WAYNE, PA--(Marketwire - August 5, 2010) - U-Store-It Trust (
NYSE:
YSI) announced its
operating results for the three and six months ended June 30, 2010. "The
solid performance of our portfolio was consistent with our expectations
entering the quarter. Occupancy on our same-store portfolio increased 310
basis points from our seasonal low on March 11, 2010 of 74.5% to 77.6% at
quarter end, and continued on to 78.3% at the end of July, reflecting a
more traditional spring leasing environment. We are pleased with our return
to positive net operating income growth on our same-store portfolio and
expect a return to positive same-store revenue growth over the second half
of this year," said Dean Jernigan, Chief Executive Officer of U-Store-It.
Key Metrics for the Quarter and Six Months Ended June 30, 2010
-- Funds from Operations ("FFO")
-- FFO of $0.11 per share for the three months ended June 30, 2010
compared to our expectation entering the quarter of $0.10 to $0.11
per share.
-- Weighted Average Shares and Units Outstanding
-- Weighted average shares and units outstanding were 98.8 million and
63.3 million for the second quarter of 2010 and 2009, respectively.
-- Same-store Revenue (364 same-store facilities)
-- 2nd quarter - Same-store total revenue decreased 0.6% from the
second quarter of 2009.
-- Six months ended - Same-store total revenue decreased 1.9% in 2010
over 2009.
-- Same-store Property Operating Expenses
-- 2nd quarter - Same-store property operating expenses decreased 4.4%
when compared to the second quarter of 2009.
-- Six months ended - Same-store property operating expenses decreased
3.5% from 2009 to 2010.
-- Same-store Net Operating Income ("NOI")
-- 2nd quarter - Same-store NOI increased 2.1% from the second quarter
of 2009.
-- Six months ended - Same-store NOI decreased 0.8% from the first six
months of 2009.
-- Realized Annual Rent
-- 2nd quarter - Same-store realized annual rent per occupied square
foot decreased to $10.93 or 2.3% compared to the second quarter of
2009.
-- Six months ended - Same-store realized annual rent per occupied
square foot decreased to $10.97 or 2.2% compared to 2009.
-- Same-store Physical Occupancy
-- At June 30, 2010, ending physical occupancy increased 90 basis
points to 77.6% compared to 76.7% at June 30, 2009.
-- 2nd quarter - Average physical occupancy was 76.5% for the second
quarter of 2010 on the same-store facilities, an increase of 110
basis points compared to 75.4% for the second quarter of 2009.
-- Six months ended - Average physical occupancy was 75.8% for the six
months ended June 30, 2010 on the same-store facilities compared to
76.0% for the six months ended June 30, 2009.
-- Ending sequential quarterly occupancy increased 250 basis points
(77.6% as of June 30, 2010 compared to 75.1% as of March 31, 2010)
compared to an increase of 140 basis points in the same period last
year (76.7% as of June 30, 2009 compared to 75.3% as of March 31,
2009).
-- Third Party Management
-- At June 30, 2010, the Company managed 119 properties totaling 7.9
million square feet. The Company had no properties under
management as of June 30, 2009.
-- 2nd quarter - $0.6 million of management fee revenue was generated
during the quarter.
"In addition to positive internal growth fundamentals we are having
continued success in our external growth initiatives," said Christopher
Marr, President and Chief Investment Officer. Mr. Marr went on to say, "We
have expanded by 32% our square feet under management during 2010,
increasing from 24.1 million to 31.8 million with the addition of 111
facilities to our third-party management platform. Subsequent to the end of
the quarter, we closed on a $6 million acquisition in the Dallas, Texas
metro area and have a pipeline of additional acquisition opportunities that
we expect will provide continued growth as we move through the second half
of the year."
Funds from Operations
FFO for the second quarter of 2010 was $10.6 million, compared to $13.2
million for the second quarter of 2009. FFO per share was $0.11 per share
for the second quarter of 2010, compared to $0.21 per share for the same
quarter of last year.
