EX-99.1 2 im4985ex991.txt EXHIBIT 99.1 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)