BOSTON--(BUSINESS WIRE)--Iron Mountain Incorporated (NYSE: IRM), the storage and information management services company, announces financial and operating results for the third quarter of 2020. The conference call / webcast details, earnings call presentation and supplemental financial information, which includes definitions of certain capitalized terms used in this release, are available on Iron Mountain’s Investor Relations website. Reconciliations of non-GAAP measures to the appropriate GAAP measures are included herein.

“The third quarter provided us with a great opportunity to demonstrate the significance of the measures we have taken over the last few months in response to the pandemic, and set a marker of out-performance through top-line resilience in our physical storage business, Adjusted EBITDA margin expansion, and by maintaining our strong cash generation track record,” said William L. Meaney, president and CEO of Iron Mountain. "Despite lingering uncertainty related to the global COVID-19 pandemic, we are seeing improvement - albeit gradual - in key U.S. and international markets as it relates to our service activity levels whilst showing continued strong performance in both our physical storage business and our Global Data Center business. I continue to be inspired by the tireless efforts of our teams as they support and care for our customers, each other, and our communities, whilst accelerating progress on our strategic priorities."

Meaney commented on the results, “Adjusted EBITDA margins expanded 30 and 80 basis points year-over-year and sequentially, respectively. The strength for margin expansion performance is even more impactful in the context of the continued investments we are making in innovation and product development, as well as a slight top-line decline, driven entirely by our service business. I would like to thank all of our Mountaineers for this remarkable performance and for their steadfast focus on safety and execution. Whilst this has been a very difficult time, we are proving to be very resilient. We are financially healthy with strong and reliable cash flow, driven in part by our brand and customer loyalty. This is evident in how we've managed the heightened uncertainty of the past 8 months. We quickly aligned on the right mix of priorities to maintain strong near-term momentum whilst continuing our investments in innovation and new products as we execute our plan for long-term value creation. This, combined with benefits from Project Summit, has allowed us to continue to invest in transforming and modernizing our company. As demonstrated by our nine-month constant currency year-over-year Adjusted EBITDA and organic storage revenue growth, we can already see the evidence supporting our belief that we will emerge from this pandemic as a stronger company on all dimensions."

Financial Performance Highlights for the Third Quarter and Year-to-Date 2020

• Total reported Revenues for the third quarter were $1.04 billion, compared with $1.06 billion in the third quarter of 2019, a decrease of 2.4%. Excluding the impact of foreign currency exchange (FX), total reported Revenues declined 2.1% compared to the prior year, driven by a 12.2% decline in Service revenue, partially offset by a 3.8% increase in Storage revenue. Year to date, total reported Revenues decreased 3.0%, or 1.5%, excluding the impact of FX.
• Income from Continuing Operations for the third quarter was $38.6 million, compared with $108.3 million in the third quarter of 2019. Income from Continuing Operations in the third quarter of 2020 included Restructuring Charges of $48.4 million associated with the implementation of Project Summit and a debt extinguishment charge of $51.3 million related to the early extinguishment of several of the Company's Notes. Income from Continuing Operations included $4.0 million of Significant Acquisition Costs in the third quarter of 2019. Year to date, Income from Continuing Operations was $96.3 million, compared with $231.1 million in 2019. Income from Continuing Operations in 2020 included Restructuring Charges of $128.7 million and Income from Continuing Operations in 2019 included Significant Acquisition Costs of $8.6 million.
• Adjusted EBITDA for the third quarter was $370.0 million, compared with $375.7 million in the third quarter of 2019, a decrease of 1.5%, and includes direct and incremental costs related to COVID-19. On a constant currency basis, Adjusted EBITDA decreased by 1.3%, driven in part by the aforementioned decline in Service revenue, partially offset by the benefits of Project Summit and the flow through from revenue management. Year to date, Adjusted EBITDA was $1.08 billion, compared with $1.05 billion in 2019, an increase of 2.4%, and excludes $9.3 million of direct and incremental costs related to COVID-19 incurred in the second quarter, as previously disclosed. Excluding the impact of FX, Adjusted EBITDA increased 3.7% year to date.
• Reported EPS - Fully Diluted from Continuing Operations for the third quarter was $0.13, compared with $0.37 in the third quarter of 2019. Year to date, Reported EPS - Fully Diluted from Continuing Operations was $0.33, compared with $0.80 in 2019.
• Adjusted EPS for the third quarter was $0.31, compared with $0.32 in the third quarter of 2019. Year to date, Adjusted EPS was $0.80, compared with $0.71 in 2019. Iron Mountain's structural tax rate was 16.8% in the third quarter of 2020, compared with 18.6% in the third quarter of 2019.
• Net Income for the third quarter was $38.6 million compared with $108.3 million in the third quarter of 2019. Net Income in the third quarter of 2020 included the aforementioned Restructuring Charges related to Project Summit and debt extinguishment charge. Year to date, Net Income was $96.3 million compared with $231.2 million in 2019.
• FFO (Normalized) per share was $0.61 for the third quarter, compared with $0.62 in the third quarter of 2019, or a decrease of 1.5%. Year to date, FFO (Normalized) per share was $1.73, compared with $1.64 in 2019, an increase of 5.6%.
• AFFO was $213.1 million for the third quarter, compared with $225.3 million in the third quarter of 2019, a decrease of 5.4%. Year to date, AFFO was $693.8 million, compared with $628.3 million in 2019, an increase of 10.4%.

Project Summit Update

Iron Mountain now expects Project Summit will generate $165 million in Adjusted EBITDA benefits in 2020, an increase from the previous expectation of $150 million, as some initiatives have been accelerated. Iron Mountain expects to spend approximately $200 million in 2020. There is no change to the overall scope and size of the total program. Iron Mountain continues to expect Project Summit to generate $375 million of Adjusted EBITDA benefits exiting 2021, with a cost to implement of approximately $450 million.

Dividend

On November 4, 2020, Iron Mountain's board of directors declared a quarterly cash dividend of $0.6185 per share for the fourth quarter. The fourth-quarter 2020 dividend is payable on January 6, 2021, for shareholders of record on December 15, 2020.

About Iron Mountain

Iron Mountain Incorporated (NYSE: IRM), founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 90 million square feet across approximately 1,450 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include secure records storage, information management, digital transformation, secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working. Visit www.ironmountain.com for more information.