Operating Results
The Company reported a net loss attributable to the Company of $4.5 million
or $0.05 per common share in the second quarter of 2010, compared to a net
loss attributable to the Company of $2.8 million or $0.05 per common share
in the second quarter of 2009. Total revenues increased $0.5 million and
total property operating expenses decreased $0.5 million in the second
quarter of 2010, compared to the same period in 2009. Increases in total
revenues are attributable to increased occupancy levels in the same-store
portfolio and revenues generated from our third-party management business
during the 2010 period as compared to the 2009 period. Decreases in
property operating expenses are attributable to a reduction in utility and
repair and maintenance expenses, offset by increases in property insurance
and other expenses.
Interest expense decreased approximately $1.9 million in the second quarter
of 2010, compared to the second quarter of 2009, primarily as a result of
lower interest rates and lower outstanding principal balances during the
second quarter of 2010 as compared to the same period in 2009.
Loan procurement amortization expense increased approximately $1.1 million
in the second quarter of 2010, compared to the second quarter of 2009, due
to loan procurement cost amortization associated with the $450 million
Secured Credit Facility that closed in December of 2009 and the additional
$116.1 million of secured property level loans the Company obtained during
2009.
The Company's 367 owned facilities, containing 23.7 million rentable square
feet, had a physical occupancy at June 30, 2010 of 77.6% and an average
physical occupancy for the quarter ended June 30, 2010 of 76.5%.
Same-Store Results
The Company's same-store pool at June 30, 2010 represented 364 facilities
containing approximately 23.6 million rentable square feet and included
approximately 99.2% of the aggregate rentable square feet of the Company's
367 owned facilities. These same-store facilities represent approximately
99.8% of property net operating income for the quarter ended June 30, 2010.
The same-store average physical occupancy for the second quarter of 2010
was 76.5% compared to 75.4% for the same quarter of last year. Same-store
net rental income for the second quarter of 2010 decreased 0.8% over the
same period in 2009. Same-store total revenues decreased 0.6% and
same-store operating expenses decreased 4.4% as compared to the second
quarter of 2009. Same-store net operating income increased 2.1% in the
second quarter of 2010 compared to the same quarter of 2009.
For the six months ended June 30, 2010, same-store total revenues,
operating expenses and net operating income decreased 1.9%, 3.5%, and 0.8%,
respectively, as compared to the results for the six months ended June 30,
2009. Average physical occupancy of the same-store pool for 2010 was 75.8%
as compared to 76.0% during 2009. Ending occupancy for our same-store
portfolio was 77.6% and 76.7% as of June 30, 2010 and 2009, respectively.
Investment Activity
In April, the Company acquired management and other contracts from United
Stor-All Management, LLC adding 85 managed facilities located in 16 states
and the District of Columbia and containing approximately 5.4 million
square feet.
On July 1, the Company announced it was awarded the contract to manage 25
self-storage facilities located in eight states containing approximately
1.9 million rentable square feet. The self-storage facilities are located
in California, Florida, Georgia, Illinois, Massachusetts, Michigan, New
Jersey and New York.
As of the date of this release the Company manages 119 facilities
containing approximately 7.9 million square feet and located in 17 states
and the District of Columbia.
On July 30, the Company acquired a self-storage facility located in
suburban Dallas, Texas for $6.0 million. The facility was 80% physically
occupied at closing and was acquired free and clear of any encumbrances.
With this acquisition, the Company now owns or operates 17 facilities in
the Dallas area.
Balance Sheet
During the six months ended June 30, 2010, the Company used cash on hand to
repay an $83.3 million CMBS loan that was scheduled to mature in May 2010
and $15.5 million of additional loans maturing during the period.
Additionally, during the year, the Company was repaid $19.9 million in
notes receivable related to seller financings the Company provided as part
of portfolio dispositions in 2009.
Quarterly Dividend
On June 2, 2010, the Company declared a dividend of $0.025 per share. The
dividend was paid on July 22, 2010, to shareholders of record on July 7,
2010.
2010 Financial Outlook
"We are improving our same-store guidance, reflecting our solid performance
for the first half of the year. Positive results from our spring and
summer leasing season have provided us with increased confidence for the
second half of 2010," said Chief Financial Officer Tim Martin. "The
positive impact of additional external growth opportunities closing in the
second half of the year is not factored into our guidance. We will revise
our expectations as appropriate based on the timing and volume of
closings."
