Deep Value Hidden In The Shares Of Global Self Storage
GLOBAL SELF STORAGE - SELF
NASDAQ
Current Dividend Yield
6.5% - REPORT
Global Self Storage Reports Fourth
Quarter and Full Year 2018 Results
Company Achieves
Dividend Coverage for Third Consecutive Quarter and Full Year 2018
Due to Continued FFO and AFFO Growth
Q4 2018 vs. Q4 2017 Highlights
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The Company’s total revenues increased 6.6% to $2.1 million,
total expenses increased 2.1% to $1.8 million, and operating
income increased 49.5% to $276,000.
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Net income totaled approximately $75,000, or $0.01 per fully
diluted share, for the fourth quarter of 2018 compared to net
loss of $21,000, or $0.00 per fully diluted share, for the
fourth quarter of 2017.
-
Funds from Operations (“FFO”) and Adjusted FFO (“AFFO”) totaled
$0.05 and $0.08 per share, respectively, for the fourth quarter
of 2018 compared to $0.04 and $0.04 per share, respectively, for
the fourth quarter of 2017. This represents total FFO and AFFO
growth of 20.3% and 79.5%, respectively, for the fourth quarter
of 2018 versus the same time period in 2017.
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Same-store revenues increased 5.3% to $1.9 million.
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Same-store net operating income (“NOI”) increased 28.4% to $1.1
million.
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Combined same-store and non same-store (“Combined store”)
revenues increased 6.6% to $2.1 million.
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Combined store NOI increased 28.3% to $1.3 million.
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Combined store leasable square footage at quarter end increased
2.3% to 766,000.
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Combined store overall square foot occupancy at quarter end
increased 50 basis points to 92.5%.
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Combined store total annualized revenue per leased square foot
increased 3.6% to $11.71.
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Maintained quarterly dividend of $0.065 per share of common
stock.
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The Company’s total revenues increased 8.5% to $8.1 million,
total expenses decreased 1.6% to $6.7 million, and operating
income increased 110.4% to $1.4 million.
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Net income totaled approximately $619,000, or $0.08 per fully
diluted share, for the full year ended December 31, 2018
compared to net loss of $146,000, or $0.02 per fully diluted
share, for the full year ended December 31, 2017.
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FFO and AFFO totaled $0.26 and $0.30 per share, respectively,
for the full year ended December 31, 2018 compared to $0.20 and
$0.21 per share, respectively, for the full year ended December
31, 2017. This represents total FFO and
AFFO growth of 28.9% and 39.6%, respectively, for the full year
ended December 31, 2018 versus the same time period in 2017.
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Same-store revenues increased 7.7% to $7.3 million.
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Same-store NOI increased 11.7% to $4.3 million.
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Combined store revenues increased 8.6% to $8.1 million.
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Combined store NOI increased 12.0% to $4.8 million.
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Combined store total annualized revenue per leased square foot
increased 5.5% to $11.46.
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Distributed dividends of $0.26 per share of common stock.
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Capital resources totaled $3.1 million, comprised of $1.5
million of cash and cash equivalents and $1.6 million of
marketable securities. In addition, the Company secured a $10
million revolving credit line facility in December 2018, with
interest payable at one-month LIBOR plus 3.00%.
“Our results for the fourth quarter
demonstrated once again our continued success in driving same-store
revenue growth, maintaining expenses, and significantly expanding
NOI from our properties,” said President and Chief Executive Officer
of the Company, Mark C. Winmill. “We
achieved record results in both the quarter and year, but more
importantly, achieved full dividend coverage from FFO and AFFO for
the full year of 2018—a significant milestone in our journey of
maximizing shareholder value. Driving this achievement was our
ability to continue successfully increasing rental rates, while
managing our costs and maintaining our preferred 90%+ occupancy
levels.”
The Company’s fourth quarter total
revenues increased 6.6%, total expenses increased 2.1%, and
operating income increased 49.5%. The increase in operating income
was driven primarily by the expansion of the Company’s Merrillville,
IN store, as well as higher rental and occupancy rates. For the
fourth quarter of 2018, net income totaled $75,000 compared to net
loss of $21,000 for the fourth quarter of 2017.
The Company's same-store portfolio for
the fourth quarter of 2018 included ten of its eleven stores,
representing 87.2% of store NOI for the quarter.
For the fourth quarter of 2018, Combined
store revenues increased 6.6% to $2.1 million compared with $1.9
million for the fourth quarter of 2017. The increase was driven
primarily by a 2.9% increase in net leased square footage and by the
results of the Company’s revenue rate management program of raising
existing tenant rates. The increase in net leased square footage was
a result of the Company’s Merrillville, IN store expansion, which
was completed in January 2018.
