QUOTE AND NEWS
SeekingAlpha  Oct 6  Comment 
By Asif Suria: Welcome to edition 224 of Insider Weekends. Insider buying increased last week with insiders buying $72.32 million of stock compared to $30.92 million in the week prior. Selling decreased with insiders selling $432.89 million of...
SeekingAlpha  Oct 3  Comment 
By Harry Polizzi: On 10/2/14, Iron Mountain Inc. (NYSE:IRM) announced the purchase of Fontis International of Denver Colorado. Fontis International is a provider of a cloud-based subscription services for records retrieval and retention...
newratings.com  Oct 2  Comment 
WASHINGTON (dpa-AFX) - Iron Mountain Inc. (IRM) said Thursday that it has bought Fontis International of Denver, Colorado, a provider of a cloud-based subscription service for records retention guidelines. Iron Mountain will now offer unique...
StreetInsider.com  Oct 2  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Iron+Mountain+%28IRM%29+Acquires+Cloud-Based+Subscription+Service+Provider%2C+Fontis+Int%27l/9879591.html for the full story.
TheStreet.com  Sep 29  Comment 
NEW YORK (TheStreet) -- Shares of Iron Mountain Inc are soaring this afternoon, up 5.71% to $33.72, as the data management company plans to acquire Recall Holdings Ltd for more than $2 billion, Bloomberg reports. Recall is a provider of...
Bloomberg  Sep 29  Comment 
Iron Mountain Inc., the Boston- based data storage and information management company, is considering an offer to buy Recall Holdings Ltd. for more than $2 billion, people with knowledge of the matter said.
TheStreet.com  Sep 29  Comment 
a Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. a Trade-Ideas LLC identified Iron Mountain...
Forbes  Sep 25  Comment 
In early trading on Thursday, shares of Iron Mountain (IRM) topped the list of the day's best performing components of the S&P 500 index, trading up 1.2%.  Year to date, Iron Mountain registers a 17.7% gain.
Benzinga  Sep 23  Comment 
Iron Mountain Incorporated (NYSE: IRM), the reigning global business records storage king, now has a REIT castle to go along with its storage business moat. Revenues from the Iron Mountain document storage business have increased for 25...
Forbes  Sep 22  Comment 
Shareholders of Iron Mountain Inc (NYSE: IRM) looking to boost their income beyond the stock's 5.4% annualized dividend yield can sell the January 2017 covered call at the $42.50 strike and collect the premium based on the 90 cents bid, which...




 
TOP CONTRIBUTORS

Iron Mountain Incorporated (NYSE: IRM) helps customers manage records, protect data, archive digital files, and discard documents securely. The lion's share of Iron Mountain's business is in storing and discarding physical paper documents. In effect, this means driving a van to the customer's location, filling it with documents in boxes that Iron Mountain has sold to its customers, driving them to a secure location for safekeeping and retrieval when the customer needs them. Companies need Iron Mountain's services because of compliance regulations - they need to keep information on file for a certain amount of time to protect against lawsuits, and proprietary information must be discarded securely when it is no longer needed. The company earned $3.01 billion in revenues and $222 million in net income in 2009.[1]

The company has a diversified client base - it serves 97% of the Fortune 1000, and more than 93% of the FTSE 100 in some fashion.[2] But while its client list is impressive, the company's clients keep many of their data management functions in-house, so Iron Mountain only controls 33% of the overall market. The company's digital segment represents less than 10% of it's revenues, but it is a key to the company's growth strategy as it looks to become a fully-integrated data services provider. This segment presents opportunities in cross-selling and up-selling to existing clients and earning more high margin, high-tech business in addition to the physical storage business.

Record keeping and data storage are long-term needs for a company, and most firms are unlikely to bring this service back in-house after out-sourcing it. Thus the nature of Iron Mountain's client base and "stickiness" is long-term, partially shielding the company from the ebbs and flows of the economy at large. In 2009, the company's revenue (on constant currency) increased by 3%.[1]

Company Overview

Iron Mountain reports its business in three segments - records management services, data protection & recovery services, and information destruction services. The company offers both physical and digital services in each segment.[3]

  • Records Management Services (56% of net revenue): records management services are comprised primarily of the archival storage of records, both physical and digital, for long periods of time. Hard copy business records are typically stored for long periods of time in cartons packed by the customer with limited activity. Digital archiving services focus on archiving digital information with long-term preservation requirements. Typical digital records include e-mail, e-statements, images, electronic documents retained for legal or compliance purposes and other data documenting business transactions.
  • Data Protection & Recovery Services (31% of net revenue): data protection & recovery services are the off-site vaulting of data for disaster recovery and business continuity purposes. Physical data protection & recovery services consist of the storage and rotation of backup computer media as part of corporate disaster recovery and business continuity plans. Online backup is a Web-based service that automatically backs up computer data from servers or directly from desktop or laptop computers over the Internet and stores it in secure data center.
  • Information Destruction Services (12% of net revenue): information destruction services consist primarily of the company's physical secure shredding operations.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue fell 1.4% to $3.01 billion. However, on a constant currency rate, revenues actually increased 3%. Revenue was affected by a 2.3% increase in in Storage and a 1.4% decline in Core Services.
  • Net income increased 171.3% to $222.3 million due to foreign currency exchange rate impacts and the tax rate.

Trends/Forces

Business largely non-cyclical and stable

The nature of records-management leads to stability outside of macroeconomic trends. The storage business is inherently-long term since records are kept for the long term and are mission critical to IRM's clients. This has fixed costs for customers, given space requirements of a box of paper filled with records. Loss of revenues from customers ending their contracts is less than 2% of total volume, so the impact of contract losses has been slight. Despite being in a sluggish economy, the company's net revenue increased by 3% on a constant currency basis and net income more than doubled in 2009.[1]

Need for data storage and information management partially mandated by regulation

Regulation like Sarbanes-Oxley Act is a tremendous boon to Iron Mountain's business, as it requires businesses to more fully document and store records of their business, which introduces an opportunity for records-managers. Sarbanes-Oxley in particular is concerned with financial reporting, and requires companies to keep better records of their transactions and other obligations that hadn't been required before. This in turn gives opportunities to Iron Mountain. The company has authored a series of White-Papers on the implications of Sarbanes-Oxley for public businesses to help customers transition. Such regulation not only gets the company new customers, but also helps it up-sell more services, such as email archival, since these services are also necessary in the face of regulatory oversight, such as email subpoenas.

Competition

Iron Mountain is in a fair unique position of having no significant public competitors in its particular space, either in the United States or abroad. It acquired the major ones of note. However, for much of the potential market, clients choose to use in-house storage, lowering Iron Mountain's market share despite a high market penetration. Anacomp is a private competitor, but its scale is much smaller than IRM's.

However, as the company expands its digital offerings, it is beginning to step on the technology-services giants, such as International Business Machines (IBM) and EMC (EMC), who have large diversified operations that include digital data archival options for their clients.

References

  1. 1.0 1.1 1.2 1.3 IRM 2009 10-K "Results of Operations" pg. 36
  2. IRM 2009 10-K "Development of Business" pg. 1-2
  3. IRM 2009 10-K "Service Offerings" pg. 5-8
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