The Company is adjusting its previously issued estimates and expects that
its fully-diluted FFO per share for 2010 will be between $0.46 and $0.51,
and that its fully-diluted net loss per share for the period will be
between $(0.17) and $(0.12). The Company's estimate is based on the
following key assumptions:
-- General and administrative expenses of approximately $24.6 million to
$25.6 million
-- For 2010, the same-store pool consists of 364 assets totaling 23.6
million square feet
-- Same-store revenue growth of 0% to -1.0% over 2009
-- Same-store expense growth of 1.0% to 2.0% over 2009
-- Same-store net operating income growth of -1.0% to -3.0% over 2009
2010 Full Year Guidance Range or Value
-------------------------
Earnings (loss) per diluted share allocated to
common shareholders $ (0.17) to $ (0.12)
Plus: real estate depreciation and amortization 0.63 0.63
------- -------
FFO per diluted share $ 0.46 to $ 0.51
======= =======
The Company estimates that its fully-diluted FFO per share for the quarter
ending September 30, 2010 will be between $0.12 and $0.13, and that its
fully-diluted net loss per share for the period will be between $(0.04) and
$(0.03).
3rd Quarter 2010 Guidance Range or Value
-------------------------
Earnings (loss) per diluted share allocated to
common shareholders $ (0.04) to $ (0.03)
Plus: real estate depreciation and amortization 0.16 0.16
------- -------
FFO per diluted share $ 0.12 to $ 0.13
======= =======
Conference Call
Management will host a conference call at 11:00 a.m. ET on Friday, August
6, 2010, to discuss financial results for the three and six months ended
June 30, 2010.
A live webcast of the conference call will be available online from the
investor relations page of the Company's corporate website at
www.u-store-it.com. The dial-in numbers are 1-877-317-6789 for domestic
callers and +1 412-317-6789 for international callers. After the live
webcast, the call will remain available on U-Store-It's website for thirty
days. In addition, a telephonic replay of the call will be available until
September 6, 2010. The replay dial-in number is 1-877-344-7529 for domestic
callers and +1 412-317-0088 for international callers. The reservation
number for both is 442326.
Supplemental operating and financial data as of June 30, 2010 is available
on our corporate website under Investor Relations - Financial Information -
Financial Reports.
About U-Store-It Trust
U-Store-It Trust is a self-administered and self-managed real estate
investment trust. The Company's self-storage facilities are designed to
offer affordable, easily accessible and secure storage space for
residential and commercial customers. According to the Self-Storage
Almanac, U-Store-It Trust is one of the top four owners and operators of
self-storage facilities in the United States.
Non-GAAP Performance Measurements
FFO is a widely used performance measure for real estate companies and is
provided here as a supplemental measure of operating performance. The
Company calculates FFO in accordance with the best practices described in
the April 2002 National Policy Bulletin of the National Association of Real
Estate Investment Trusts (the "White Paper"). The White Paper defines FFO
as net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
Management uses FFO as a key performance indicator in evaluating the
operations of the Company's facilities. Given the nature of its business as
a real estate owner and operator, the Company considers FFO a key measure
of its operating performance that is not specifically defined by accounting
principles generally accepted in the United States. The Company believes
that FFO is useful to management and investors as a starting point in
measuring its operational performance because it excludes various items
included in net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of property and
depreciation, which can make periodic and peer analyses of operating
performance more difficult. FFO should not be considered as an alternative
to net income (determined in accordance with GAAP) as an indicator of the
Company's financial performance, is not an alternative to cash flow from
operating activities (determined in accordance with GAAP) as a measure of
the Company's liquidity, and is not indicative of funds available to fund
the Company's cash needs, including its ability to make distributions.
We define net operating income, which we refer to as "NOI," as total
continuing revenues less continuing property operating expenses. NOI also
can be calculated by adding back to net income (loss): interest expense on
loans, loan procurement amortization expense, acquisition related costs,
amounts attributable to noncontrolling interests, other expense,
depreciation and amortization expense, general and administrative expense,
and deducting from net income: income from discontinued operations, gains
on disposition of discontinued operations, other income, and interest
income. NOI is not a measure of performance calculated in accordance with
GAAP.
