Press Releases
Iron Mountain Incorporated Reports Fourth Quarter 2006 Financial Results
Company Issues 2007 Full-Year Guidance
- Total Revenues are $610 Million, Up 13%
- Operating Income is $115 Million
- OIBDA is $169 Million; 27.7% of Revenues
- Net Income is $0.18 per Diluted Share
Boston, MA - February 28, 2007 - Iron Mountain Incorporated (NYSE: IRM), the global leader in information protection and storage services, today announced its financial results for the fourth quarter ended December 31, 2006, reporting higher revenues, strong storage internal revenue growth and net income for the quarter of $0.18 per diluted share.
Iron Mountain's total consolidated revenues for the quarter ended December 31, 2006 grew to $610 million, an increase of 13% compared to the quarter ended December 31, 2005. For the quarter, storage revenues grew 11% and service revenues grew 16% 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 72nd consecutive quarter for which the Company has reported increased storage revenues.
For the fourth quarter of 2006, the storage and service revenue internal growth rates were 10% and 10%, 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.
“2006 was another solid year for Iron Mountain, highlighted by strong internal revenue growth rates, particularly in storage revenue, a key driver of our business, as our customer facing investments continue to generate the expected results,” stated Richard Reese, the Company's Chairman and CEO. “The opportunities before us are many and we are aggressively investing in those that hold the greatest potential for driving long-term, increasingly profitable growth and ultimately higher shareholder value.”
Operating income before depreciation and amortization (“OIBDA”) was $169 million, or 27.7% of revenues, for the quarter ended December 31, 2006 compared to $149 million, or 27.6% of revenues, for the quarter ended December 31, 2005. Included in OIBDA for the quarter ended December 31, 2006 is $10 million, or $0.03 per diluted share, of gains related to the sale of real estate compared to $4 million, or $0.01 per diluted share, for the quarter ended December 31, 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 fourth quarter of 2006 was $115 million, or 19% of revenues, compared to $97 million, or 18% of revenues, for the same period in 2005. Net income for the quarter was $37 million, or $0.18 per diluted share, compared to $26 million, or $0.13 per diluted share, for the same period in 2005. All per share amounts have been restated to reflect the three-for-two stock split effected in the form of a stock dividend on December 29, 2006.
Included in net income for the quarter is $3 million, or $0.01 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 compared to September 30, 2006. 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 mainly to the weakening of the Euro and the British Pound Sterling.
For the twelve months ended December 31, 2006, the Company reported total consolidated revenues of $2.4 billion, an increase of 13% compared to the prior year. Storage revenues and service revenues grew 12% and 14%, respectively, for the twelve months of 2006 compared to the prior year. For the year, storage and service revenue internal growth rates were 10% and 7%, respectively, yielding a total internal revenue growth rate of 9%.
OIBDA was $616 million, or 26.2% of revenues, for the year ended December 31, 2006 compared to $574 million, or 27.6% of revenues, for the year ended December 31, 2005. Included in OIBDA for the year ended December 31, 2006 is $10 million, or $0.03 per diluted share, of net gains related primarily to the sale of real estate compared to $3 million, or $0.01 per diluted share, for the year ended December 31, 2005.
Operating income for the twelve months of 2006 was $407 million, or 17% of revenues, compared to $387 million, or 19% of revenues, for 2005. Net income was $129 million, or $0.64 per diluted share, for 2006, compared to $111 million, or $0.56 per diluted share, for 2005.
Included in net income for the twelve months ended December 31, 2006, is $12 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 British Pound Sterling, partially offset by charges related to the early extinguishment of debt associated with the Company's financing activities. Included in net income for the twelve months ended December 31, 2005, is $6 million, or $0.02 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. Since the end of the third quarter, the Company completed several small shredding and records management business acquisitions in North America and acquired a 50.1% equity interest in Transnational Company Pte. Ltd.. Established in 1978, Transnational Company Pte. Ltd. is headquartered in Singapore and is a provider of information protection and storage services in Singapore, Hong Kong-SAR, China, Indonesia, Sri Lanka, Taiwan, and Malaysia.
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):
| Quarter Ending March 31, 2007 | Full Year Ending December 31, 2007 | ||||
|
Low |
High |
Low |
High | ||
|
Revenues |
$615 |
$630 |
$2,530 |
$2,600 |
|
|
Operating Income |
92 |
99 |
427 |
452 |
|
|
Depreciation & Amortization |
~55 |
223 |
228 |
||
|
Capital Expenditures |
390 |
420 |
|||
|
Internal Revenue Growth |
8% |
10% |
|||
Iron Mountain's conference call to discuss its fourth quarter 2006 financial results and 2007 financial guidance will be held today at 10:30 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
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
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, 2005 under “Item 1A. Risk Factors” and our Current Report on Form 8-K filed on July 11, 2006.
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.
