|By Business Wire||
|May 1, 2014 06:01 AM EDT||
Iron Mountain Incorporated (NYSE: IRM), the storage and information management services company announces financial and operating results for the first quarter of 2014.
- Total reported revenues were $770 million, compared with $747 million in 2013. On a constant dollar (C$) basis, total revenue growth was 4.7%, reflecting solid storage rental revenue gains of 5.3% and service revenue growth of 3.8%.
- Adjusted OIBDA was $229 million, compared with $227 million in 2013.
- Adjusted EPS was $0.26 per share ($0.22 per share on a GAAP basis), compared with $0.27 per share ($0.10 per share on a GAAP basis), in 2013.
Reconciliations of supplemental non-GAAP measures to GAAP measures may be found in Appendix A or by visiting the Investor Relations page at www.ironmountain.com under “Supplemental Data.”
“Our first quarter results reflect the durability of our storage rental business and our continued focus on preserving and extending that durability. During the quarter we closed on acquisitions in both developed and emerging markets, maintained our high profitability and delivered solid financial and operating results in line with our expectations,” said William L. Meaney, Iron Mountain’s president and chief executive officer. “We continued to execute on the key pillars of our strategic plan – getting more from our developed markets, extending our reach into emerging markets and capitalizing on emerging business opportunities – and believe our approach will continue to deliver consistent, long-term growth with low volatility and attractive stockholder returns.”
First quarter C$ total storage rental growth reflected strong increases of 12.7% in the company’s International business and growth in the North American Records and Information Management (RIM) and Data Management (DM) segments of 3.0% and 2.8%, respectively. “We are pleased with the performance of the business in the first quarter, as we made progress on integration of acquisitions completed in late 2013 and are beginning to see the benefits of our organizational realignment,” Meaney said.
Since the beginning of 2014, the company has invested more than $60 million in five international storage related businesses and acquired the records inventory of five document storage companies in the United States for an additional $5 million. The international transactions include three deals in Turkey and Poland, which enhanced the company’s leadership position in these emerging markets, and the acquisition of a leading provider of offsite data storage and data protection services in Australia. “These transactions are consistent with our plan to extend our market leadership, support long-term growth and solid returns, and capture a significant amount of un-vended records storage,” Meaney said.
Operating performance for the quarter was in line with expectations, with consistent C$ storage rental revenue growth of 5.3% and service revenue growth of 3.8%. Internal storage rental growth for the quarter was 1.4%, driven by 5.2% gains in the International business and 2.3% internal growth in the North American DM segment, partially offset by flat internal growth in the North American RIM segment. Foreign currency rate changes reduced reported storage rental revenue growth rates by approximately 1.4% for the quarter.
Global records management volume grew by 6.7% on a year-over-year basis, supported by solid 15.2% volume increases in the International business, driven by strong growth from both emerging and developed markets as well as recent acquisitions. Net pricing in North America increased by 0.8% compared with the year-ago period.
As the company has previously noted, service revenues reflect a trend toward reduced retrieval/re-file activity and related transportation revenues; however, this rate of decline has begun to moderate in recent periods. First quarter internal service revenue declined 0.7% compared with the prior-year period. C$ service revenue growth was 3.8%, driven by recent acquisitions with related new incoming volume and transportation fees, growth in imaging projects and an increase in shredding volume with related growth in revenue from paper recycling, offset somewhat by lower recycled paper pricing when compared with prior year averages.
Adjusted OIBDA margins for the first quarter of 2014 decreased by 80 basis points to 29.7%, compared with the first quarter of 2013, primarily due to the recognition of $2.4 million of charges related to the 2013 organizational realignment and $3.5 million for the insurance deductible charge related to the recent fire in Argentina. First quarter Adjusted OIBDA margins in the North American RIM segment remained strong at 37.5%. North American DM Adjusted OIBDA margins were 56.1%, down from the same period in 2013 due to declines in service activity levels as the business becomes more archival in nature. The International business continued to deliver profitability on a portfolio basis in line with the company’s mid-20% target, with Adjusted OIBDA margins of 26.2% for the first quarter.
