StorageVault Reports 2021 Second Quarter Results and Increases Dividend
August 05, 2021
STORAGEVAULT CANADA INC. (“StorageVault” or the “Corporation”) (SVI-TSX-V) reported the Corporation’s 2021 second quarter results and increases its dividend. Iqbal Khan, Chief Financial Officer, commented:
“Strong fundamentals combined with the dedication from our amazing team resulted in exceptional same store performance, with 22.5% year over year increase in revenue and 25.2% increase in NOI in Q2. We continue to focus on accretive acquisitions and have acquired or announced $140 million in acquisitions and are revising our acquisition outlook to $200 million for the year. The market continues to be extremely strong and we are well positioned to take advantage of this for the balance of the year.”
2021 Second Quarter Results
Revenue for the second quarter of 2021 increased to $51.7 million compared to $37.4 million in Q2 2020 and net operating income (“NOI”), a non-IFRS measure, grew to $35.0 million from $25.3 million for the comparative period. Our cash flow from operations increased year over year and when combined with our financing and investing activities resulted in a cash balance of $27.3 million at the end of the quarter. The Q2 2021 net loss of $7.2 million (net loss of $8.7 million for Q2 2020) is after $23.3 million of depreciation and amortization and deferred tax recovery recorded in the quarter of $2.0 million. Both amounts are non-cash items.
As a result of our occupancy levels, revenue management program and operational efficiency, Revenue and NOI from existing self storage stores increased by 22.5% and 25.2%, compared to the same period last year. In the midst of COVID-19, the Corporation still achieved 3.0% Revenue and 3.1% NOI growth for Q2 2020. Funds from operations (“FFO”), a non-IFRS measure, were $14.3 million for Q2 2021 compared to $9.7 million in Q2 2020, a 47.5% increase year over year. Adjusted funds from operations (“AFFO”), a non-IFRS measure, were $16.6 million for Q2 2021 compared to $10.5 million in Q2 2020, a 57.0% increase. Both the FFO and AFFO continue to be muted by the operational and interest expenses related to the $114.6 million in new build and lease-up stores and raw land acquisitions completed in Q4 2020. In Q2 2021, these acquisitions reduced our FFO and AFFO by $0.3 million. The Corporation expects to be cash flow positive and realize the benefits of these acquisitions in fiscal 2022 and beyond.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see pages 11 through 16 of the Corporation’s Management’s Discussion & Analysis for the three and six months ended June 30, 2021 filed on SEDAR at www.sedar.com.
2021 Six Months Year to Date Results
Revenue for the six months ended June 30, 2021 increased to $95.0 million from $73.3 million and NOI, a non-IFRS measure, grew to $62.4 million from $48.3 million, for the comparative period. For the six months ended June 30, 2021, cash flow from operations was $24.8 million and when combined with our financing and investing activities resulted in a cash balance of $27.3 million. The net loss of $18.6 million for the six months ended June 30, 2021 (net loss of $17.0 million for 2020) is after $45.4 million in depreciation and amortization ($40.6 million in 2020), which was offset by a deferred tax recovery of $4.2 million; both non-cash items.
Our revenue and NOI from Existing Self Storage, a non-IFRS measure, increased by 16.6% and 18.8%, compared to the same period last year. FFO, a non-IFRS measure, were $23.0 million compared to $17.6 million for the same period in 2020, a 30.4% increase year over year. AFFO, a non-IFRS measure, were $26.6 million compared to $19.4 million for the same period in 2020, a 37.5% increase year over year.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see the Corporation’s Management’s Discussion & Analysis for the three and six months ended June 30, 2021 filed on SEDAR at www.sedar.com.
StorageVault is increasing its quarterly dividend by 0.5% beginning Q3 2021 to $0.002748 per common share.
The COVID-19 Pandemic
Since the commencement of the pandemic and for the future benefit of the Corporation, we modified our operating platform to continue to meet the strong demand for our services – these changes included improving our virtual systems to offer no-contact rental processes, installation of plexiglass partitions and limiting the number of customers in our offices to one at a time. Our teams are fully employed and clients are able to safely store and access their valuables. We are proud of our team for continuing to adapt to new processes and for their commitment to providing exceptional client and community service.
To date in fiscal 2021, we continue to experience a significant increase in leads and rentals which has resulted in higher occupancies and rental rates across our portfolio. These positive trends resulted in the Corporation achieving strong same store revenue and NOI growth. While clients may be further impacted, including through unemployment, the Corporation has experienced no meaningful increases in accounts receivable.
Since the start of the COVID-19 pandemic, the Corporation continued to execute on our strategies to attract clients through search engine marketing, improving our online presence, virtual community connection programs and the development of a national platform and initiatives to fulfill last mile storage needs. These efforts have allowed us to attract clients who are leveraging our national footprint to offer a complete storage, inventory management and mobilization solution through our self and portable storage and records management infrastructures.
As at June 30, 2021, we continue to generate significant cash flows from our operations, with $27.3 million in cash on hand. Our balance sheet, along with our strong relationships with our lenders, provides us with sufficient borrowing capacity, refinancing and liquidity options to take advantage of acquisition opportunities that meet our requirements, evidenced by the $140.7 million in acquisitions announced to date in fiscal 2021.
StorageVault is focused on owning and operating storage in the top markets in Canada. Our goal is to have multiple stores in each market, with complementary portable storage units and records management storage services, to take advantage of economies of scale. Our growth strategy is focused on acquisitions, organic growth, expansion of our existing stores and expansion of our portable storage and record management businesses.
