01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
Iron Mountain Incorporated reported total revenues of $3.01 billiona for 2009, down 1.4% from $3.06 billion in 2008, with internal revenue growth of 3% and foreign currency fluctuations reducing reported revenue by 4%.
Operating income rose 11.4% to $548.5 millionb, and net income attributable to Iron Mountain increased to $220.9 million from $82.0 million, helped by foreign currency transaction gains and a lower effective tax rate of 33.2%. Adjusted OIBDA grew 9.8% to $868.0 million, with Adjusted OIBDA margin rising to 28.8% from 25.9%. Storage revenues, which the company describes as stable and recurring, were $1.70 billion and accounted for over 54% of total revenues in each of the last five years.
The company describes itself as a leading information management services company serving more than 140,000 corporate clients in 38 countries. Management said it expects to achieve more of its revenue growth internally in 2010 and beyond, and it expects 2010 internal revenue growth between 4% and 6%. Capital expenditures were $312.8 millionc in 2009, and management expects approximately $320 million in 2010, excluding acquisitions.
Total long-term debt was $3.25 billiond at year-end, with a debt-to-equity ratio of 1.52, and the company reported compliance with all debt covenants. In February 2010 the company acquired Mimosa Systems for approximately $112 million in cash, approved a $150 million share repurchase program, and adopted a dividend policy calling for a first quarterly dividend of $0.0625 per share payable April 15, 2010. The filing also discloses a pending Pittsburgh lawsuit seeking damages of $6.5 million to $53.5 million, for which no loss reserve has been recorded, and continuing claims related to the July 2006 London fire.
02—Key points
Key Highlights
- Total revenues were $3.01 billion in 2009, down 1.4% from $3.06 billion in 2008, with internal revenue growth of 3%.
- Operating income increased 11.4% to $548.5 million, and Adjusted OIBDA rose 9.8% to $868.0 million, with Adjusted OIBDA margin of 28.8% versus 25.9% in 2008.
- Net income attributable to Iron Mountain Incorporated was $220.9 million, compared with $82.0 million in 2008.
- Storage revenues of $1.70 billion were stable and recurring, and accounted for over 54% of total consolidated revenues in each of the last five years.
- Total long-term debt was $3.25 billion at December 31, 2009, with a debt-to-equity ratio of 1.52, and the company was in compliance with all debt covenants.
- In February 2010 the company acquired Mimosa Systems for approximately $112 million in cash and approved a $150 million share repurchase program.
- The company adopted a dividend policy with a first quarterly dividend of $0.0625 per share payable April 15, 2010, and expects 2010 annual dividends of approximately $50 million at the current rate.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $2.77B$3.06B | −9.2% |
| SG&A Expenses | $749.93M$882.36M | −15.0% |
| Operating Expenses | $2.23B$2.56B | −13.0% |
| Operating Income | $545.23M$492.53M | +10.7% |
| Interest Expense | $212.54M$236.63M | −10.2% |
| Net Income | $219.38M$82.04M | +167.4% |
| EPS (Basic) | $1.07$0.41 | +161.0% |
| EPS (Diluted) | $1.07$0.40 | +167.5% |
| Shares Outstanding (Basic) | 202.81M201.28M | +0.8% |
| Shares Outstanding (Diluted) | 204.27M203.29M | +0.5% |
05—Questions
Frequently Asked Questions
How did Iron Mountain perform financially in 2009?
Revenues declined 1.4% to $3.01 billion, but operating income rose 11.4% to $548.5 million and Adjusted OIBDA rose 9.8% to $868.0 million. Net income attributable to the company was $220.9 million, up from $82.0 million in 2008. The filing attributes the net income increase in part to foreign currency exchange effects in other income and expense and to the lower effective tax rate.
What is the outlook for internal revenue growth?
The company expects consolidated internal revenue growth for 2010 to be between 4% and 6%. It also expects to achieve more of its revenue growth internally in 2010 and beyond, absent unusual acquisition activity.
What are the company's capital allocation plans?
Excluding acquisitions, capital expenditures are expected to be approximately $320 million in 2010, including about $30 million of opportunity-driven real estate purchases. The board approved a share repurchase program of up to $150 million and adopted a quarterly dividend policy beginning with a $0.0625 per share payment on April 15, 2010.
What litigation risks does the filing disclose?
The Pittsburgh Lawsuit, filed by Digital Encoding Factory and related companies, seeks damages of $6.5 million to $53.5 million over an alleged oral agreement. The company disputes the claims, has recorded no loss reserve, and is unable to estimate the outcome. The trial is scheduled for March 2010. Claims related to the July 2006 London fire also remain outstanding, and the company does not expect them to have a material impact.
How leveraged is Iron Mountain?
The company is highly leveraged, with total long-term debt of $3.25 billion and total equity of $2.15 billion as of December 31, 2009, a debt-to-equity ratio of 1.52. Its revolving credit and term loan leverage ratio was 3.3 against a maximum of 5.5, and its bond leverage ratio was 4.1 against a maximum of 6.5.
06—Continue