Free Cash Flow (FCF) for the first quarter before acquisitions, real estate capital expenditures, operating costs and cash taxes related to the proposed conversion to a REIT was $(20) million, compared with $50 million for the same period in 2013. This change was primarily due to higher cash interest expense and the timing of payables. Capital expenditures in the first quarter (excluding $15 million of real estate and $2 million of REIT-related capital expenditures), totaled $47 million, or 6.1% of revenues. The company’s liquidity position remains strong with availability of $556 million and a net total lease adjusted leverage ratio of 5.1x at quarter end, as compared to a maximum allowable ratio of 6.5x. The calculation for this ratio is net debt including the capitalized value of lease obligations divided by EBITDAR as defined in the company’s credit agreement.
On March 14, 2014, Iron Mountain’s board of directors declared a quarterly cash dividend of $0.27 per share for stockholders of record as of March 25, 2014, which was paid on April 15, 2014.
Iron Mountain’s conference call to discuss its first quarter 2014 financial results will be held today at 8:30 a.m. Eastern Time. 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, replays of the conference call and related transcript will be available on the Web site for future reference.
About Iron Mountain
Iron Mountain Incorporated (NYSE: IRM) is a leading provider of storage and information management services. The company’s real estate network of more than 67 million square feet across more than 1,000 facilities in 36 countries allows it to serve customers around the world. And its solutions for records management, data management, document management, and secure shredding help organizations to lower storage costs, comply with regulations, recover from disaster, and better use their information. Founded in 1951, Iron Mountain stores and protects billions of information assets, including business documents, backup tapes, electronic files and medical data. Visit www.ironmountain.com for more information.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and is subject to the safe-harbor created by such Act. Forward-looking statements include our statements regarding our operations, economic performance, financial condition, goals, beliefs, future growth strategies, investment objectives, plans and current expectations, such as projected revenues from our emerging market acquisition pipeline. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. Important factors that could cause actual results to differ from our other expectations include, among others: (i) the cost to comply with current and future laws, regulations and customer demands relating to privacy issues; (ii) the impact of litigation or disputes that may arise in connection with incidents in which we fail to protect our customers' information; (iii) changes in the price for our storage and information management services relative to the cost of providing such storage and information management services; (iv) changes in customer preferences and demand for our storage and information management services; (v) the adoption of alternative technologies and shifts by our customers to storage of data through non-paper based technologies; (vi) the cost or potential liabilities associated with real estate necessary for our business; (vii) the performance of business partners upon whom we depend for technical assistance or management expertise outside the U.S.; (viii) changes in the political and economic environments in the countries in which our international subsidiaries operate; (ix) claims that our technology violates the intellectual property rights of a third party; (x) changes in the cost of our debt; (xi) the impact of alternative, more attractive investments on dividends; (xii) our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently; (xiii) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xiv) other risks described more fully in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2014 under “Item 1A. Risk Factors” and other documents that we file with the SEC from time to time. Except as required by law, we undertake 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.
We have presented in this earnings release financial data (Adjusted OIBDA, Adjusted OIBDA Margin %, Adjusted EPS and FCF that exclude certain costs associated with the company’s 2011 proxy contest, the previous work of the former Strategic Review Special Committee of the board of directors and the company’s proposed REIT conversion (collectively, REIT Costs). We believe the adjusted data provides meaningful supplemental information regarding the company’s operating results primarily because they exclude amounts we do not consider part of ongoing operating results when planning, forecasting and assessing the performance of the organization or our individual operating segments. We believe that the adjusted data also facilitates the comparison by management and investors of results for current periods and guidance for future periods with results for past periods.
