end of our 8% to 9% range and service revenue growth, bolstered by a significant digital data restoration project, was supported by solid growth rates in our core businesses. We also announced our entry into the Asia/Pacific region with our agreement to acquire the Australia and New Zealand operations of Pickfords Records Management. This is an important step in our strategy as we expand our geographic footprint to provide consistent, high-quality service to our customers on a global basis." Operating income before depreciation and amortization ("OIBDA") was $148 million, or 28.1% of revenues, for the quarter ended September 30, 2005, compared to $127 million, or 27.7% of revenues, for the quarter ended September 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 third quarter of 2005 was $102 million, or 19% of revenues, compared to $85 million, or 19% of revenues, for the same period in 2004. Net income for the quarter was $36 million, or $0.27 per diluted share, up 97% compared to $18 million, or $0.14 per diluted share, for the same period in 2004. Included in net income for the third quarter of 2005 is $7 million, or $0.03 per diluted share, of other income, net comprised primarily of foreign currency related net gains due to the strengthening of the Canadian Dollar and the Euro since June 30, 2005. The comparable number for the third quarter of 2004 is $3 million, or $0.01 per diluted share, of other income, net comprised almost entirely of foreign currency related net gains. For the nine months ended September 30, 2005, the Company reported total consolidated revenues of $1.54 billion, an increase of 15%, with storage revenues growing at 14% and service revenues growing at 17% compared to the prior year. For the first nine months of the year, storage and service revenue internal growth rates were 9% and 7%, respectively, yielding a total internal revenue growth rate of 8%. OIBDA was $425 million, or 27.6% of revenues, for the nine months ended September 30, 2005, compared to $378 million, or 28.2% of revenues, for the nine months ended September 30, 2004. Operating income for the first nine months of 2005 was $290 million, or 19% of revenues, compared to $258 million, or 19% of revenues, for 2004. Net income was $85 million, or $0.64 per diluted share, for the first nine months of 2005, compared to $64 million, or $0.49 per diluted share, for the comparable 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 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. Included in net income for the nine months ended September 30, 2004, is $4 million, or $0.02 per diluted share, of other expense, net comprised primarily of $2 million of foreign currency related net losses, due primarily to the weakening of the euro 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 12 acquisitions, including eight shredding businesses and two European records management businesses, for approximately $51 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. On October 17, 2005, the Company announced that it had signed a definitive agreement to acquire the Australian and New Zealand operations of Pickfords Records Management ("PRM") for cash consideration of approximately A$115 million (US$87 million). The transaction is subject to customary closing conditions and regulatory approvals and is expected to be completed by year end. PRM, a leading records management company based in Melbourne, Australia, serves a customer base of more than 3,000 customers in a variety of sectors including finance, healthcare, and federal and state government. With 30 facilities located 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), PRM has a truly national footprint in both countries. The company's portfolio of services includes records storage and management, secure shredding, imaging and business process outsourcing. 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 ----------------------------------------- December 31, 2005 Previous Current ------------------- ------------------- ------------------- Low High Low High Low High -------- -------- -------- -------- -------- -------- Revenues $ 512 $ 522 $ 2,020 $ 2,045 $ 2,052 $ 2,062 Operating Income (1) 94 99 360 375 384 389 Depreciation & Amortization ~48 180 185 ~183 Capital Expenditures 250 275 250 275
