How much did Iron Mountain grow in 2005?

Total revenues increased $260.6 million, or 14.3%, to $2,078.2 million, and operating income increased 12.3% to $386.8 million. Net income rose 18.0% to $111.1 million.

How much debt does Iron Mountain carry?

Total long-term debt was $2,529.4 million at December 31, 2005, against stockholders' equity of $1,370.1 million, a debt-to-equity ratio of 1.85x. The company's bond leverage ratio was 5.0, compared with a maximum allowable ratio of 6.5 under its bond indentures.

Does Iron Mountain pay dividends?

No. The company has never declared or paid cash dividends on its capital stock and intends to retain future earnings. Its only dividend in the last two years was a three-for-two stock split effected as a stock dividend in June 2004.

What acquisitions did Iron Mountain complete in late 2005?

In December 2005 it acquired the Australian and New Zealand operations of Pickfords Records Management for approximately $86 million in cash, LiveVault Corporation for approximately $36 million, and Secure Destruction Limited, the largest U.K. shredding business.

What are the main risks the filing identifies?

Key risks include competition for customers, privacy regulation, possible customer shifts from paper storage to alternative technologies, real estate and environmental liabilities, international operations and currency fluctuations, the integration of acquisitions, and restrictive debt covenants. Sensitivity disclosures show that a 1% rise in the variable rate would reduce net income by $2.3 million.

IRM 10-K FY2005 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed March 16, 2006. Cited figures are marked; the original filing is the authoritative source.

Iron Mountain Incorporated (NYSE: IRM) reported total revenues of $2.08 billion^a for the year ended December 31, 2005, up from $1.82 billion in 2004, with operating income of $386.8 million and net income of $111.1 million, or $0.84 per diluted share.

The company describes itself as the global leader in information protection and storage services, serving more than 90,000 corporate clients across North America, Europe, Latin America and the Pacific Rim. Storage revenues, which it describes as recurring, accounted for over 56%^b of total consolidated revenues in each of the last five years, and the company states that its quarterly storage revenues have grown for 68 consecutive quarters. Growth in 2005 came from both internal growth and acquisitions.

Internal revenue growth was 8% in 2005, and the company says it expects most future revenue growth to come internally in the absence of unusual acquisition activity. In December 2005 it completed three acquisitions: Pickfords (Australia and New Zealand) for approximately $86 million^c, LiveVault for approximately $36 million, and Secure Destruction (U.K. shredding). OIBDA rose to $573.7 million, or 27.6% of revenues, from 28.0% in 2004.

Leverage remains significant. Long-term debt was $2,529.4 million^d against stockholders' equity of $1,370.1 million, a debt-to-equity ratio of 1.85x, and the company states its bond leverage ratio was 5.0 at both year-ends, against a maximum of 6.5. The company has never paid cash dividends, and the filing reports capital expenditures of $272.1 million in 2005 with 2006 capital expenditures expected between $300 million and $355 million, excluding acquisitions.

02—Key points

Key Highlights

Total revenues rose to $2,078.2 million in 2005 from $1,817.6 million in 2004, an increase of 14.3%.
Net income increased 18.0% to $111.1 million; diluted EPS was $0.84 versus $0.72 in 2004.
Storage revenues were $1,181.6 million in 2005 and have exceeded 56% of total revenues in each of the last five years.
Internal revenue growth was 8% in both 2005 and 2004, and the company expects most future growth to come internally.
Long-term debt of $2,529.4 million produced a debt-to-equity ratio of 1.85x; 80% of total debt was fixed rate at December 31, 2005.
Free cash flow funded capital expenditures and acquisitions; operating cash flow was $377.2 million in 2005 versus $305.4 million in 2004.
The company has never paid cash dividends and intends to retain earnings, with its credit agreement and indentures permitting dividends and repurchases subject to limitations.

03—Questions

Frequently Asked Questions

How much did Iron Mountain grow in 2005?
Total revenues increased $260.6 million, or 14.3%, to $2,078.2 million, and operating income increased 12.3% to $386.8 million. Net income rose 18.0% to $111.1 million.
How much debt does Iron Mountain carry?
Total long-term debt was $2,529.4 million at December 31, 2005, against stockholders' equity of $1,370.1 million, a debt-to-equity ratio of 1.85x. The company's bond leverage ratio was 5.0, compared with a maximum allowable ratio of 6.5 under its bond indentures.
Does Iron Mountain pay dividends?
No. The company has never declared or paid cash dividends on its capital stock and intends to retain future earnings. Its only dividend in the last two years was a three-for-two stock split effected as a stock dividend in June 2004.
What acquisitions did Iron Mountain complete in late 2005?
In December 2005 it acquired the Australian and New Zealand operations of Pickfords Records Management for approximately $86 million in cash, LiveVault Corporation for approximately $36 million, and Secure Destruction Limited, the largest U.K. shredding business.
What are the main risks the filing identifies?
Key risks include competition for customers, privacy regulation, possible customer shifts from paper storage to alternative technologies, real estate and environmental liabilities, international operations and currency fluctuations, the integration of acquisitions, and restrictive debt covenants. Sensitivity disclosures show that a 1% rise in the variable rate would reduce net income by $2.3 million.

04—Continue

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