Selected Financial Data:
|(dollars in millions, except per share data)||Q1/2013||Q1/2014||Inc (Dec)|
|Gross Profit (excluding D&A)||$||426||$||435||2.1||%|
|Gross Margin %||57.0||%||56.5||%|
|Adjusted OIBDA Margin %||30.5||%||29.7||%|
|Interest Expense, net||$||63||$||62||(1.4||)%|
|Income from Continuing Operations||$||18||$||43||132.8||%|
|Adj. EPS from Continuing Operations – FD||$||0.27||$||0.26||(3.7||)%|
We have presented supplemental non-GAAP financial measures as part of this earnings release. Reconciliations of each supplemental non-GAAP measure to its most comparable GAAP measure is presented below and available at the Investor Relations page at www.ironmountain.com under “Supplemental Data.” This presentation of non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the most directly comparable GAAP measures. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding the company’s operating results primarily because they exclude amounts we do not consider part of ongoing operating results when planning and forecasting and assessing the performance of the organization or our individual operating segments. We believe that our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods.
Adjusted Operating Income Before Depreciation, Amortization, Intangible Impairments, (Gain) Loss on Disposal/Write-down of Property, Plant and Equipment, Net and REIT Costs, or Adjusted OIBDA
Adjusted OIBDA is defined as operating income before depreciation, amortization, intangible impairments, (gain) loss on disposal/write-down of property, plant and equipment, net, and REIT Costs. Adjusted OIBDA Margin is calculated by dividing Adjusted OIBDA by total revenues. These measures are an integral part of the internal reporting system we use to assess and evaluate the operating performance of our business. We use multiples of current or projected Adjusted OIBDA in conjunction with our discounted cash flow models to determine our overall enterprise valuation and to evaluate acquisition targets. We believe Adjusted OIBDA and Adjusted OIBDA Margin provide our current and potential investors with relevant and useful information regarding our ability to generate cash flow to support business investment.
Adjusted Earnings Per Share from Continuing Operations, or Adjusted EPS
Adjusted EPS is defined as reported earnings per share from continuing operations excluding: (1) (gain) loss on the disposal/write-down of property, plant and equipment, net; (2) intangible impairments; (3) other (income) expense, net; (4) REIT Costs; and (5) the tax impact of reconciling items and discrete tax items. We do not believe these excluded items to be indicative of our ongoing operating results, and they are not considered when we are forecasting our future results. We believe Adjusted EPS is of value to our current and potential investors when comparing our results from past, present and future periods.
Free Cash Flows before Acquisitions and Discretionary Investments, or FCF
FCF is defined as Cash Flows from Operating Activities from continuing operations less capital expenditures (excluding real estate and capital expenditures associated with the REIT conversion), net of proceeds from the sales of property and equipment and other, net, and additions to customer relationship and acquisition costs. REIT Costs are also excluded from FCF. Our management uses this measure when evaluating the operating performance of our consolidated business. We believe this measure provides relevant and useful information to our current and potential investors. FCF is a useful measure in determining our ability to generate excess cash that may be used for reinvestment in the business, discretionary deployment in investments such as real estate or acquisition opportunities, returning of capital to our stockholders and voluntary prepayments of indebtedness.
Following are reconciliations of the above-described measures to the most directly comparable GAAP measures. Columns may not foot due to rounding.
