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Iron Mountain Annual Report, Year Ended Dec 31, 1997

Filing Date
Filed March 31, 1998
Period End
December 31, 1997
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 March 31, 1998. Cited figures are marked; the original filing is the authoritative source.

Pierce Leahy Corp. (now Iron Mountain Incorporated) reported a 1997 net loss of $15.2 milliona on total revenues of $183.5 million, up from $129.7 million in 1996, an increase the filing states as 41.4%.

Storage revenues were $107.9 millionb (58.8% of total revenues) and service and storage material sales were $75.6 million (41.2%). Operating income rose to $27.5 million from $19.7 million, while interest expense climbed to $29.3 million from $17.2 million. EBITDA was $51.5 million, or 28.1% of revenues, and the company describes itself as the largest hard copy records management company in North America, with 64.0 million cubic feet of records under management and 188 facilities.

The net loss reflects a $7.4 millionc income tax provision, which includes a $6.6 million one-time charge from terminating the company's S corporation status upon its July 1997 initial public offering, and a $6.0 million extraordinary charge for early debt extinguishment. The IPO raised net proceeds of $93.6 million, and the company completed 17 acquisitions in 1997 for an aggregate purchase price of $109.1 million. Total assets grew to $394.7 million and shareholders' equity became positive at $59.3 million, compared with a deficit of $25.4 million a year earlier.

Looking ahead, the company signed a definitive agreement to acquire Archivex Inc., a Canadian records management company, for CDN $90.0 milliond, expected to close in April 1998, and it expects 1998 capital expenditures of approximately $35.0 million. Management states that cash flow from operations and borrowings under the Credit Facility will be sufficient for the foreseeable future. The company does not expect to pay cash dividends, and its ability to do so is limited by its senior subordinated notes and credit facility.

02—Key points

Key Highlights

  1. Total revenues rose to $183.5 million in 1997 from $129.7 million in 1996, an increase of 41.4%, with acquisitions contributing $34.9 million of the growth.
  2. Net loss of $15.2 million in 1997, compared with net income of $0.5 million in 1996, driven by a $7.4 million income tax provision and a $6.0 million extraordinary charge.
  3. EBITDA increased to $51.5 million from $35.9 million, representing 28.1% of total revenues versus 27.6% in 1996.
  4. Interest expense increased to $29.3 million from $17.2 million, reflecting higher indebtedness used to finance acquisitions and capital expenditures.
  5. The July 1997 initial public offering generated net proceeds of $93.6 million, and shareholders' equity turned positive at $59.3 million from a deficit of $25.4 million.
  6. Seventeen acquisitions were completed in 1997 for an aggregate purchase price of $109.1 million, and a definitive agreement was signed to acquire Archivex Inc. for CDN $90.0 million.
  7. The company manages 64.0 million cubic feet of records across 188 facilities, and over 30,000 customer accounts, with no single customer accounting for more than 3% of 1997 revenues.

03—Questions

Frequently Asked Questions

  1. Why did Pierce Leahy swing from net income to a net loss in 1997?

    The filing attributes the $15.2 million net loss mainly to a $7.4 million income tax provision, which included a $6.6 million one-time charge from terminating its S corporation status, and a $6.0 million extraordinary charge for early extinguishment of debt. Interest expense also rose sharply to $29.3 million from $17.2 million.

  2. How is the company funding its growth through acquisitions?

    The company has financed acquisitions with borrowings under its credit agreements and cash flows from operations. In 1997, it used $93.6 million in net IPO proceeds, $120 million from the 9.125% Senior Subordinated Notes due 2007, and revolver borrowings. The Credit Facility was amended in February 1998 to provide U.S. $150 million and CDN $40 million in borrowing capacity.

  3. Does the company pay dividends?

    No. Since its July 1997 initial public offering, the company has not paid cash dividends on its common stock and does not anticipate doing so in the foreseeable future. It intends to retain earnings, and its ability to pay dividends is limited by the terms of its senior subordinated notes and credit facility.

  4. What are the main risks and pressures on pricing noted in the filing?

    Revenue per average cubic foot declined from 1995 to 1997 due to growth in large volume accounts with discounted long-term contracts, renegotiation of existing contracts at lower rates, and competition. Competition is based on price, reliability, quality of service and technology, and the company also faces competition for acquisition candidates.

  5. What is the company's Year 2000 readiness status?

    The company reports that review of its core PLUS system databases is complete, with code modifications and testing scheduled for completion by December 31, 1998. Its internal financial accounting system is not yet Year 2000 compliant and is scheduled for upgrade by December 31, 1998. The company estimates related costs will not have a material effect on its 1998 or 1999 financial results.

04—Continue

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