For comprehensive disclosure of StorageVault’s performance for the three and six months ended June 30, 2021 and its financial position as at such date, please see StorageVault’s Unaudited Interim Consolidated Financial Statements and Management’s Discussion and Analysis for the three and six months ended June 30, 2021 filed on SEDAR at www.sedar.com.
Non-IFRS Financial Measures
Management uses both IFRS and non-IFRS Measures to assess the financial and operating performance of the Corporation’s operations. These non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The non-IFRS Measures referenced in this news release include the following:
- Net Operating Income (“NOI”) – NOI is defined as storage and related services revenue less related property operating costs. NOI does not include interest expense or income, depreciation and amortization, corporate administrative costs, stock based compensation costs or taxes. NOI assists management in assessing profitability and valuation from principal business activities.
- Funds from Operations (“FFO”) – FFO is defined as net income (loss) excluding gains or losses from the sale of depreciable real estate, plus depreciation and amortization, stock based compensation expenses, and deferred income taxes; and after adjustments for equity accounted entities and non-controlling interests. The Corporation believes that FFO can be a beneficial measure, when combined with primary IFRS measures, to assist in the evaluation of the Corporation’s ability to generate cash and evaluate its return on investments as it excludes the effects of real estate amortization and gains and losses from the sale of real estate, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance.
- Adjusted Funds from Operations (“AFFO”) – AFFO is defined as FFO plus acquisition and integration costs. Acquisition and integration costs are one time in nature to the specific assets purchased in the current period or pending and are expensed under IFRS.
- Existing Self Storage – means stores that StorageVault has owned or leased since the beginning of the previous fiscal year.
NOI, FFO, AFFO and Existing Self Storage, should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from StorageVault’s comprehensive operations, respectively, or other measures calculated in accordance with IFRS. NOI, FFO and AFFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. Existing Self Storage should not be considered a measure of StorageVault’s comprehensive operations. NOI, FFO, AFFO and Existing Self Storage are simply additional measures of operating performance which highlight trends in StorageVault’s core business that may not otherwise be apparent when relying solely on IFRS financial measures.StorageVault’s management also uses these non-IFRS measures in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, the Corporation’s definitions of NOI, FFO, AFFO and Existing Self Storage may differ from that of other issuers.
About StorageVault Canada Inc.
StorageVault owns and operates 223 storage locations in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia. StorageVault owns 184 of these locations plus over 4,500 portable storage units representing 10.2 million rentable square feet on over 600 acres of land. StorageVault also provides last mile storage and logistics solutions and professional records management services, such as document and media storage, imaging and shredding services.
For further information, contact Mr. Steven Scott or Mr. Iqbal Khan:
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information regarding: statements regarding StorageVault’s expected future performance, including the strong market in 2021 and an increase in the acquisition outlook to $200 million for 2021; the timing for the full benefits of the Q4 2020 acquisitions and for StorageVault to be cash flow positive; StorageVault’s response to the COVID-19 pandemic, the potential anticipated impact of COVID-19 on StorageVault’s expected future performance, the impact of COVID-19 on its customers and StorageVault’s beliefs regarding its ability to navigate the pandemic; statements regarding StorageVault’s liquidity position and its ability to meet liquidity requirements and to take advantage of acquisition opportunities as a result of its liquidity position; StorageVault’s beliefs regarding the resiliency of its business and its customers’ needs for storage; and StorageVault’s strategic objectives, goals, growth strategy and focus, including focusing on acquisitions, improving StorageVault’s operational performance, expansion of StorageVault’s existing stores and expansion of StorageVault’s portable storage and records management businesses. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects StorageVault’s current beliefs and is based on information currently available to StorageVault and on assumptions StorageVault believes are reasonable. These assumptions include, but are not limited to: the level of activity in the storage business and the economy generally; consumer interest in StorageVault’s services and products; competition and StorageVault’s competitive advantages; trends in the storage industry, including macro-trends in relation to increased growth and growth in the portable storage business; the availability of attractive and financially competitive asset acquisitions in the future; the potential closing of previously announced acquisitions, if any, continuing to proceed as they have progressed to date and StorageVault’s continued response and ability to navigate the COVID-19 pandemic being consistent with, or better than, its ability and response to date. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of StorageVault to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals; the actual results of StorageVault’s future operations; competition; changes in legislation, including environmental legislation, affecting StorageVault; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; lack of qualified, skilled labour or loss of key individuals; and risks related to the COVID-19 pandemic including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible national or global recession; the impact that the COVID-19 pandemic may have on StorageVault may include: a short-term delay in payments from customers, an increase in accounts receivable and an increase of losses on accounts receivable; decreased demand for the services that StorageVault offers; and a deterioration of financial markets that could limit StorageVault’s ability to obtain external financing. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in StorageVault’s disclosure documents on the SEDAR website at www.sedar.com. Although StorageVault has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of StorageVault as of the date of this news release and, accordingly, is subject to change after such date. However, StorageVault expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.
The amount of potential future acquisitions by the Corporation in fiscal 2021 contained in this news release may be considered a financial outlook as defined by applicable securities legislation. Such information and any other financial outlooks have been approved by management of the Corporation as of the date hereof. Such financial outlooks are provided for the purpose of presenting information about management's current expectations and goals relating to the future business of the Corporation. Readers are cautioned that reliance on such information may not be appropriate for other purposes.