|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|
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Sep. 24, 2016 04:30 PM EDT Reads: 1,661
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 24, 2016 04:30 PM EDT Reads: 1,473
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Sep. 24, 2016 04:15 PM EDT Reads: 1,527
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
Sep. 24, 2016 04:00 PM EDT Reads: 1,477
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 24, 2016 03:45 PM EDT Reads: 1,396
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Sep. 24, 2016 03:00 PM EDT Reads: 1,012
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
Sep. 24, 2016 02:15 PM EDT Reads: 1,178
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
Sep. 24, 2016 02:00 PM EDT Reads: 1,615
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Sep. 24, 2016 01:30 PM EDT Reads: 1,667
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 24, 2016 01:00 PM EDT Reads: 1,466
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 24, 2016 12:00 PM EDT Reads: 724
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Sep. 24, 2016 12:00 PM EDT Reads: 722
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
Sep. 24, 2016 11:45 AM EDT Reads: 1,014
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Sep. 24, 2016 11:15 AM EDT Reads: 1,444
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captu...
Sep. 24, 2016 11:00 AM EDT Reads: 940