SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
- --------------------------------------------------------------------------------
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended June 30, 1997
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period from ____________ to ___________
Commission file number 333-9963
PIERCE LEAHY CORP.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2588479
------------ ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
631 Park Avenue, King of Prussia, PA 19406
------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
(610) 992-8200
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ------
As of August 8, 1997, there were 16,149,107 shares of the Registrant's Common
Stock, par value $0.01 per share, outstanding.
- 1 -
PIERCE LEAHY CORP.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets at December 31, 1996 3
and June 30, 1997
Consolidated Statements of Operations for the Three
Months Ended June 30, 1996 and 1997 4
Consolidated Statements of Operations for the Six
Months Ended June 30, 1996 and 1997 5
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1997 6
Notes to Consolidated Financial Statements 7-9
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-14
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures
Exhibit 27 - Financial Data Schedule 16
- 2 -
PIERCE LEAHY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
Proforma
June 30,
December 31, June 30, 1997
ASSETS 1996 1997 (Note 4)
------ ------------- ----------- ------------
CURRENT ASSETS:
Cash $ 1,254 $ 1,236 $ 16,487
Accounts receivable (less allowance
for doubtful accounts of $795 and
$1,321) 17,828 24,609 24,609
Inventories 611 878 878
Prepaid expenses and other 688 800 800
Deferred income taxes - 15 5,915
------------ ---------- -----------
Total current assets 20,381 27,538 48,689
------------ ---------- -----------
PROPERTY AND EQUIPMENT: 158,154 187,228 187,228
Less: Accumulated depreciation and
amortization (45,020) (49,012) (49,012)
------------ ---------- -----------
Net property and equipment 113,134 138,216 138,216
------------ ---------- -----------
OTHER ASSETS:
Intangible assets, net 97,544 172,923 174,039
Other 3,761 3,480 3,480
------------ ---------- -----------
Total other assets 101,305 176,403 177,519
------------ ---------- -----------
$ 234,820 $ 342,157 $ 364,424
============ ========== ===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 7,310 $ 1,325 $ 1,325
Current portion of noncompete
obligations 466 387 387
Accounts payable 6,757 5,073 5,073
Accrued expenses 20,563 22,392 22,392
Deferred revenue 9,218 10,130 10,130
------------ ---------- -----------
Total current liabilities 44,314 39,307 39,307
LONG-TERM DEBT 209,330 321,906 254,158
NONCOMPETE OBLIGATIONS 317 147 147
DEFERRED RENT 2,841 3,359 3,359
DEFERRED INCOME TAXES 3,456 2,929 11,529
SHAREHOLDERS' DEFICIT (25,438) (25,491) 55,924
------------ ---------- -----------
$ 234,820 $ 342,157 $ 364,424
============ ========== ===========
The accompanying notes are an integral part of these financial statements.
- 3 -
PIERCE LEAHY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
Three months ended
June 30,
----------------------------------
1996 1997
-------------- ----------------
REVENUES:
Storage $ 18,516 $ 26,691
Service and storage material sales 13,107 19,517
------------- ---------------
Total revenues 31,623 46,208
------------- ---------------
OPERATING EXPENSES:
Cost of sales, excluding
depreciation and amortization 17,783 25,611
Selling, general and administrative 5,055 7,409
Depreciation and amortization 3,040 5,210
Consulting payments to related
parties (125) -
Foreign currency translation - (62)
------------- ---------------
Total operating expenses 25,753 38,168
------------- ---------------
Operating income 5,870 8,040
INTEREST EXPENSE 3,107 8,143
------------- ---------------
NET INCOME (LOSS) $ 2,763 $ (103)
============= ===============
PROFORMA DATA:
NET LOSS AS REPORTED $ (103)
PRO FORMA INCOME TAXES (NOTE 5) 386
---------------
PRO FORMA NET LOSS $ (489)
===============
PRO FORMA NET LOSS PER SHARE (NOTE 6) $ (.05)
===============
WEIGHTED AVERAGE SHARES OUTSTANDING 10,552,278
===============
The accompanying notes are an integral part of these financial statements.
