Great results and dividend increase StorageVault Reports Fiscal 2021 Annual Results; Highlighting Exceptional Growth in NOI and FFO, $270.2 Million in Acquisitions; Provides 2022 Outlook; Increases Dividend
February 23, 2022 17:30 ET | Source: StorageVault Canada Inc.
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TORONTO, Feb. 23, 2022 (GLOBE NEWSWIRE) -- STORAGEVAULT CANADA INC. (“StorageVault” or the “Corporation”) (SVI-TSX) today reported the Corporation’s full year 2021 audited results. Iqbal Khan, Chief Financial Officer, commented:
“Strong fundamentals combined with the disciplined execution by our team resulted in exceptional same store performance, with 18.4% year over year increase in revenue and 20.2% increase in NOI. We significantly beat our acquisition target with $270.2 million in accretive acquisitions. Looking ahead, we expect to continue to increase our cash flow through integrating and innovating operations, occupancy growth and revenue management, expand and renovate existing stores and complete in excess of $100 million of acquisitions in 2022. The fundamentals of our business positions us well in an inflationary environment.”
2021 Full Year Audited Results
Revenue increased to $208.7 million in 2021 from $155.5 million in 2020 and net operating income (“NOI”), a non-IFRS measure, grew to $139.0 million in 2021 from $104.2 million in 2020. Cash flow from operations grew to $59.0 million in 2021 from $38.5 million in 2020 and when combined with our financing and investing activities resulted in a cash balance of $25.1 million at the end of the year. The net loss of $35.9 million for the year (net loss of $33.3 million for 2020) is after $93.2 million in depreciation and amortization, $11.3 million in stock based compensation and are offset by the recovery of $7.8 million of deferred tax and $6.1 million of unrealized gain on derivative financial instruments relating to the economic hedging of our stock based compensation, all non-cash items, recorded in 2021.
Our strong revenue management platform and occupancy growth resulted in Revenue and NOI growth from existing self storage, a non-IFRS measure, of 18.4% and 20.2%, over the prior year. Funds from operations (“FFO”), a non-IFRS measure, were $54.6 million in 2021 compared to $35.4 million for 2020, a 54.2% increase year over year. Adjusted funds from operations (“AFFO), a non-IFRS measure, were $62.7 million for 2021 compared to $42.8 million for 2020, a 46.3% increase year over year.
Annualizing results from our 2021 acquisitions would have resulted in revenue of $220.5 million, NOI of $146.8 million, FFO of $60.9 million and AFFO of $68.9 million. See definition of “Annualized Information” below.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see pages 11 through 17 of the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2021 filed on SEDAR at www.sedar.com.
2021 Fourth Quarter Results
Revenue for Q4 2021 increased to $56.8 million compared to $42.2 million in Q4 2020 and NOI grew to $37.8 million from $28.4 million for the comparative period. As mentioned above, our cash flow from operations increased year over year and when combined with our financing and investing activities resulted in a cash balance of $25.1 million at the end of the year. The Q4 2021 net loss of $13.0 million (net loss of $10.0 million for Q4 2020) is after $24.5 million of depreciation and amortization, $10.8 million in stock based compensation and is offset by the recovery of $1.5 million of deferred tax and $6.1 million of unrealized gain on derivative financial instruments relating to the economic hedging of our stock based compensation. All amounts are non-cash items.
As a result of our revenue management program, strong occupancy and operational efficiency, Revenue and NOI from existing self storage stores increased by 16.9% and 17.5%, compared to the same period last year. Funds from operations were $14.6 million for Q4 2021 compared to $6.3 million in Q4 2020, a 133.5% increase. Adjusted funds from operations were $17.3 million for Q4 2021 compared to $11.3 million in Q4 2020, a 53.3% increase.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see pages 11 through 17 of the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2021 filed on SEDAR at www.sedar.com.
Increased Dividend
Based on the strong quarterly and year over year results, StorageVault is increasing its quarterly dividend by 0.5% beginning Q1 2022 to $0.002775 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 “self-serve” rental processes, installation of plexiglass partitions and limiting the number of customers in our offices to one at a time. Our teams have been continuously 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 committing to provide exceptional client and community service.
In fiscal 2021, we experienced 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 storage, portable storage, records management and FlexSpace Logistics infrastructures.
As at December 31, 2021, we continue to generate significant cash flows from our operations, with $25.1 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 $270.2 million in acquisitions completed in fiscal 2021.
Our Strategy
StorageVault is focused on owning and operating stores 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, portable storage, information and records management and FlexSpace Logistics businesses.
Further Information
For comprehensive disclosure of StorageVault’s performance for the year ended December 31, 2021 and its financial position as at such date, please see StorageVault’s Consolidated Financial Statements, Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2021 filed on SEDAR at www.sedar.com.
Non-IFRS Measures
Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company’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, unrealized gains or losses from interest rate swaps 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 – defined as 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.
Annualized Information
The Corporation purchased 29 stores during fiscal 2021 and the revenues and operating expenses from each acquisition are reflected in the December 31, 2021 financial statements from the date of acquisition forward for these properties. In order to provide the reader with a greater understanding of potential results from a full year of operations with the acquired assets, the Corporation has prepared an unaudited estimated Annualized NOI and FFO statement annualizing the revenues and expenses estimated as if the properties were purchased as of January 1, 2021 and owned for the entire 12 month period. For further information on the estimated annualized results referenced above in this news release, please refer to “Annualized Net Operating Income and Funds from Operations” set forth in the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2021 filed on SEDAR at www.sedar.com.
About StorageVault Canada Inc.
StorageVault owns and operates 230 storage locations across Canada. StorageVault owns 197 of these locations plus over 4,500 portable storage units representing over 10.8 million rentable square feet on over 630 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:
Tel: 1-877-622-0205
ir@storagevaultcanada.com