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Iron Mountain Annual Report, Year Ended Dec 31, 2007

Filing Date
Filed February 29, 2008
Period End
December 31, 2007
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 February 29, 2008. Cited figures are marked; the original filing is the authoritative source.

Iron Mountain Incorporated (NYSE: IRM) reported total revenues of $2.73 billiona for 2007, up from $2.35 billion in 2006, with operating income of $454.7 million and net income of $153.1 million.

Management describes the company as the global leader in information protection and storage services, serving more than 100,000 corporate clients across 37 countries as of December 31, 2007. Storage revenues were $1.50 billionb and service and storage material sales were $1.23 billion. OIBDA rose to $704.0 million, though its margin declined to 25.8% from 26.2% in 2006.

Internal revenue growth was 10% in 2007, with acquisitions contributing 3% and foreign currency 3%. The balance sheet carries substantial leverage. Total long-term debt was $3.27 billionc against stockholders' equity of $1.80 billion, a debt-to-equity ratio of 1.82x.

In 2007 the company acquired ArchivesOne, RMS and Stratify, paid $481.5 milliond in net cash for acquisitions, and spent $386.4 million on capital expenditures. The filing guides to 2008 capital expenditures of $440 million to $480 million, excluding acquisitions. The company has never paid cash dividends.

Its covenant leverage ratios were 4.5 for the credit facility (maximum 5.5) and 5.1 for the bonds (maximum 6.5), and it reported compliance with all debt covenants at year end. Key investor risks disclosed include data-security liability and reputational harm from lost customer media, such as the September 2007 loss of Louisiana Office of Student Financial Assistance backup media now subject to class actions, and the July 2006 London fire, where claims remain outstanding. Other risks include international currency exposure, with 32% of 2007 revenues from outside the U.S., and reliance on paper storage in the face of alternative technologies.

02—Key points

Key Highlights

  1. Total revenues of $2.73 billion in 2007, up from $2.35 billion in 2006; net income of $153.1 million, up from $128.9 million.
  2. Operating income of $454.7 million and OIBDA of $704.0 million, with OIBDA margin of 25.8% versus 26.2% in 2006.
  3. Internal revenue growth of 10% in 2007, with acquisitions contributing 3% and foreign currency 3%.
  4. Total long-term debt of $3.27 billion against stockholders' equity of $1.80 billion, a debt-to-equity ratio of 1.82x; the company is highly leveraged.
  5. 2007 acquisitions (ArchivesOne, RMS and Stratify) totaled $481.5 million in net cash paid; 2008 capital expenditures are guided to $440–$480 million excluding acquisitions.
  6. Data-security exposure: the lost Louisiana Office of Student Financial Assistance backup media has led to class actions, and claims from the July 2006 London fire remain outstanding.
  7. International exposure: 32% of 2007 revenues came from outside the U.S., and the company has never declared or paid cash dividends.

03—Questions

Frequently Asked Questions

  1. How much did Iron Mountain grow in 2007?

    Total revenues rose $379.7 million, or 16.2%, to $2.73 billion. Operating income increased 11.7% to $454.7 million, and net income increased 18.8% to $153.1 million. Internal revenue growth was 10%, with acquisitions contributing 3% and foreign currency 3%.

  2. How leveraged is the company?

    Total long-term debt was $3.27 billion at December 31, 2007, against stockholders' equity of $1.80 billion, a debt-to-equity ratio of 1.82x. The company states it expects to remain highly leveraged. Its credit facility leverage ratio was 4.5 against a maximum of 5.5, and its bond leverage ratio was 5.1 against a maximum of 6.5. Management reported compliance with all debt covenants.

  3. Does Iron Mountain pay dividends?

    No. The company has never declared or paid cash dividends on its common stock. The only distribution in the last two years was a three-for-two stock split effected as a stock dividend in December 2006. Future dividends and buybacks depend on financial condition, results and business requirements, and are subject to limits in its credit agreement and indentures.

  4. What are the main legal and operational risks?

    The company faces data-security risk after the September 2007 loss of Louisiana Office of Student Financial Assistance backup media, which has led to class actions and an indemnification demand. Claims from the July 2006 London fire remain outstanding, though management does not expect a material impact. The filing also cites the risk that customers shift from paper storage to alternative technologies, and international currency and political exposure.

  5. What is the outlook for capital spending and growth?

    Excluding acquisitions, capital expenditures are expected to be between $440 million and $480 million in 2008, including $40 million to $50 million of opportunity-driven real estate purchases. Management expects most revenue growth in 2008 and beyond to come internally, absent unusual acquisition activity.

04—Continue

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