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Iron Mountain Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 11, 2004
Period End
December 31, 2003
Security
IRM
In the record · 2016–202610-K1110-Q328-K133

IRM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 133 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Mar ’18Mar ’18
  2. Leadership change8-K · Dec ’19Dec ’19
  3. Material agreement8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed March 11, 2004. Cited figures are marked; the original filing is the authoritative source.

Iron Mountain Incorporated's 2003 Form 10-K reports total revenues of $1.50 billiona for the year ended December 31, 2003, up 13.9% from $1.32 billion in 2002, with internal revenue growth of 6%.

Storage revenues rose 15.2% to $875.0 millionb and service and storage material sales rose 12.0% to $626.3 million. Operating income increased 20.7% to $304.9 million, OIBDA rose 20.5% to $435.8 million (29.0% of revenues), and net income increased 45.2% to $84.6 million, or $0.98 per diluted share. Results were supported by the July 2003 acquisition of the records management operations of Hays plc (Hays IMS), which cost about $333 million and was split between the company and its European joint venture, Iron Mountain Europe (IME).

Leverage and capital structure are the main investor considerations. Long-term debt was $2.09 billionc at year-end 2003, up from $1.73 billion, and the company describes itself as highly leveraged. Its key bond leverage ratio rose to 5.0 from 4.8, and the company states that it was in compliance with all material debt covenants.

Subsequent to year-end, the company issued 150 million British pounds of 7 1/4% notes in January 2004 and used the proceeds to buy Mentmore plc's 49.9% stake in IME for 82.5 million pounds, giving it full ownership of IME. The company paid no common dividends in the last two years, and its credit agreement limits dividends and stock repurchases. The filing also discloses ongoing litigation, most notably the Sequedex competitor dispute, in which Sequedex's counterclaims seek compensatory damages of approximately $59 milliond plus $6.6 million of pre-judgment interest, with a trial scheduled for April 2004.

The South Brunswick fire lawsuits from 1997 also remain pending. Management does not believe the outcome of these proceedings will have a material adverse effect on financial condition or results of operations.

02—Key points

Key Highlights

  1. Total revenues rose 13.9% to $1.50 billion in 2003, with internal revenue growth of 6%.
  2. Operating income increased 20.7% to $304.9 million, and OIBDA increased 20.5% to $435.8 million, a 29.0% margin.
  3. Net income increased 45.2% to $84.6 million, or $0.98 per diluted share.
  4. Long-term debt increased to $2.09 billion at year-end 2003; the key bond leverage ratio rose to 5.0 from 4.8.
  5. The July 2003 Hays IMS acquisition cost approximately $333 million; in February 2004 the company bought Mentmore's 49.9% stake in IME for 82.5 million pounds sterling ($154 million), giving full ownership.
  6. Storage revenues, which the company says have been about 58% of total revenues in each of the last five years, grew 15.2% to $875.0 million.
  7. Sequedex litigation involves counterclaims with a trial scheduled for April 2004; management does not expect a material adverse effect.

03—Questions

Frequently Asked Questions

  1. How did Iron Mountain perform financially in 2003?

    Total revenues were $1.50 billion, up 13.9%. Operating income rose 20.7% to $304.9 million, and net income rose 45.2% to $84.6 million, or $0.98 per diluted share. OIBDA was $435.8 million, or 29.0% of revenues.

  2. How much debt does the company carry, and how leveraged is it?

    Long-term debt was $2.09 billion at December 31, 2003, up from $1.73 billion a year earlier. The company says it is highly leveraged and expects to remain so. Its key bond leverage ratio was 5.0, compared with a target range of 4.5 to 5.5 and a maximum of 6.5 allowed under the bond indentures.

  3. What were the major acquisitions and how were they financed?

    The Hays IMS acquisition, completed in July 2003, cost about $333 million. The company initially financed the European portion through IME using cash and revolver borrowings, then funded much of the cost with 6 5/8% senior subordinated notes. In early 2004 the company acquired Mentmore's 49.9% interest in IME for 82.5 million pounds sterling ($154 million), funded by 7 1/4% notes issued in January 2004.

  4. Does the company pay dividends?

    No. The company has not paid dividends on its common stock in the last two years. Future dividends depend on financial condition, results and business requirements, and the Amended and Restated Credit Agreement limits both cash dividends and stock repurchases.

  5. What are the main legal risks disclosed?

    The company discloses litigation with Sequedex and related parties, including Sequedex counterclaims for compensatory damages of about $59 million plus $6.6 million of pre-judgment interest, with trial scheduled for April 2004. It also discloses lawsuits from the 1997 South Brunswick fires. Management does not believe these matters will have a material adverse effect on financial condition or results of operations, though the outcome cannot be predicted with certainty.

04—Continue

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