Iron Mountain Inc.
) reported first quarter 2013 adjusted earnings per share from
continuing operations of 27 cents, in line with the Zacks
Consensus Estimate. Reported earnings in the quarter slumped 6.9%
from the year-ago quarter due to sluggish revenue and higher
Revenues for the quarter inched up 0.1% from the year-ago
quarter to $747.0 million. Reported revenues lagged the Zacks
Consensus Estimate of $763.0 million. Revenues for the quarter
were impacted by lower service revenues (down 5.2% year over
year). Revenues from storage increased 4% on a year-over-year
Iron Mountain's revenues were primarily driven by Document
Management Solutions segment and Global storage rental internal
growth. Moreover, increase in international storage rental
volumes (up 13.5% year over year) helped Global storage volume
growth of 2.8% from the year-ago period. These factors offset
Iron Mountain's revenue declines in its core service segment
(developed markets) and lower revenues from its shredding
services in its International Business segment.
Adjusted OIBDA increased 2.2% year over year to $227 million.
Adjusted OIBDA margin expanded 70 basis points on a
year-over-year basis to 30.5% based on international profit,
overhead cost controls in North America and a decline in
Operating income in the quarter decreased 13.4% from the
year-ago quarter to $122.8 million, primarily due to higher
operating expenses (up 4.7% year over year). Net income from
continuing operations was $18.4 million versus $61.1 million
earned in the previous-year quarter.
Iron Mountain exited the quarter with cash and cash
equivalents of $229.9 million compared with $243.4 million at the
end of the previous quarter. Long-term debt (including the
current portion) was $3.85 billion.
Iron Mountain reiterated its fiscal 2013 guidance. For fiscal
2013, Iron Mountain expects revenues in the range of $3.02
billion to $3.10 billion. The company forecasts adjusted OIBDA
between $905.0 million and $935.0 million. Iron Mountain expects
earnings per share in the range of $1.13 to $1.24.
The company expects to spend approximately $290 million on
capital assets. Free cash flow is expected in the range of $320
million to $360 million for fiscal 2013.
We believe that Iron Mountain's strong product portfolio,
increasing market share and promising international business are
the primary growth catalysts for the company. The company's
decision to convert to REIT to reduce tax burden and increase
shareholders value are the other positives. Moreover, the
company's entry into the data center market could act as a
positive factor going forward.
However, costs related to the conversion and fluctuations in
recycled paper prices are the near-term headwinds for the
company. Moreover, volatile foreign exchange rates and
Hertz Global Holdings
Pitney Bowes Inc
Guidance Software Inc
) are the other headwinds.
Currently, Iron Mountain has a Zacks Rank #4 (Sell).
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