Management uses NOI as a measure of operating performance at each of our
facilities, and for all of our facilities in the aggregate. NOI should not
be considered as a substitute for operating income, net income, cash flows
provided by operating, investing and financing activities, or other income
statement or cash flow statement data prepared in accordance with GAAP.
Forward-Looking Statements
This presentation, together with other statements and information publicly
disseminated by U-Store-It Trust ("we," "us," "our" or the "Company"),
contains certain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are
based on assumptions and expectations that may not be realized and are
inherently subject to risks, uncertainties and other factors, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Although we believe the expectations reflected in these
forward-looking statements are based on reasonable assumptions, future
events and actual results, performance, transactions or achievements,
financial and otherwise, may differ materially from the results,
performance, transactions or achievements expressed or implied by the
forward-looking statements. Risks, uncertainties and other factors that
might cause such differences, some of which could be material, include, but
are not limited to:
-- national and local economic, business, real estate and other market
conditions;
-- the competitive environment in which we operate;
-- the execution of our business plan;
-- financing risks, including the risk of over-leverage and the
corresponding risk of default on our mortgage and other debt and
potential inability to refinance existing indebtedness;
-- increases in interest rates and operating costs;
-- counterparty non-performance related to the use of derivative financial
instruments;
-- our ability to maintain our status as a real estate investment trust
("REIT") for federal income tax purposes;
-- acquisition and development risks;
-- changes in real estate and zoning laws or regulations;
-- risks related to natural disasters;
-- potential environmental and other liabilities;
-- other factors affecting the real estate industry generally or the
self-storage industry in particular; and
-- other risks identified in our Annual Report on Form 10-K and, from time
to time, in other reports we file with the Securities and Exchange
Commission (the "SEC") or in other documents that we publicly
disseminate.
We undertake no obligation to publicly update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise except as may be required in securities laws.
U-STORE-IT TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30, December 31,
2010 2009
----------- -----------
ASSETS
Storage facilities $ 1,739,617 $ 1,774,542
Less: Accumulated depreciation (336,392) (344,009)
----------- -----------
Storage facilities, net 1,403,225 1,430,533
Cash and cash equivalents 31,877 102,768
Restricted cash 13,961 16,381
Loan procurement costs, net of amortization 16,458 18,366
Notes receivable 256 20,112
Other assets, net 19,257 10,710
----------- -----------
Total assets $ 1,485,034 $ 1,598,870
=========== ===========
LIABILITIES AND EQUITY
Secured term loan $ 200,000 $ 200,000
Mortgage loans and notes payable 465,854 569,026
Accounts payable, accrued expenses and other
liabilities 35,400 33,767
Distributions payable 2,435 2,448
Deferred revenue 8,932 8,449
Security deposits 428 456
----------- -----------
Total liabilities 713,049 814,146
----------- -----------
Noncontrolling interests in the Operating
Partnership 44,731 45,394
----------- -----------
Commitments and contingencies
Equity
Common shares $.01 par value, 200,000,000 shares
authorized, 92,958,089 and 92,654,979 shares issued
and outstanding at June 30, 2010 and December 31,
2009, respectively 930 927
Additional paid in capital 977,211 974,926
Accumulated other comprehensive loss (1,104) (874)
Accumulated deficit (292,350) (279,670)
----------- -----------
Total U-Store-It Trust shareholders' equity 684,687 695,309
----------- -----------
Noncontrolling interest in subsidiaries 42,567 44,021
----------- -----------
Total equity 727,254 739,330
----------- -----------
Total liabilities and equity $ 1,485,034 $ 1,598,870
=========== ===========
U-STORE-IT TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
REVENUES
