Full Year Net Income increases 32%; Achieves record quarterly and annual Revenue, AFFO and Adjusted EBITDA
Issues Full Year 2022 Guidance; Growth at midpoint of 16% Revenue and 12% Adjusted EBITDA
Iron Mountain Incorporated (NYSE: IRM), a global leader in innovative storage, data center infrastructure, asset lifecycle management and information management services, announces record financial and operating results for the fourth quarter and full year 2021. 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.
“We are pleased to have delivered exceptional performance in the fourth quarter, marking a record year both in terms of revenue and profitability – in spite of COVID still impacting some of our traditional services. This record result is reflective of our expanding and broad offerings, continued resiliency in our storage businesses, deep customer relationships, and strength of our team,” said William L. Meaney, President and CEO of Iron Mountain. “Despite the challenges associated with the pandemic, our Mountaineers around the world have continued to put our customers first. This customer-first mindset has delivered accelerated growth for our company as a result of solving more and more of our customers’ critical issues linked to their digital transformation and asset protection initiatives. As we look ahead, we have never been more confident in our ability to continue to create meaningful value for our customers and our shareholders.”
Financial Performance Highlights for the Fourth Quarter and Full Year 2021
- Total reported Revenues for the fourth quarter were $1.16 billion, compared with $1.06 billion in the fourth quarter of 2020, an increase of 9.4%. Excluding the impact of foreign currency exchange (FX), total reported Revenues increased 9.9% compared to the prior year, driven by a 20.4% increase in Service revenue, while Storage rental revenue increased 4.5%. For the full year, total reported Revenues increased 8.3%, or 6.8%, excluding the impact of FX.
- Net Income for the fourth quarter was $61.5 million compared with $246.8 million in the fourth quarter of 2020. The following items were included in Net Income:
- Restructuring Charges of $76.7 million associated with the implementation of Project Summit in the fourth quarter of 2021 compared to $65.7 million in the fourth quarter of 2020.
- Gain on Disposal/Write-Down of PP&E, Net of $37.7 million in the fourth quarter of 2021 compared to $285.4 million in the fourth quarter of 2020, primarily related to the company’s capital recycling program.
- For the full year, Net Income was $452.7 million, compared with $343.1 million in 2020. The following items were included in the full year ended 2021 and 2020, respectively:
- Restructuring Charges of $206.4 million compared to $194.4 million.
- Intangible Impairment charge of $23.0 million related to the writedown of goodwill associated with the Fine Arts business in the first quarter of 2020.
- Gain on Disposal/Write-Down of PP&E, Net of $172.0 million compared to $363.5 million, primarily related to the company’s capital recycling program.
- Other Income, Net of $192.8 million, primarily related to a gain on sale from the divestment of the company’s Intellectual Property Management business, compared to Other Expense, Net of $143.5 million, primarily related to a debt extinguishment charge and foreign currency translation losses.
- Adjusted EBITDA for the fourth quarter was $430.7 million, compared with $374.2 million in the fourth quarter of 2020, an increase of 15.1%. On a constant currency basis, Adjusted EBITDA increased by 15.4%, driven by the strong increase in Service revenue and benefits from Project Summit. For the full year, Adjusted EBITDA was $1.635 billion, compared with $1.476 billion in full year 2020, an increase of 10.8%. On a constant currency basis, Adjusted EBITDA increased 9.1%.
- Reported EPS – Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated for the fourth quarter was $0.21, compared with $0.86 in the fourth quarter of 2020. For the full year, Reported EPS – Fully Diluted from Net Income (Loss) Attributable to Iron Mountain Incorporated was $1.55, compared with $1.19 in full year 2020.
- Adjusted EPS for the fourth quarter was $0.43, compared with $0.29 in the fourth quarter of 2020. Adjusted EPS reflects a structural tax rate of 17.7% and 15.1%, in the fourth quarters of 2021 and 2020, respectively. For the full year, Adjusted EPS was $1.51, compared with $1.19 in full year 2020.
- FFO (Normalized) per share was $0.74 for the fourth quarter, compared with $0.60 in the fourth quarter of 2020, an increase of 23.3%. For the full year, FFO (Normalized) per share was $2.76, compared with $2.42 in full year 2020, an increase of 14.0%.
- AFFO was $267.0 million for the fourth quarter, compared with $190.8 million in the fourth quarter of 2020, an increase of 40.0%, driven by improved EBITDA in 2021 and higher levels of recurring capital spend in the fourth quarter of 2020 as the Company caught up on delayed activities due to the pandemic. For the full year, AFFO was $1.012 billion, compared with $887.5 million in full year 2020, an increase of 14.0%.
- AFFO per share was $0.92 for the fourth quarter, compared with $0.66 in the fourth quarter of 2020, an increase of 38.7%, driven by improved EBITDA in 2021 and higher levels of recurring capital spend in the fourth quarter of 2020 as the Company caught up on delayed activities due to the pandemic. For the full year, AFFO per share was $3.48, compared with $3.07 in full year 2020, an increase of 13.4%.
- Global RIM business revenue increased 8.1% in the fourth quarter, or an 8.6% increase compared to the fourth quarter of 2020, excluding the impact of FX. For the full year, total revenue increased 7.5%, or 5.9%, excluding the impact of FX. Global RIM Adjusted EBITDA margin increased 160 basis points in the fourth quarter and 100 basis points for the full year as compared to 2020. Improved profitability was driven by revenue management, productivity and record volume levels.
- Global Data Center business revenue increased 24.7% in the fourth quarter, or a 25.3% increase compared to the fourth quarter of 2020, excluding the impact of FX. For the full year, total revenue increased 17.0%, or 16.2%, excluding the impact of FX. Iron Mountain executed 27 megawatts of new and expansion leases in the fourth quarter, bringing total new and expansion leasing activity to 49 megawatts for the full year 2021.
Dividend
On February 24, 2022, Iron Mountain’s Board of Directors declared a quarterly cash dividend of $0.6185 per share for the first quarter. The first-quarter 2022 dividend is payable on April 6, 2022, for shareholders of record on March 15, 2022.
Guidance
Iron Mountain issued full year 2022 guidance inclusive of closed transactions; details are summarized in the table below.
(1) Iron Mountain does not provide a reconciliation of non-GAAP measures that it discusses as part of its annual guidance or long term outlook because certain significant information required for such reconciliation is not available without unreasonable efforts or at all, including, most notably, the impact of exchange rates on Iron Mountain’s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, Iron Mountain does not believe that a reconciliation would be meaningful.
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