Iron Mountain Incorporated (NYSE: IRM), the information management company, today reported solid results for its second quarter ended June 30, 2012 including total revenues of $752 million, Adjusted OIBDA of $236 million (31.3% of revenues) and Adjusted EPS of $0.35 per share ($0.24 GAAP EPS from continuing operations). Consistent operating performance including 6% constant dollar (C$) storage rental revenue growth and 150 basis points of Adjusted OIBDA margin improvement in the International Business segment were key drivers of performance in the quarter. The Company reported strong operating 1 results including Adjusted OIBDA of $239 million and Adjusted EPS of $0.36 per share excluding $3 million of certain costs and expenditures associated the Strategic Review Special Committee of the Board of Directors (Special Committee) and the Company’s proposed conversion to a real estate investment trust (REIT).
“This was another good quarter for Iron Mountain and we are on track to achieve our full year objectives. The organization continues to perform well and deliver consistent, solid operating results. Even in a slow growth economy, we achieved 6% C$ storage rental growth comprised of 4% internal growth and the balance from recent acquisitions. Most of these acquisitions were in international expansion markets, consistent with our long-term strategy,” said Richard Reese, Iron Mountain’s Chairman and Chief Executive Officer. “We advanced our work to pursue conversion to a REIT with the filing of requests for private letter rulings with the Internal Revenue Service.”
The remaining discussion in this press release of the Company’s results refers to its operating 1 results excluding certain costs and expenditures as described above. Unless otherwise indicated, growth rates will be presented on a C$ basis. See Appendix A.
Iron Mountain’s second quarter 2012 operating results met expectations reflecting consistent underlying business trends. Total revenue for the quarter increased 2% C$ compared to the same prior year period, driven by strong 6% C$ growth in storage rental revenues. Service revenues, excluding paper revenues, were flat to the same prior year period. A 37% year-over-year decline in average recycled paper prices reduced total revenue growth by approximately 1.5% in the quarter. Foreign currency rate changes reduced total reported revenues by approximately 3% from 2% C$ to (1)% on a reported basis. Adjusted OIBDA margin (31.8%) increased 40 basis points in the second quarter of 2012 compared to the same prior year period, driven by profit gains in the International Business segment and corporate overhead efficiency initiatives. Adjusted EPS for the quarter increased 9% year-over-year to $0.36 based on fewer shares outstanding compared to the same prior year period.
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