- 4 -
PIERCE LEAHY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
Six months ended
June 30,
-----------------------
1996 1997
----------- -----------
REVENUES:
Storage $ 35,485 $ 50,013
Service and storage material sales 25,837 36,427
----------- -----------
Total revenues 61,322 86,440
----------- -----------
OPERATING EXPENSES:
Cost of sales, excluding
depreciation and amortization 35,189 47,909
Selling, general and administrative 9,911 14,171
Depreciation and amortization 5,612 9,424
Foreign currency translation - 120
----------- -----------
Total operating expenses 50,712 71,624
----------- -----------
Operating income 10,610 14,816
INTEREST EXPENSE 5,953 14,855
----------- -----------
NET INCOME (LOSS) 4,657 (39)
ACCRETION OF REDEEMABLE WARRANTS 1,561 -
----------- -----------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $ 3,096 $ (39)
=========== ===========
PROFORMA DATA:
NET LOSS AS REPORTED $ (39)
PRO FORMA INCOME TAXES (NOTE 5) 628
-----------
PRO FORMA NET LOSS $ (667)
===========
PRO FORMA NET LOSS PER SHARE (NOTE 6) $ (.06)
===========
WEIGHTED AVERAGE SHARES OUTSTANDING 10,552,278
===========
The accompanying notes are an integral part of these financial statements.
- 5 -
PIERCE LEAHY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six months ended
June 30,
----------------------
1996 1997
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,657 $ (39)
Adjustments to reconcile net income
(loss) to net cash
provided by operations:
Depreciation and amortization 5,612 9,424
Gain on sale of property and
equipment - 3
Amortization of deferred financing
costs 173 414
Change in deferred rent 85 409
Foreign currency adjustment (23) (195)
Changes in assets and liabilities,
net of the effects
from the purchase of businesses:
(Increase) decrease in -
Accounts receivable (3,663) (3,394)
Inventories 128 (246)
Prepaid expenses and other (989) (145)
Other assets 117 524
Increase (decrease) in -
Accounts payable 2,376 (3,433)
Accrued expenses (1,416) 155
Deferred revenue (302) 666
Deferred income taxes (126) (148)
---------- ---------
Net cash provided by operating
activities 6,629 3,995
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for business acquired, net of
cash acquired (18,546) (81,680)
Capital expenditures (7,657) (16,350)
Client acquisition costs (2,253) (4,066)
Increase in intangible assets (3,564) (3,189)
Payments on noncompete agreements (100) (310)
---------- ---------
Net cash used in investing
activities (32,120) (105,595)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on revolving line of
credit 5,998 112,462
Proceeds from issuance of long-term
debt 22,925 -
Payments on long-term debt and capital
lease obligations (669) (10,732)
Prepayment penalties and cancellation
of warrants (2,625) -
Payment of debt financing costs - (148)
---------- ---------
Net cash provided by financing
activities 25,629 101,582
---------- ---------
NET INCREASE (DECREASE) IN CASH 138 (18)
CASH, BEGINNING PERIOD 722 1,254
---------- ---------
CASH, END OF PERIOD $ 860 $ 1,236
========== =========
The accompanying notes are an integral part of these financial statements.
- 6 -
PIERCE LEAHY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in thousands, except share and per share data)
(1) GENERAL:
The interim consolidated financial statements presented herein have been
prepared by Pierce Leahy Corp. ("Pierce Leahy" or the "Company") without
audit and, in the opinion of management, reflect all adjustments of a
normal recurring nature necessary for a fair presentation. Interim results
are not necessarily indicative of results for a full year.
The consolidated balance sheet as of December 31, 1996 has been derived
from the consolidated financial statements that have been audited by the
Company's independent public accountants. The unaudited consolidated
financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in the annual financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to those rules and regulations. The
consolidated financial statements and notes included herein should be read
in conjunction with the consolidated financial statements and notes for the
year ended December 31, 1996, included in the Company's Annual Report on
Form 10-K and the Company's Registration Statement on Form S-1 (File number
333-23121).