Rental income $ 49,465 $ 49,807 $ 98,461 $ 101,052
Other property related income 4,702 4,480 8,780 8,170
Property management fee income 590 - 634 -
--------- --------- --------- ---------
Total revenues 54,757 54,287 107,875 109,222
--------- --------- --------- ---------
OPERATING EXPENSES
Property operating expenses 24,421 24,920 47,390 48,568
Depreciation and amortization 16,363 17,756 32,741 35,583
General and administrative 6,844 5,628 12,711 11,102
--------- --------- --------- ---------
Total operating expenses 47,628 48,304 92,842 95,253
--------- --------- --------- ---------
OPERATING INCOME 7,129 5,983 15,033 13,969
--------- --------- --------- ---------
OTHER INCOME (EXPENSE)
Interest:
Interest expense on loans (9,625) (11,473) (19,676) (22,826)
Loan procurement amortization
expense (1,620) (545) (3,159) (1,028)
Interest income 62 55 597 100
Acquisition related costs (300) - (300) -
Other (35) (1) (76) (13)
--------- --------- --------- ---------
Total other expense (11,518) (11,964) (22,614) (23,767)
--------- --------- --------- ---------
LOSS FROM CONTINUING OPERATIONS (4,389) (5,981) (7,581) (9,798)
DISCONTINUED OPERATIONS
Income from discontinued
operations - 775 - 1,804
Net gain on disposition of
discontinued operations - 2,120 - 2,622
--------- --------- --------- ---------
Total discontinued
operations - 2,895 - 4,426
--------- --------- --------- ---------
NET LOSS (4,389) (3,086) (7,581) (5,372)
NET LOSS (INCOME) ATTRIBUTABLE
TO NONCONTROLLING INTERESTS
Noncontrolling interests in
the Operating Partnership 233 242 411 419
Noncontrolling interest in
subsidiaries (365) - (826) -
--------- --------- --------- ---------
NET LOSS ATTRIBUTABLE TO THE
COMPANY $ (4,521) $ (2,844) $ (7,996) $ (4,953)
========= ========= ========= =========
Basic and diluted loss per
share from continuing
operations attributable
to common shareholders $ (0.05) $ (0.09) $ (0.09) $ (0.16)
Basic and diluted earnings per
share from discontinued
operations attributable to
common shareholders $ - $ 0.04 $ - $ 0.07
--------- --------- --------- ---------
Basic and diluted loss per
share attributable to common
shareholders $ (0.05) $ (0.05) $ (0.09) $ (0.09)
========= ========= ========= =========
Weighted-average basic and
diluted shares outstanding 92,925 58,165 92,880 57,928
AMOUNTS ATTRIBUTABLE TO THE
COMPANY'S COMMON SHAREHOLDERS:
Loss from continuing operations $ (4,521) $ (5,507) $ (7,996) $ (9,020)
Total discontinued operations - 2,663 - 4,067
--------- --------- --------- ---------
Net loss $ (4,521) $ (2,844) $ (7,996) $ (4,953)
--------- --------- --------- ---------
Same-store facility results (364 facilities)
(in thousands, except percentage and per square foot data)
Three months ended
--------------------
June 30, June 30, Percent
2010 2009 Change
--------- --------- ---------
REVENUES
Net rental income $ 49,269 $ 49,672 -0.8%
Other property related income 4,467 4,393 1.7%
--------- --------- ---------
Total revenues 53,736 54,065 -0.6%
--------- --------- ---------
OPERATING EXPENSES
Property taxes 6,810 7,447 -8.6%
Personnel expense 5,762 5,880 -2.0%
Advertising 2,748 2,792 -1.6%
Repair and maintenance 668 789 -15.3%
Utilities 2,038 2,314 -11.9%
Property insurance 774 669 15.7%
Other expenses 3,038 2,943 3.2%
--------- --------- ---------
Total operating expenses 21,838 22,834 -4.4%
--------- --------- ---------
Net operating income (1) $ 31,898 $ 31,231 2.1%
========= ========= =========
Gross margin 59.4% 57.8%
Period Average Occupancy (2) 76.5% 75.4%
Period End Occupancy (3) 77.6% 76.7%
Total rentable square feet 23,562 23,562
Realized annual rent
per occupied square foot (4) $ 10.93 $ 11.18 -2.3%
Scheduled annual rent per
square foot (5) $ 11.67 $ 11.67 0.0%
Reconciliation of Same-Store Net Operating
Income to Operating Income
Same-store net operating income (1) $ 31,898 $ 31,231
Non same-store net operating income (1) 68 121
Indirect property overhead (6) (1,630) (1,985)
Depreciation and amortization (16,363) (17,756)
General and administrative expense (6,844) (5,628)
--------- ---------
Operating Income $ 7,129 $ 5,983
========= =========
(1) Net operating income (NOI) is a non-GAAP (generally accepted
accounting principles) financial measure that excludes the impact of
depreciation and general & administrative expense.
