Iron Mountain (IRM) Tops Q1 EPS by 9c

Iron Mountain (NYSE: IRM) reported Q1 EPS of $0.27, $0.09 better than the analyst estimate of $0.18. Revenue for the quarter came in at $1.07 billion versus the consensus estimate of $1.08 billion.

Financial Performance Highlights for the First Quarter of 2020

• Total reported Revenues for the first quarter were $1.07 billion, compared with $1.05 billion in the first quarter of 2019. Excluding the impact of foreign exchange, total reported Revenues grew 3.2% compared to the prior year, reflecting solid growth trends in the Global Data Center and Global Records and Information Management segments, as well as benefits from revenue management.
• Income from Continuing Operations for the first quarter was $64.9 million, compared with $30.5 million in the first quarter of 2019. Income from Continuing Operations in the first quarter of 2020 included Restructuring Charges of $41.0 million associated with the implementation of Project Summit and an Intangible Impairment charge of $23.0 million related to the writedown of goodwill associated with the Fine Arts business. Income from Continuing Operations included $2.7 million of Significant Acquisition Costs in the first quarter of 2019.
• Adjusted EBITDA for the first quarter was $363.1 million, compared with $324.5 million in the first quarter of 2019. On a constant currency basis, Adjusted EBITDA increased by 13.7%, driven in part by lower overhead costs, benefits from Project Summit, and the flow through from revenue management.
• Reported EPS - Fully Diluted from Continuing Operations for the first quarter was $0.22, compared with $0.10 in the first quarter of 2019.
• Adjusted EPS for the first quarter was $0.27, compared with $0.17 in the first quarter of 2019.
• Net Income for the first quarter was $64.9 million compared with $30.5 million in the first quarter of 2019. Net Income in the first quarter of 2020 included the aforementioned Restructuring Charges related to Project Summit and the Intangible Impairment charge, as well as Foreign Currency Transaction Gains of $37.4 million.
• FFO (Normalized) per share was $0.59 for the first quarter, compared with $0.48 in the first quarter of 2019, or an increase of 22.9%.
• AFFO was $231.2 million for the first quarter, representing the highest quarterly level, compared with $193.4 million in the first quarter of 2019, an increase of 19.6%.

"We are operating in unprecedented times due to the COVID-19 pandemic," said William L. Meaney, president and CEO of Iron Mountain. "Right now, our top priority is to ensure the safety and well-being of our Mountaineers, their families and ones they come in contact with - all whilst continuing to safely serve our customers around the world. As a global business, we have been assessing the situation and implementing extensive precautionary measures since first learning about the virus. Whilst the pandemic is continuing to evolve at a rapid pace, we are closely monitoring the situation and working to minimize the spread of the virus and limit its impact on our people, customers, business and operations. Given the extreme level of economic uncertainty and lack of visibility, we believe the most prudent course of action is to withdraw our 2020 guidance until the economic environment stabilizes. I am confident that the underlying strength of our business model remains intact, and that we will get through this and come out of it an even stronger company."

Meaney commented on the results, "We delivered very strong performance in the first quarter, with year-over-year growth in organic revenue, Adjusted EBITDA, Adjusted EPS and AFFO. Importantly, the swift and decisive actions we executed in Q4 as part of Project Summit delivered Adjusted EBITDA benefits above our expectations. Our core Global Records and Information Management business continues to demonstrate durability, with organic storage rental revenue growth of 2.1%, and a 230 basis point expansion in Adjusted EBITDA margin. As we have mentioned before, our team is focused on driving AFFO and we are pleased to report a new all-time high, demonstrating the strength of our business model. Our Global Data Center Business had a strong Q1, with organic revenue growth of nearly 10%. We signed 6.4 megawatts of new and expansion leases, and our pipeline remains robust. Additionally, in light of the current environment and the strong start to Project Summit, we have identified additional opportunities to expand the program, and expect to be able to achieve higher levels of Adjusted EBITDA benefit than we initially expected."

Guidance

In light of the uncertain operating environment, Iron Mountain has withdrawn its previously provided 2020 guidance, including for Revenue, Adjusted EBITDA, Adjusted EPS, and AFFO.

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

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