Operating Income reconciled to Adjusted OIBDA (in millions):
|Three Months Ended March 31,|
|Add: Depreciation & Amortization||80||86|
|Gain on disposal/write-down of PP&E, net||(1||)||(8||)|
Reported EPS from Continuing Operations – Fully Diluted reconciled to Adjusted EPS from Continuing Operations – Fully Diluted:
|Three Months Ended March 31,|
|Reported EPS from Continuing Operations – FD||$||0.10||$||0.22|
|Add: Loss (gain) on disposal/write-down of PP&E, net||--||(0.04||)|
|Other Expense, net||0.01||0.03|
|Tax impact of reconciling items and discrete tax items||0.03||--|
|Adjusted EPS from Continuing Operations – FD||$||0.27||$||0.26|
|Weighted average common shares outstanding – FD (000s)||192,110||193,069|
FCF reconciled to Cash Flows from Operating Activities from Continuing Operations (in millions):
Three Months Ended
|Cash Flows from Operating Activities from Continuing Operations||$||106||$||
|Less: Capital Expenditures (excluding real estate), net||75||75|
Additions to Customer Acquisition Costs
|Add: REIT Conversion Costs, net of tax||18||5|
|REIT Conversion Capital Expenditures||6||2|
|FCF Before Acquisitions and Discretionary Items||$||50||$||(20||)|
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands except Per Share Data)
Three Months Ended
|Cost of Sales (Excluding Depreciation and Amortization)||321,076||335,145|
|Selling, General and Administrative||223,451||214,780|
|Depreciation and Amortization||80,201||86,433|
Gain on Disposal/Write-down of Property, Plant and
|Total Operating Expenses||624,189||628,051|
|INTEREST EXPENSE, NET||63,182||62,312|
|OTHER EXPENSE, NET||2,739||5,317|
|Income from Continuing Operations before Provision|
|for Income Taxes||56,921||74,446|
|PROVISION FOR INCOME TAXES||38,571||31,725|
|INCOME FROM CONTINUING OPERATIONS||18,350||42,721|
|INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX||2,184||(612||)|
Less: Net Income Attributable to Noncontrolling
|Net Income Attributable to Iron Mountain Incorporated||$||19,386||$||41,667|
|EARNINGS (LOSSES) PER SHARE – BASIC:|
|INCOME FROM CONTINUING OPERATIONS||$||0.10||$||0.22|
|TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS||$||0.01||$||-|
|Net Income Attributable to Iron Mountain Incorporated||$||0.10||$||0.22|
|EARNINGS (LOSSES) PER SHARE – DILUTED:|
|INCOME FROM CONTINUING OPERATIONS||$||0.10||$||0.22|
|TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS||$||0.01||$||-|
|Net Income Attributable to Iron Mountain Incorporated||$||0.10||$||0.22|
|DIVIDENDS DECLARED PER COMMON SHARE||$||0.2700||$||0.2700|
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC||190,213||191,879|
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – DILUTED||192,110||193,069|
|Adjusted Operating Income before Depreciation and Amortization||$||227,476||$||228,524|
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
|Cash and Cash Equivalents||$||120,526||$||169,906|
Accounts Receivable (less allowances of $34,645
and $35,544, respectively)
|Other Current Assets||162,424||157,747|
|Total Current Assets||933,607||987,629|
|PROPERTY, PLANT AND EQUIPMENT:|
|Property, Plant and Equipment at Cost||4,631,067||4,642,183|
|Less: Accumulated Depreciation||(2,052,807||)||(2,080,397||)|
|Property, Plant and Equipment, net||2,578,260||2,561,786|
|Other Non-current Assets, net||_ _ 677,786||_ _ 691,201|
|Total Other Assets||3,141,138||3,157,202|
|LIABILITIES AND EQUITY|
|Current Portion of Long-term Debt||$||52,583||$||55,084|
|Other Current Liabilities||906,518||812,766|
|Total Current Liabilities||959,101||867,850|
|LONG-TERM DEBT, NET OF CURRENT PORTION||4,119,139||4,288,605|
|OTHER LONG-TERM LIABILITIES||516,931||498,991|
COMMITMENTS AND CONTINGENCIES
|TOTAL IRON MOUNTAIN INCORPORATED STOCKHOLDERS’ EQUITY||1,047,338||1,042,818|
|Total Liabilities and Equity||$||6,653,005||$||6,706,617|
In today's application economy, enterprise organizations realize that it's their applications that are the heart and soul of their business. If their application users have a bad experience, their revenue and reputation are at stake. In his session at 15th Cloud Expo, Anand Akela, Senior Director of Product Marketing for Application Performance Management at CA Technologies, discussed how a user-centric Application Performance Management solution can help inspire your users with every applicati...
May. 29, 2015 04:00 AM EDT Reads: 4,770
As enterprises engage with Big Data technologies to develop applications needed to meet operational demands, new computation fabrics are continually being introduced. To leverage these new innovations, organizations are sacrificing market opportunities to gain expertise in learning new systems. In his session at Big Data Expo, Supreet Oberoi, Vice President of Field Engineering at Concurrent, Inc., discussed how to leverage existing infrastructure and investments and future-proof them against e...
