Iron Mountain (IRM) Tops Q2 EPS by 5c, Beats on Revenues; Affirms FY18 Guidance

Iron Mountain (NYSE: IRM) reported Q2 EPS of $0.30, $0.05 better than the analyst estimate of $0.25. Revenue for the quarter came in at $1.06 billion versus the consensus estimate of $1.04 billion.

Financial Performance Highlights for the Second Quarter and Year-to-date 2018

Total reported Revenues for the second quarter were $1,061 million in 2018, compared with $950 million in 2017. On a constant dollar (C$) basis, Total Revenues grew 10.8% compared to the prior year, reflecting a full quarter of results from recent data center acquisitions not included in the 2017 period. Year to date, Total reported Revenues were $2.10 billion, compared with $1.89 billion in 2017, an increase of 9.4% on a C$ basis.
Income from Continuing Operations for the second quarter was $94 million, compared with $83 million in the second quarter of 2017. Income from Continuing Operations included $10 million of significant acquisition costs in the second quarter of 2018, compared with $20 million in the second quarter of 2017. Year to date, Income from Continuing Operations was $140 million, compared with $142 million in 2017, with significant acquisition costs of $29 million in 2018 and $41 million in 2017.
On a reported dollar basis, Adjusted EBITDA for the second quarter was $369 million, compared with $318 million in 2017. On a C$ basis, Adjusted EBITDA increased by 14.8% reflecting the data center acquisitions noted above, and higher margins associated with cost synergies resulting from the Recall acquisition as well as the company\'s Transformation Initiative. Year to date, Adjusted EBITDA was $712 million, compared with $611 million in 2017, an increase of 14.4% on a C$ basis.
Reported EPS - Fully Diluted from Continuing Operations for the second quarter was $0.33 compared with $0.30 for the second quarter of 2017. Year to date, Reported EPS - Fully Diluted from Continuing Operations was $0.49 compared with $0.53 in 2017. Reported EPS in 2018 was impacted by increased interest, depreciation and amortization expense related to the recent data center acquisitions, while reported EPS in 2017 included a gain on sale of the company\'s business in Russia and Ukraine.
Adjusted EPS for the second quarter was $0.30, flat compared with $0.30 in 2017. Adjusted EPS for the second quarter of 2018 reflects a structural tax rate of 21.8%, compared with a structural tax rate of 21.3% in 2017. Year to date, Adjusted EPS was $0.54, flat compared with $0.54 in 2017.
Net Income for the second quarter was $94 million compared with $81 million in 2017, reflecting impacts from the data center acquisitions noted above. Year to date, Net Income was $139 million compared with $140 million in 2017.
FFO (Normalized) per share was $0.56 for the second quarter, compared with $0.55 in 2017. Year to date, FFO (Normalized) per share was $1.05, compared with $1.03 in 2017.
AFFO was $230 million for the second quarter compared with $217 million in 2017, an increase of 5.8%. Year to date, AFFO was $451 million, compared with $388 million in 2017.

Guidance

The company maintained its 2018 full year guidance. The Company expects, on a constant dollar basis, Revenue growth of 7% to 9%, Adjusted EBITDA growth of 12% to 16% and AFFO growth of 5% to 13% for full year 2018. Guidance details are available on Page 6 of supplemental financial information.

For earnings history and earnings-related data on Iron Mountain (IRM) click here.

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