(1) Includes $5 million of expected gains from real estate dispositions in Q4/2005. Iron Mountain's conference call to discuss the third 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, 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 fourth 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 Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2004 2005 2004 2005 ------------ ------------ ------------ ------------ Revenues: Storage $ 263,867 $ 296,784 $ 768,232 $ 873,805 Service and Storage Material Sales 195,463 229,688 570,430 665,995 Total Revenues 459,330 526,472 1,338,662 1,539,800 Operating Expenses: Cost of Sales (Excluding Depreciation) 209,797 237,414 608,934 696,130 Selling, General and Administrative 122,508 141,442 353,456 418,095 Depreciation and Amortization 42,269 45,698 119,912 134,989 (Gain) Loss on Disposal / Writedown of Property, Plant and Equipment, Net (246) (259) (1,260) 606 Total Operating Expenses 374,328 424,295 1,081,042 1,249,820 Operating Income 85,002 102,177 257,620 289,980 Interest Expense, Net 54,313 44,308 140,431 137,336 Other (Income) Expense, Net (2,979) (6,542) 4,236 3,067 Income Before Provision \ for Income Taxes and Minority Interest 33,668 64,411 112,953 149,577 Provision for Income Taxes 14,293 27,637 46,668 63,739 Minority Interest in Earnings of Subsidiaries 925 397 1,981 1,102 Net Income $ 18,450 $ 36,377 $ 64,304 $ 84,736 Net Income Per Share - Basic $ 0.14 $ 0.28 $ 0.50 $ 0.65 Net Income Per Share - Diluted $ 0.14 $ 0.27 $ 0.49 $ 0.64 Weighted Average Common Shares Outstanding - Basic 129,288 130,862 128,934 130,439 Weighted Average Common Shares Outstanding - Diluted 131,366 132,283 131,056 131,757 Operating Income before Depreciation and Amortization $ 127,271 $ 147,875 $ 377,532 $ 424,969
Iron Mountain Incorporated Condensed Consolidated Balance Sheets (Amounts in Thousands) (Unaudited)
December 31, September 30, 2004 2005 -------------- -------------- ASSETS Current Assets: Cash and Cash Equivalents $ 31,942 $ 43,990 Accounts Receivable (less allowances of $13,886 and $12,862, respectively) 354,434 394,599 Other Current Assets 114,778 107,263 Total Current Assets 501,154 545,852 Property, Plant and Equipment: Property, Plant and Equipment at Cost 2,266,839 2,436,077 Less: Accumulated Depreciation (617,043) (733,600) Property, Plant and Equipment, net 1,649,796 1,702,477 Other Assets: Goodwill, net 2,040,217 2,050,575 Other Non-current Assets, net 251,220 253,586 Total Other Assets 2,291,437 2,304,161 Total Assets $ 4,442,387 $ 4,552,490 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current Portion of Long-term Debt $ 39,435 $ 26,303 Other Current Liabilities 476,028 501,538 Total Current Liabilities 515,463 527,841 Long-term Debt, Net of Current Portion 2,438,587 2,382,139 Other Long-term Liabilities 256,724 309,119 Minority Interests 13,045 5,969 Stockholders' Equity 1,218,568 1,327,422 Total Liabilities and Stockholders' Equity $ 4,442,387 $ 4,552,490
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, ------------------- ------------------- 2004 2005 2004 2005 -------- -------- -------- -------- OIBDA (Operating Income Before Depreciation and Amortization) (1) $ 127 $ 148 $ 378 $ 425 Less: Depreciation and Amortization 42 46 120 135 Operating Income (1) $ 85 $ 102 $ 258 $ 290 Less: Interest Expense, net 54 44 140 137 Other (Income) Expense, net (3) (7) 4 3 Provision for Income Taxes 14 28 47 64 Minority Interest 1 -- 2 1 Net Income (1) $ 18 $ 36 $ 64 $ 85 Major Components of Other (Income) Expense, net: Foreign Exchange Effects $ (3) $ (6) $ 2 $ 4 Debt Extinguishment Charges $ -- $ -- $ 2 $ -- (1) Columns may not foot due to rounding. Contact: Stephen P. Golden Director of Investor Relations 617-535-4799 SOURCE Iron Mountain Incorporated -0- 10/27/2005 /CONTACT: Stephen P. Golden, Director of Investor Relations, Iron Mountain Incorporated, +1-617-535-4799/ /Web site: http://www.ironmountain.com /