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Iron Mountain Annual Report, Year Ended Dec 31, 2004

Filing Date
Filed March 16, 2005
Period End
December 31, 2004
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 16, 2005. Cited figures are marked; the original filing is the authoritative source.

Iron Mountain Incorporated (IRM) reported total revenues of $1.82 billiona for fiscal 2004, up 21.1% from $1.50 billion in 2003, with internal revenue growth of 8% for the year.

Operating income rose 13.0% to $344.5 millionb, and net income increased 11.3% to $94.2 million. OIBDA grew 16.6% to $508.1 million, though OIBDA margin declined to 28.0% from 29.0%, which the company attributed largely to higher labor, facilities and transportation costs tied to its European operations and secure shredding business. Growth was helped by acquisitions, including the July 2003 Hays IMS purchase, the February 2004 buyout of Mentmore's 49.9% stake in Iron Mountain Europe Limited for 82.5 million British pounds sterling ($154 million), and the November 2004 acquisition of Connected Corporation for $109 million net of cash acquired.

The balance sheet expanded materially, with total assets of $4.44 billionc and long-term debt of $2.48 billion at December 31, 2004, compared with $3.89 billion and $2.09 billion a year earlier. Management stated that the company is highly leveraged and that its key bond leverage ratio was 5.0 at year-end, against a target range of 4.5 to 5.5 and a maximum of 6.5 under its bond indentures. Cash flow from operations was $305.4 million, which funded capital expenditures of $232.0 million and acquisitions.

The company expects 2005 capital expenditures, excluding acquisitions, of approximately $220 million to $250 milliond, and does not expect to pay significant income taxes in 2005 given its net operating loss carryforwards. The filing also describes ongoing litigation involving former director J. Peter Pierce, Sequedex, H-W Associates and Pioneer Capital.

Management does not believe these proceedings will have a material adverse effect on financial condition or results of operations, although the outcome cannot be predicted with certainty. Management concluded that internal control over financial reporting was effective as of December 31, 2004, and Deloitte & Touche LLP issued an unqualified opinion on that assessment.

02—Key points

Key Highlights

  1. Total revenues rose 21.1% to $1.82 billion in 2004, with internal revenue growth of 8% and acquisitions contributing 8% of the increase
  2. Operating income increased 13.0% to $344.5 million, and net income rose 11.3% to $94.2 million
  3. OIBDA grew 16.6% to $508.1 million, but OIBDA margin fell to 28.0% from 29.0%
  4. International revenues reached 27% of total 2004 revenues, up from 19% in 2003, driven largely by the Hays IMS acquisition
  5. Total debt climbed to $2.48 billion at year-end 2004, and the company reported a bond leverage ratio of 5.0 against a 6.5 maximum allowed under its indentures
  6. Operating cash flow was $305.4 million, covering capital expenditures of $232.0 million; the company expects 2005 capital expenditures of $220 million to $250 million excluding acquisitions
  7. Storage revenues have grown for 64 consecutive quarters and accounted for over 57% of total revenues in each of the last five years

03—Questions

Frequently Asked Questions

  1. How did Iron Mountain perform financially in 2004?

    Revenues grew 21.1% to $1,817.6 million, operating income rose 13.0% to $344.5 million, and net income increased 11.3% to $94.2 million. OIBDA increased 16.6% to $508.1 million, although its margin declined to 28.0% from 29.0%.

  2. What were the major acquisitions in 2004?

    The company completed the February 2004 acquisition of Mentmore's 49.9% interest in Iron Mountain Europe Limited for 82.5 million British pounds sterling ($154 million) and the November 2004 acquisition of Connected Corporation for $109 million net of cash acquired. In January 2005 it also acquired the 49.9% interest in Iron Mountain South America held by Compass Capital Fund.

  3. How leveraged is the company and how are its debt covenants structured?

    Management states the company is highly leveraged and expects to remain so. Total long-term debt was $2,478.0 million at December 31, 2004, with 89% of total debt fixed-rate. The key bond leverage ratio was 5.0, against a target range of 4.5 to 5.5 and a maximum of 6.5 under the bond indentures. The covenants do not contain a rating trigger, so a change in debt rating would not by itself cause a default.

  4. Are there material legal proceedings investors should know about?

    The company is involved in actions with former director J. Peter Pierce, Sr., Sequedex, H-W Associates and Pioneer Capital. Management does not believe the outcome will have a material adverse effect on financial condition or results of operations, though it cannot predict the outcome with certainty.

  5. Does the company pay dividends or plan to?

    No cash dividends were paid on common stock in the last two years, apart from a three-for-two stock split effected as a stock dividend in June 2004. The Board intends to retain future earnings and does not anticipate paying cash dividends in the foreseeable future.

04—Continue

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