Net income totaled approximately $75,000,
or $0.01 per share, in the fourth quarter of 2018 compared to a net
loss of $21,000 or $0.00 per share, for the fourth quarter of 2017.
FFO and AFFO for the Fourth Quarter of 2018
(1) For purposes of calculating FFO and AFFO per share, unvested
restricted stock is not included.
Full Year Ended December 31, 2018
The Company’s total revenues for the full
year ended December 31, 2018 increased 8.5%, total expenses
decreased 1.6%, and operating income increased 110.4%. The increase
in operating income was driven primarily by the expansion of the
Company’s Merrillville, IN store, as well as higher rental and
occupancy rates. For the full year ended December 31, 2018, net
income totaled $619,000 compared to a net loss of $146,000 for the
same period in 2017.
Same-Store Results for the Full Year
Ended December 31, 2018
The Company's same-store portfolio for
the full year ended December 31, 2018 included ten of its eleven
stores, representing 88.1% of store NOI for the period.
Same-store operating expenses for the
full year ended December 31, 2018 totaled $3.0 million compared with
$2.9 million for the full year ended December 31, 2017. The increase
was primarily driven by higher store level employment costs and
administrative expenses, which were partially offset by reduced
advertising and marketing costs and reduced property taxes as
described above. The Company currently expects same-store property
tax expenses to increase during 2019, primarily due to an expected
phaseout of the Class 8 tax incentive granted to the Dolton, IL
property.
For the full year ended December 31,
2018, Combined store revenues increased 8.6% to $8.1 million
compared with $7.5 million for the full year ended December 31,
2017. The increase was driven primarily by a 2.9% increase in net
leased square footage, due primarily to the Merrillville, IN
property expansion, and by the results of the Company’s revenue rate
management program of raising existing tenant rates.
Net income totaled approximately
$619,000, or $0.08 per fully diluted share, for the full year ended
December 31, 2018 compared to a net loss of $146,000 or $0.02 per
fully diluted share, for the full year ended December 31, 2017.
(1) For purposes of calculating FFO and
AFFO per share, unvested restricted stock is not included.
On December 3, 2018, the Company declared
a quarterly dividend of $0.065 per share, consistent with the
quarterly dividend from a year ago and last quarter.
At December 31, 2018, cash, cash
equivalents, and marketable equity securities totaled $3.1 million
compared with $3.7 million at December 31, 2017.
Global Self Storage, Inc. is a
self-administered and self-managed REIT that owns, operates,
manages, acquires, develops and redevelops self storage properties
in the United States. The Company's self storage properties are
designed to offer affordable, easily accessible and secure storage
space for residential and commercial customers. It currently owns
and operates, through its wholly owned subsidiaries, eleven self
storage properties located in Connecticut, Illinois, Indiana, New
York, Ohio, Pennsylvania, and South Carolina. For more information,
go to
http://ir.globalselfstorage.us/
or visit our self storage customer site at
www.globalselfstorage.us.
You can also follow us on
Twitter,
LinkedIn
and
Facebook.
This press release contains certain
non-GAAP financial measures. FFO and FFO per share are non-GAAP
measures defined by the National Association of Real Estate
Investment Trusts (“NAREIT”) and are considered helpful measures of
REIT performance by REITs and many REIT analysts. NAREIT defines FFO
as a REIT’s net income, excluding gains or losses from sales of
property, and adding back real estate depreciation and amortization.
FFO and FFO per share are not a substitute for net income or
earnings per share. FFO is not a substitute for GAAP net cash flow
in evaluating our liquidity or ability to pay dividends, because it
excludes financing activities presented on our statements of cash
flows. In addition, other REITs may compute these measures
differently, so comparisons among REITs may not be helpful. However,
the Company believes that to further understand the performance of
its stores, FFO should be considered along with the net income and
cash flows reported in accordance with GAAP and as presented in the
Company’s financial statements.
AFFO represents FFO excluding the effects
of business development and acquisition related costs and
non-recurring items, which we believe are not indicative of the
Company’s operating results. We present AFFO because we believe it
is a helpful measure in understanding our results of operations
insofar as we believe that the items noted above that are included
in FFO, but excluded from AFFO, are not indicative of our ongoing
operating results. We also believe that the investment community
considers our AFFO (or similar measures using different terminology)
when evaluating us. Because other REITs or real estate companies may
not compute AFFO in the same manner as we do, and may use different
terminology, our computation of AFFO may not be comparable to AFFO
reported by other REITs or real estate companies.
