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News

September 15, 2020

StorageVault Reports 2020 Second Quarter Results and Increases Dividend

TORONTO, Aug. 13, 2020 (GLOBE NEWSWIRE) — STORAGEVAULT CANADA INC. (“StorageVault” or the “Corporation”) (SVI-TSX-V) reported the Corporation’s 2020 second quarter results and increases its dividend. Iqbal Khan, Chief Financial Officer, commented:

“Despite the impacts of COVID-19, we achieved 3% year over year increases in same store revenue and NOI.  Our results were muted due to reduced rental activity in a period in which we would normally see a surge in activity due to the seasonal nature of our business. Furthermore, we paused rent increases, late charges and administrative fees; by the end of the quarter we re-introduced these where appropriate.  With our balance sheet, which was further strengthened by the $75 million unsecured hybrid debenture, our cash flow, our amazing team and operating platform, we are in a great position to navigate forward and will continue to be disciplined purchasers of assets, while focusing on innovating and streamlining our operations.”

2020 Second Quarter Results
Revenue for the second quarter 2020 increased to $37.4 million compared to $34.3 million in Q2 2019 and net operating income (“NOI”), a non IFRS measure, grew to $25.3 million from $23.1 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 $15.9 million at the end of the quarter.  The Q2 2020 net loss of $8.7 million (net loss of $16.3 million for Q2 2019) is after $20.5 million of depreciation and amortization and deferred tax recovery recorded in the quarter of $2.1 million; both amounts are non-cash items.

Despite the impacts of COVID-19, the pausing of rent increases, late charges and administrative fees for a significant portion of the quarter, revenue and NOI from existing self storage stores increased by 3.0% and 3.1%, compared to the same period last year. Funds from operations (“FFO”), a non IFRS measure, were $9.7 million for Q2 2020 compared to $6.2 million in Q2 2019, a 55.6% increase year over year. Adjusted funds from operations (“AFFO”), a non IFRS measure, were $10.5 million for Q2 2020 compared to $9.2 million in Q2 2019, a 14.8% increase.

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, 2020 filed on SEDAR at www.sedar.com.

2020 Six Months Year to Date Results
Revenue for the six months ended June 30, 2020 increased to $73.3 million from $60.5 million and NOI, a non-IFRS measure, grew to $48.3 million from $40.6 million, for the comparative period. For the six months ended June 30, 2020, cash flow from operations was $18.1 million and when combined with our financing and investing activities resulted in a cash balance of $15.9 million.  The net loss of $17.0 million for the six months ended June 30, 2020 (net loss of $25.2 million for 2019) is after $40.6 million in depreciation and amortization, which was offset by a deferred tax recovery of $6.0 million; both non-cash items.

Our revenue and NOI from Existing Self Storage, a non-IFRS measure, increased by 4.9% and 5.0%, compared to the same period last year.  FFO, a non-IFRS measure, were $17.6 million compared to $11.5 million for the same period in 2019, a 53.1% increase year over year. AFFO, a non-IFRS measure, were $19.4 million compared to $16.5 million for the same period in 2019, a 17.4% 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, 2020 filed on SEDAR at www.sedar.com.

Increased Dividend
StorageVault is increasing its quarterly dividend by 0.5% beginning Q3 2020 to $0.002693 per common share.

The COVID-19 Pandemic
For a significant portion of Q2 2020 and to meet the continued demand for our services, we modified our operations and remotely operated our stores and reservation centres.  Our teams were fully employed and clients were able to safely store and access their valuables.  To reopen our store offices, we installed plexiglass partitions, limiting the number of customers in our offices to one at a time and continued to improve and offer our no-contact rental processes.  We are extremely proud of our team for continuing to adapt to new processes and for being committed to providing exceptional client and community service.

As a result of COVID-19, we experienced reduced rental activity during the quarter, a period in which we would normally see a surge in activity due to the seasonal nature of our business. Revenues were further impacted as we paused rent increases, late charges and administrative fees; by the end of the quarter we re-introduced these where appropriate.  While clients may be further impacted, including through unemployment, which may reduce the ability to pay, the Corporation has experienced no meaningful increases in accounts receivable.

The Corporation continues 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.  We are capable of leveraging our national footprint to offer a complete storage, inventory management and mobilization solution through our self and portable storage and records management infrastructure.  These efforts allowed us to partially mitigate the decline in leads from the lack of transitional activities experienced across Canada and has placed us in a strong position as we enter the back half of the year.

As at June 30, 2020, we continue to generate significant cash flows from our operations, with $15.9 million in cash on hand and $60.0 million of credit available.  Subsequent to the quarter, the Corporation further strengthened its balance sheet by completing a $75 million bought deal offering of 5.75% senior unsecured hybrid debentures.  Our balance sheet, along with our strong relationships with our lenders, provide us with sufficient borrowing capacity, refinancing and liquidity options to take advantage of acquisition opportunities that meet our requirements.

Our Strategy
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.

Further Information
For comprehensive disclosure of StorageVault’s performance for the three and six months ended June 30, 2020 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, 2020 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:

  1. 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.
  1. 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.
  1. 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.
  1. 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 202 storage locations in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia. StorageVault owns 154 of these locations plus over 4,600 portable storage units representing over 8.2 million rentable square feet.

For further information, contact Mr. Steven Scott or Mr. Iqbal Khan:

Tel: 1-877-622-0205
ir@storagevaultcanada.com

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.

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