May. 29, 2015 03:00 AM EDT Reads: 3,191
The consumption economy is here and so are cloud applications and solutions that offer more than subscription and flat fee models and at the same time are available on a pure consumption model, which not only reduces IT spend but also lowers infrastructure costs, and offers ease of use and availability. In their session at 15th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed this shifting dynamic with an ...
May. 29, 2015 02:00 AM EDT Reads: 3,253
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackI...
May. 29, 2015 01:00 AM EDT Reads: 4,570
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT transformation?
May. 29, 2015 12:00 AM EDT Reads: 4,297
You use an agile process; your goal is to make your organization more agile. But what about your data infrastructure? The truth is, today's databases are anything but agile - they are effectively static repositories that are cumbersome to work with, difficult to change, and cannot keep pace with application demands. Performance suffers as a result, and it takes far longer than it should to deliver new features and capabilities needed to make your organization competitive. As your application an...
May. 29, 2015 12:00 AM EDT Reads: 3,501
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises a...
May. 28, 2015 11:15 PM EDT Reads: 2,236
The recent trends like cloud computing, social, mobile and Internet of Things are forcing enterprises to modernize in order to compete in the competitive globalized markets. However, enterprises are approaching newer technologies with a more silo-ed way, gaining only sub optimal benefits. The Modern Enterprise model is presented as a newer way to think of enterprise IT, which takes a more holistic approach to embracing modern technologies.
May. 28, 2015 11:00 PM EDT Reads: 6,041
SYS-CON Events announced today that SUSE, a pioneer in open source software, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. SUSE provides reliable, interoperable Linux, cloud infrastructure and storage solutions that give enterprises greater control and flexibility. More than 20 years of engineering excellence, exceptional service and an unrivaled partner ecosystem power the products and support that help ...
May. 28, 2015 10:30 PM EDT Reads: 605
Move from reactive to proactive cloud management in a heterogeneous cloud infrastructure. In his session at 16th Cloud Expo, Manoj Khabe, Innovative Solution-Focused Transformation Leader at Vicom Computer Services, Inc., will show how to replace a help desk-centric approach with an ITIL-based service model and service-centric CMDB that’s tightly integrated with an event and incident management platform. Learn how to expand the scope of operations management to service management. He will al...
May. 28, 2015 10:00 PM EDT Reads: 1,451
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impac...
May. 28, 2015 09:00 PM EDT Reads: 4,957
There's no doubt that the Internet of Things is driving the next wave of innovation. Google has spent billions over the past few months vacuuming up companies that specialize in smart appliances and machine learning. Already, Philips light bulbs, Audi automobiles, and Samsung washers and dryers can communicate with and be controlled from mobile devices. To take advantage of the opportunities the Internet of Things brings to your business, you'll want to start preparing now.
May. 28, 2015 07:00 PM EDT Reads: 5,818
In a world of ever-accelerating business cycles and fast-changing client expectations, the cloud increasingly serves as a growth engine and a path to new business models. Dynamic clouds enable businesses to continuously reinvent themselves, adapting their business processes, their service and software delivery and their operations to achieve speed-to-market and quick response to customer feedback. As the cloud evolves, the industry has multiple competing cloud technologies, offering on-premises ...
May. 28, 2015 06:00 PM EDT Reads: 4,014
As the world moves from DevOps to NoOps, application deployment to the cloud ought to become a lot simpler. However, applications have been architected with a much tighter coupling than it needs to be which makes deployment in different environments and migration between them harder. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, Netflix and so on is at the heart of CloudFoundry – a complete developer-oriented Platform as a Service (PaaS...
May. 28, 2015 05:00 PM EDT Reads: 1,661
T-Mobile has been transforming the wireless industry with its “Uncarrier” initiatives. Today as T-Mobile’s IT organization works to transform itself in a like manner, technical foundations built over the last couple of years are now key to their drive for more Agile delivery practices. In his session at DevOps Summit, Martin Krienke, Sr Development Manager at T-Mobile, will discuss where they started their Continuous Delivery journey, where they are today, and where they are going in an effort ...
May. 28, 2015 04:45 PM EDT Reads: 1,427