(2) ACQUISITIONS:
During 1996, the Company purchased twelve records management businesses.
During the six months ended June 30, 1997, eight records management
businesses were purchased by the Company. Each of these acquisitions was
accounted for using the purchase method of accounting and, accordingly, the
results of operations for each acquisition have been included in the
consolidated results of the Company from their respective acquisition
dates. The purchase price for the 1997 acquisitions made through June 30,
1997 exceeded the underlying fair value of the net assets acquired by
$72,555, which has been assigned to goodwill and is being amortized over
the estimated benefit period of 30 years. Funds used to make the various
acquisitions were provided through the Company's credit facility.
- 7 -
(3) LONG-TERM DEBT:
Pro Forma
December 31, June 30, June 30,
1996 1997 1997
----------- -------- --------
Revolving credit facility $ 5,327 $117,748 $ -
Senior subordinated notes 200,000 200,000 250,000
Mortgages 3,679 3,601 3,601
Seller notes 7,600 1,823 1,823
Other 34 59 59
----------- -------- --------
Total long-term debt 216,640 323,231 255,483
Less: Current portion (7,310) (1,325) (1,325)
----------- -------- --------
$209,330 $321,906 $254,158
=========== ======== ========
(4) EQUITY AND DEBT OFFERINGS
On July 7, 1997, Pierce Leahy completed an initial public offering of
5,664,017 shares of its Common stock (the "Equity Offerings"). In
addition, concurrent with the Equity Offerings Pierce Leahy sold $120,000
principal amount of 9 1/8% Senior Subordinated Notes due 2007 (the
"Notes Offering"). The proceeds from these offerings were used primarily
to redeem a portion of the previously issued 11 1/8% Senior
Subordinated Notes (the "1996 Notes") and to repay amounts outstanding
under the Company's revolving credit facility, with the remainder to be
used for general corporate purposes.
The pro forma balance sheet as of June 30, 1997 reflects the sale of the
5,664,017 shares of Common stock resulting in estimated net proceeds to the
Company of $94,090 (after deducting underwriting discounts and commissions
and estimated offering expenses of $7,862) and net proceeds of $115,909
from the Notes Offering (after deducting underwriting discounts and
commission and estimated offering expenses of $4,091).
A substantial portion of the Equity Offerings was used to redeem $70,000 of
the 1996 Notes on August 1, 1997 plus a $7,000 (pretax) prepayment penalty
incurred in connection with the redemption. In addition, the Company will
record a charge of approximately $2,975 relating to the write-off of
unamortized deferred financing costs on the retired 1996 Notes. This
extraordinary charge of approximately $9,975 (pretax) will be recorded in
the third quarter relating to the early extinguishment of debt. A tax
benefit of approximately $3,900 relating to these charges will also be
recorded in the
- 8 -
third quarter. The redemption and extraordinary charge, net of tax, is
reflected in the accompanying pro forma balance sheet.
The proceeds from the Notes Offering were primarily used to repay existing
amounts outstanding under the Company's credit facility. This has also
been reflected in the accompanying balance sheet.
The Company previously operated as a Subchapter S corporation and
terminated such status in connection with the Equity Offerings. The
Company will record a deferred income tax provision of approximately
$6,600 in connection with the termination of the Company's status as a
Subchapter S corporation related to the tax effect of the differences in
the basis of assets and liabilities for financial reporting and income tax
purposes. This deferred tax provision will be recorded in the third
quarter of 1997. This charge is reflected in the accompanying pro forma
balance sheet.
The pro forma balance sheet does not reflect an unusual charge of
approximately $1,752 (pretax) that will be recorded in the third quarter
for the write-off of the estimated unamortized compensation expense
associated with stock options granted on January 1, 1997, due to the
acceleration of vesting upon the completion of the offerings.
