Iron Mountain Incorporated
(NYSE: IRM), the information storage and management company, today reported its operating results for the third quarter ended September 30, 2012. Total revenues were $748 million, down 2.6% compared to last year reflecting impacts of foreign currency exchange rate changes and lower recycled paper pricing. Adjusted OIBDA was $244 million and Adjusted EPS was $0.34 per share ($0.31 per share on a GAAP basis).
Third quarter operating results were in-line with internal expectations and the Company remains on-track to achieve its full-year financial objectives. The Company met its profit goals for the quarter and storage rental growth remained solid at 4.0% on a constant dollar (C$) basis. Revenue growth was (0.4)% C$ and Adjusted OIBDA growth was (2.5)% C$. Lower recycled paper prices reduced growth rates by 1.5% for revenue and 4.4% for Adjusted OIBDA. Unfavorable foreign currency rate changes reduced reported growth rates by approximately 2%. Business trends impacting core service revenues continued.
“Our underlying financial performance for the third quarter reflects the stability of our storage rental business and successful execution of our strategy. Storage rental is the primary driver of revenues, profits and cash flows for the Company and has grown solidly within a 3% to 5% C$ range since 2010 underscoring its durability,” said Richard Reese, Iron Mountain’s Chairman and Chief Executive Officer. “Reported results were negatively impacted by significantly lower recycled paper prices and weakened foreign currencies. Our organization is performing well and remains on-track towards achieving our financial targets for the year. Iron Mountain is a durable, high-return business with significant opportunities to grow cash flow for a very long time.”
Total revenue growth was supported by storage rental gains which provided a solid foundation for the overall financial performance. Global volume growth was 1.7% over last year driven by strong growth in the International Business segment. In North America aggregate net pricing increased approximately 2%. The storage rental gains were offset by service revenue declines of 6.0% C$ compared to last year. A 37% drop in recycled paper prices drove half of this decrease in service revenues with the balance resulting primarily from the impacts of consistent business trends on activity-based services, primarily in North America. Lower revenues from fuel surcharges and special projects were also contributing factors. Strong Document Management Solutions (DMS) gains helped mitigate pressure on service revenues.