(2) Square feet occupancy represents the weighted average occupancy for
the period.
(3) Represents occupancy at June 30 of the respective year.
(4) Realized annual rent per occupied square foot is computed by dividing
rental income by the weighted average occupied square feet for the
period.
(5) Scheduled annual rent per square foot represents annualized
contractual rents per available square foot for the period.
(6) Includes property management fee income earned in conjunction with
managed properties.
Same-store facility results (364 facilities)
(in thousands, except percentage and per square foot data)
Six months ended
--------------------
June 30, June 30, Percent
2010 2009 Change
--------- --------- ---------
REVENUES
Net rental income $ 97,987 $ 100,462 -2.5%
Other property related income 8,408 8,014 4.9%
--------- --------- ---------
Total revenues 106,395 108,476 -1.9%
--------- --------- ---------
OPERATING EXPENSES
Property taxes 13,950 14,576 -4.3%
Personnel expense 11,694 11,854 -1.3%
Advertising 3,491 3,947 -11.6%
Repair and maintenance 1,305 1,388 -6.0%
Utilities 4,512 4,906 -8.0%
Property insurance 1,541 1,290 19.5%
Other expenses 6,321 6,421 -1.6%
--------- --------- ---------
Total operating expenses 42,814 44,382 -3.5%
--------- --------- ---------
Net operating income (1) $ 63,581 $ 64,094 -0.8%
========= ========= =========
Gross margin 59.8% 59.1%
Period Average Occupancy (2) 75.8% 76.0%
Period End Occupancy (3) 77.6% 76.7%
Total rentable square feet 23,562 23,562
Realized annual rent
per occupied square foot (4) $ 10.97 $ 11.21 -2.2%
Scheduled annual rent per
square foot (5) $ 11.63 $ 11.98 -2.9%
Reconciliation of Same-Store Net Operating
Income to Operating Income
Same-store net operating income (1) $ 63,581 $ 64,094
Non same-store net operating income (1) 202 316
Indirect property overhead (6) (3,298) (3,756)
Depreciation and amortization (32,741) (35,583)
General and administrative expense (12,711) (11,102)
--------- ---------
Operating Income $ 15,033 $ 13,969
========= =========
(1) Net operating income (NOI) is a non-GAAP (generally accepted
accounting principles) financial measure that excludes the impact of
depreciation and general & administrative expense.
(2) Square feet occupancy represents the weighted average occupancy for
the period.
(3) Represents occupancy at June 30 of the respective year.
(4) Realized annual rent per occupied square foot is computed by dividing
rental income by the weighted average occupied square feet for the
period.
(5) Scheduled annual rent per square foot represents annualized
contractual rents per available square foot for the period.
(6) Includes property management fee income earned in conjunction with
managed properties.
Non-GAAP Measure - Computation of Funds From Operations
(in thousands, except per share data)
Three months ended
------------------------
June 30, June 30,
2010 2009
----------- -----------
Net loss $ (4,389) $ (3,086)
Add (deduct):
Real estate depreciation and amortization 15,950 18,399
Gains on sale of real estate - (2,120)
Noncontrolling interests in subsidiaries share
of FFO (934) -
----------- -----------
FFO $ 10,628 $ 13,193
=========== ===========
Loss per share attributable to common
shareholders - fully diluted $ (0.05) $ (0.05)
FFO per share and unit - fully diluted $ 0.11 $ 0.21
Weighted-average basic and diluted shares
outstanding 92,925 58,165
Weighted-average diluted shares and units
outstanding 98,802 63,260
Dividend per common share and unit $ 0.025 $ 0.025
Payout ratio of FFO (Dividend per share divided
by FFO per share) 23% 12%