(5) PRO FORMA INCOME TAXES
Prior to June 30, 1997, Pierce Leahy was a Subchapter S Corporation for
federal income tax purposes and, accordingly, income was passed through to
the shareholders and taxed at the individual level. The Subchapter S
Corporation status was terminated in conjunction with the Equity Offerings.
The pro forma income tax provision assumes the Company had been treated as
a C corporation for income tax purposes for the three and six month periods
ended June 30, 1997.
(6) PRO FORMA NET LOSS PER SHARE
Pro forma net loss per share was calculated by dividing pro forma net loss
by the weighted average number of shares of common stock outstanding.
Pursuant to the requirements of the Securities and Exchange Commission,
common stock equivalents issued by the Company during the 12 months
immediately preceding the Equity Offerings have been included in the
calculation of the shares used in computing pro forma net loss per share as
if they were outstanding for the period presented using the treasury stock
method. All other common stock equivalents have been excluded from the
calculation as the impact is anti-dilutive.
- 9 -
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition and
results of operations for the three month periods and the six month periods
ended June 30, 1996 and 1997 should be read in conjunction with the consolidated
financial statements and footnotes for the six month period ended June 30, 1997,
included herein, and the consolidated financial statements and footnotes for the
year ended December 31, 1996, included in the Company's Annual Report on Form
10-K and the Company's Registration Statement on Form S-1 (File number 333-
23121).
Results of Operations
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1997
Total revenues increased from $31.6 million for the three months ended June 30,
1996 to $46.2 million for the three months ended June 30, 1997, an increase of
$14.6 million, or 46.1%. Sixteen acquisitions, including the acquisition of
Records Management Services, Inc. ("RMS") on April 2, 1997, were completed from
July 1996 to June 1997 which accounted for $10.5 million, or 71.9% of such
increase in total revenues. The balance of the revenue growth resulted from
sales to new customers and from net increases in cubic feet stored from existing
customers.
Storage revenues increased from $18.5 million for the three months ended June
30, 1996 to $26.7 million for the three months ended June 30, 1997, an increase
of $8.2 million, or 44.2%. Service and storage material sales revenues
increased from $13.1 million for the three months ended June 30, 1996 to $19.5
million for the three months ended June 30, 1997, an increase of $6.4 million,
or 48.9%.
Cost of sales (excluding depreciation and amortization) increased from $17.8
million in the three months ended June 30, 1996 to $25.6 million in the three
months ended June 30, 1997, an increase of $7.8 million, or 44.0% but decreased
as a percentage of total revenues from 56.2% in the 1996 period to 55.4% in the
1997 period. The $7.8 million increase in cost of sales resulted primarily from
an increase in cubic feet stored associated with the growth in business. The
decrease in cost of sales as a percentage of total revenues was due primarily to
operating and storage efficiencies.
Selling, general and administrative expenses increased from $5.1 million for the
three months ended June 30, 1996 to $7.4 million for the three months ended June
30, 1997, an increase of $2.4 million, or 46.6%, and remained the same as a
percentage of revenues at 16.0% for both periods. The dollar increase was
primarily attributable to increases in staffing, including increases due to
acquisitions.
- 10 -
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Depreciation and amortization expense increased from $3.0 million for the three
months ended June 30, 1996 to $5.2 million for the three months ended June 30,
1997, an increase of $2.2 million, or 71.4%, and increased as a percentage of
revenues from 9.6% for the three months ended June 30, 1996 to 11.3% for the
three months ended June 30, 1997. The increase was primarily attributable to
the additional depreciation and amortization expense related to the sixteen
acquisitions completed from July 1996 to June 1997 and, in addition, capital
expenditures for buildings, shelving, improvements to records management
facilities and information systems, and client acquisition costs.
Interest expense increased from $3.1 million for the three months ended June 30,
1996 to $8.1 million for the three months ended June 30, 1997, an increase of
$5.0 million, or 162.1%. The increase was primarily attributable to increased
indebtedness related to financing acquisitions and capital expenditures, as well
as the higher interest rate on the Company's 11 1/8% Senior Subordinated Notes
issued in July 1996 compared to the bank debt repaid upon the issuance of such
Notes.