We believe net operating income or “NOI”
is a meaningful measure of operating performance because we utilize
NOI in making decisions with respect to, among other things, capital
allocations, determining current store values, evaluating store
performance, and in comparing period-to-period and market-to-market
store operating results. In addition, we believe the investment
community utilizes NOI in determining operating performance and real
estate values, and does not consider depreciation expense because it
is based upon historical cost. NOI is defined as net store earnings
before general and administrative expenses, interest, taxes,
depreciation, and amortization. A reconciliation of this measure to
its most directly comparable GAAP measure is provided later in this
release.
NOI is not a substitute for net income,
net operating cash flow, or other related GAAP financial measures,
in evaluating our operating results.
We consider our same-store portfolio to
consist of only those stores owned and operated on a stabilized
basis at the beginning and at the end of the applicable periods
presented. We consider a store to be stabilized once it has achieved
an occupancy rate that we believe, based on our assessment of market
specific data, is representative of similar self storage assets in
the applicable market for a full year measured as of the most recent
January 1 and has not been significantly damaged by natural disaster
or undergone significant renovation or expansion. We believe that
same-store results are useful to investors in evaluating our
performance because they provide information relating to changes in
store-level operating performance without taking into account the
effects of acquisitions, dispositions or new ground-up developments.
At December 31, 2018, we owned ten same-store properties and one non
same-store property. The Company believes that by providing
same-store results from a stabilized pool of stores, with
accompanying operating metrics including, but not limited to
variances in occupancy, rental revenue, operating expenses, NOI,
etc., stockholders and potential investors are able to evaluate
operating performance without the effects of non-stabilized
occupancy levels, rent levels, expense levels, acquisitions or
completed developments. Same-store results should not be used as a
basis for future same-store performance or for the performance of
the Company's stores as a whole.
Certain information presented in this
press release may contain “forward-looking statements” within the
meaning of the federal securities laws
including, but not limited to, the
Private Securities Litigation Reform Act of 1995. Forward looking
statements include statements concerning the Company’s plans,
objectives, goals, strategies, future events, future revenues or
performance, capital expenditures, financing needs, plans or
intentions, and other information that is not historical
information. In some cases, forward looking statements can be
identified by terminology such as “believes,” “plans,” “intends,”
“expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or
the negative of such terms or other comparable terminology, or by
discussions of strategy. All forward-looking statements by the
Company involve known and unknown risks, uncertainties and other
factors, many of which are beyond the control of the Company, which
may cause the Company’s actual results to be materially different
from those expressed or implied by such statements. The Company may
also make additional forward looking statements from time to time.
All such subsequent forward-looking statements, whether written or
oral, by the Company or on its behalf, are also expressly qualified
by these cautionary statements. Investors should carefully consider
the risks, uncertainties, and other factors, together with all of
the other information included in the Company’s filings with the
Securities and Exchange Commission, and similar information. All
forward-looking statements, including without limitation, the
Company’s examination of historical operating trends and estimates
of future earnings, are based upon the Company’s current
expectations and various assumptions. The Company’s expectations,
beliefs and projections are expressed in good faith, but there can
be no assurance that the Company’s expectations, beliefs and
projections will result or be achieved. All forward looking
statements apply only as of the date made. The Company undertakes no
obligation to publicly update or revise forward looking statements
which may be made to reflect events or circumstances after the date
made or to reflect the occurrence of unanticipated events. The
amount, nature, and/or frequency of dividends paid by the Company
may be changed at any time without notice.
Contacts:
Global Self Storage, Inc.
Mark C. Winmill
President and Chief Executive Officer
1-212-785-0900, ext. 201
Liolios Investor Relations
Scott Liolios or Najim Mostamand, CFA
1-949-574-3860
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Global Self Storage, Inc.
(Unaudited)
Global Self
Storage, Inc.
Consolidated Statements of Operations
(Unaudited)
Reconciliation of
GAAP Net Income (Loss) to Same-Store Net Operating Income
The following table presents a
reconciliation of same-store net operating income to net income
(loss) as presented on our unaudited consolidated statements of
operations for the periods indicated:
Reconciliation of
GAAP Net Income (Loss) to Combined Same-Store and Non Same-Store Net
Operating Income
The following
table presents a reconciliation of combined same-store and
non same-store net operating income to net income (loss) as
presented on our unaudited consolidated statements of operations for
the periods indicated: