Iron Mountain (IRM) Reports In-Line Q4 EPS, Revenues In-Line; Offers FY19 EPS/Revenue Mid-Point Guidance Below Consensus

Iron Mountain (NYSE: IRM) reported Q4 EPS of $0.25, in-line with the analyst estimate of $0.25. Revenue for the quarter came in at $1.06 billion versus the consensus estimate of $1.06 billion.

• Total reported Revenues for the fourth quarter were $1,061 million, compared with $991 million in the fourth quarter of 2017. Excluding the impact of foreign exchange (FX), Total reported Revenues grew 9.9% compared to the prior year, reflecting the contribution from recent data center acquisitions not included in the full 2017 period. For full year 2018, Total reported Revenues were $4.23 billion, compared with $3.85 billion in 2017, an increase of 10.2% excluding the impact of FX.
• Income from Continuing Operations for the fourth quarter was $159 million, compared with $24 million in the fourth quarter of 2017. Income from Continuing Operations included $12 million of significant acquisition costs in the fourth quarter of 2018, compared with $26 million in the fourth quarter of 2017. In addition, Income from Continuing Operations in the fourth quarter of 2017 included a $30 million debt extinguishment charge associated with refinancing of the company\'s indebtedness. For full year 2018, Income from Continuing Operations was $377 million, compared with $192 million in 2017, with significant acquisition costs of $51 million in 2018 and $85 million in 2017.
• Adjusted EBITDA for the fourth quarter was $360 million, compared with $327 million in the fourth quarter of 2017. Excluding the impact of FX, Adjusted EBITDA increased by 12.3% reflecting the data center acquisitions noted above, flow through from revenue management, improvement in Service margins, and cost synergies resulting from the Recall acquisition. For full year 2018, Adjusted EBITDA was $1.44 billion, compared with $1.26 billion in 2017, an increase of 14.0% excluding the impact of FX.
• Reported EPS - Fully Diluted from Continuing Operations for the fourth quarter was $0.55 compared with $0.09 in the fourth quarter of 2017. For full year 2018, Reported EPS - Fully Diluted from Continuing Operations was $1.31 compared with $0.71 in 2017. Reported EPS in 2018 was impacted by gains from real estate capital recycling, and increased interest and depreciation and amortization expense related to the recent data center acquisitions, while reported EPS in 2017 included the debt extinguishment charge noted above.
• Adjusted EPS for the fourth quarter was $0.25, compared with $0.29 in the fourth quarter of 2017. For full year 2018, Adjusted EPS was $1.10, compared with $1.16 in 2017. Adjusted EPS for the fourth quarter and full year 2017 reflects an amortization charge of approximately $0.02 per share associated with an adjustment to Recall customer relationship value. Prior to the amortization adjustment, Adjusted EPS for the fourth quarter and full year 2017 would have been $0.31 and $1.18, respectively. In addition, Adjusted EPS reflects a structural tax rate of 18.2%, compared with 19.7% in 2017.
• Net Income for the fourth quarter was $159 million compared with $21 million in the fourth quarter of 2017. For full year 2018, Net Income was $365 million compared with $185 million in 2017.
• FFO (Normalized) per share was $0.56 for the fourth quarter, compared with $0.53 in the fourth quarter of 2017. For full year 2018, FFO (Normalized) per share was $2.30, compared with $2.13 in 2017.
• AFFO was $194 million for the fourth quarter compared with $154 million in the fourth quarter of 2017, an increase of 25.9%. For full year 2018, AFFO increased 16.2% to $874 million, compared with $752 million in 2017.

GUIDANCE:

Iron Mountain sees FY2019 EPS of $1.08-$1.18, versus the consensus of $1.14. Iron Mountain sees FY2019 revenue of $4.2-4.4 billion, versus the consensus of $4.38 billion.

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

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