As a result of the foregoing factors, the Company had net income of $2.8 million
(8.7% of revenues) for the three months ended June 30, 1996 compared to a net
loss of $.1 million (-.2% of revenues) for the three months ended June 30, 1997.
Earnings before interest, taxes, depreciation and amortization, consulting
payments to related parties, and foreign currency translation ("EBITDA")
increased from $8.8 million for the three months ended June 30, 1996 to $13.2
million for the three months ended June 30, 1997, an increase of $4.4 million,
or 50.1%. As a percentage of revenues, EBITDA increased from 27.8% for the
three months ended June 30, 1996 to 28.5% for the three months ended June 30,
1997.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1997
Total revenues increased from $61.3 million for the six months ended June 30,
1996 to $86.4 million for the six months ended June 30, 1997, an increase of
$25.1 million, or 40.9%. Sixteen acquisitions, including the acquisition of RMS
on April 2, 1997, completed from July 1996 to June 1997 accounted for $15.7
million, or 62.7% of such increase in total revenues. The balance of the
revenue growth resulted from sales to new customers and from net increases in
cubic feet stored from existing customers.
Storage revenues increased from $35.5 million for the six months ended June 30,
1996 to $50.0 million for the six months ended June 30, 1997, an increase of
$14.5 million, or 40.9%. Service and storage material sales revenues increased
from $25.8 million for the six months ended June 30, 1996 to $36.4 million for
the six months ended June 30, 1997, an increase of $10.6 million, or 41.0%.
- 11 -
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Cost of sales (excluding depreciation and amortization) increased from $35.2
million in the six months ended June 30, 1996 to $47.9 million in the six months
ended June 30, 1997, an increase of $12.7 million, or 36.1% but decreased as a
percentage of total revenues from 57.4% in 1996 to 55.4% in 1997. The $12.7
million increase in cost of sales resulted primarily from an increase in cubic
feet associated with the growth in business. The decrease in cost of sales as a
percentage of total revenues was due primarily to operating and storage
efficiencies.
Selling, general and administrative expenses increased from $9.9 million for the
six months ended June 30, 1996 to $14.2 million for the six months ended June
30, 1997, an increase of $4.3 million, or 43.0%, and increased as a percentage
of revenues from 16.2% for the six months ended June 30, 1996 to 16.4% for the
six months ended June 30, 1997. The dollar increase was primarily attributable
to increases in staffing, including increases due to acquisitions. The increase
as a percentage of total revenues was due primarily to increased marketing
expenses related to the recent expansion of the sales and marketing force and
employee training.
Depreciation and amortization expense increased from $5.6 million for the six
months ended June 30, 1996 to $9.4 million for the six months ended June 30,
1997, an increase of $3.8 million, or 67.9%, and increased as a percentage of
revenues from 9.2% for the six months ended June 30, 1996 to 10.9% for the six
months ended June 30, 1997. The increase was primarily attributable to the
additional depreciation and amortization expense related to the sixteen
acquisitions completed from July 1996 to June 1997 and, in addition, capital
expenditures for buildings, shelving, improvements to records management
facilities and information systems, and client acquisition costs.
Interest expense increased from $6.0 million for the six months ended June 30,
1996 to $14.9 million for the six months ended June 30, 1997, an increase of
$8.9 million, or 149.5%. The increase was primarily attributable to increased
indebtedness related to financing acquisitions and capital expenditures, as well
as the higher interest rate on the Company's 11 1/8% Senior Subordinated
Notes issued in July 1996 compared to the bank debt repaid upon the issuance of
such Notes.
As a result of the foregoing factors, the Company had net income of $4.7 million
(7.6% of revenues) for the six months ended June 30, 1996 compared to a net loss
of $.04 million (.045% of revenues) for the six months ended June 30, 1997.
EBITDA increased from $16.2 million for the six months ended June 30, 1996 to
$24.4 million for the six months ended June 30, 1997, an increase of $8.1
million, or 50.2%. As a percentage of revenues, EBITDA increased from 26.5% for
the six months ended June 1996 to 28.2% for the six months ended June 30, 1997.
- 12 -
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Liquidity and Capital Resources
The Company has made significant capital investments, consisting primarily of
(i) acquisitions, (ii) capital expenditures for buildings, shelving,
improvements to records management facilities and information systems, and (iii)
client acquisition costs. Cash paid for these investments during the six months
ended June 30, 1997 was $81.7 million, $16.4 million and $4.1 million,
respectively. These investments were primarily funded with borrowings under the
Company's credit facility.
During the six months ended June 30, 1996, the Company generated $6.6 million in
net cash provided by operations as compared to net cash provided by operations
of $4.0 million for the six months ended June 30, 1997. The $2.6 million
decrease in net cash provided by operations for the six months ended June 30,
1997 compared to the prior year period resulted from a decrease in net income of
$4.7 million, a $2.1 million decrease in working capital, of which $4.2 million
was a result of reductions in accrued expenses and accounts payable, offset by
an increase of $3.8 million in depreciation and amortization.
Net cash provided by financing activities was $25.6 million for the six months
ended June 30, 1996, consisting primarily of borrowing of $6.0 million under the
Company's credit facility and the issuance of additional long-term debt of $22.9
million, offset by the repayment of long-term debt of $.7 million and $2.6
million of prepayment penalties and cancellation of the warrant related to a
previous credit agreement. The net cash provided by financing activities for
the six months ended June 30, 1997 was $101.5 million, consisting primarily of
$112.5 million borrowings under the credit facility, offset by the repayment of
long-term debt of $10.8 million. As of June 30, 1997, the Company had $1.2
million of available cash and a credit facility providing for $110.0 million of
U.S. dollar borrowings and $35.0 million of Canadian dollar borrowings. As of
June 30, 1997, $117.8 million was outstanding under the credit facility.
Subsequent to June 30, 1997, the Company completed an initial public offering
of the Common Stock resulting in net proceeds to the Company in approximately
$94.1 million and concurrently issued $120.0 principal amount of 9 1/8%
Senior Subordinated Notes due 2007. The net proceeds of the offerings were
primarily used to redeem $70.0 million principal amount of the Company's
11 1/8% Senior Subordinated Notes at 110% of their principal amount plus
accrued interest and to repay outstanding borrowings under the credit facility.
The Company subsequently has entered into an amended credit facility providing
for $140.0 million of U.S. dollar borrowings and $35.0 million of Canadian
dollar borrowings subject to certain restrictions.
- 13 -
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Forward-Looking Statements
This Report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, and is subject to the safe-harbor created by such sections.
Such forward-looking statements concern the Company's operations, economic
performance and financial condition, including in particular its acquisitions
and their integration into the Company's existing operations. Such statements
involved known and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors, include among others, the following: general economic and business
condition; changes in customer preferences; competition; changes in technology;
the integration of any acquisitions; changes in business strategy; the
indebtedness of the Company; quality of management, business abilities and
judgment of the Company's personnel; the availability, terms and deployment of
capital; and various other factors referenced in this Report. The forward-
looking statements are made as of the date of this Report, and the Company
assumes no obligation to update the forward-looking statements or to update the
reasons why actual results could differ from those projected in the forward-
looking statements.
- 14 -
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule for the six months ended June
30, 1997, submitted to the Securities and Exchange
Commission in electronic format
(b) Reports on Form 8-K- The Company filed a Form 8-K on April 16, 1997
reporting the acquisition of Records Management
Services, Inc.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIERCE LEAHY CORP.
August 14, 1997 By: /s/ Douglas B. Huntley
--------------- ---------------------------
(date) Douglas B. Huntley
Vice President and Chief Financial Officer
(Principal Financial Officer)
- 15 -