-- General and administrative expenses of approximately $5.0 million -- Same-store average occupancy of 81.5%-82.5% -- Same-store revenue growth of 5.0%-6.0% over the second quarter of 2006 -- Same-store expense growth of 3.0%-6.0% over the second quarter of 2006 -- Same-store net operating income growth of 4.5%-7.0% over the second quarter of 2006 -- No acquisitions during the quarter and dispositions of $10 to $20 millionThe Company is revising its previous 2007 earnings guidance to reflect the actual results of the first quarter at the low end of our expected range, the slower than expected pace of acquisition activity, and the higher than expected bad debts. The Company expects 2007 FFO per share of $1.05 to $1.12 and EPS of $0.00 to $0.07. Chief Financial Officer Christopher Marr said, "We met our baseline expectations for the first quarter, and finished April with a strong rental performance. We remain optimistic heading into the heart of the rental season that we can continue to build upon this momentum. Our guidance reflects the magnitude of the challenges we have faced and the reality that the full effects of the turnaround may not be realized until later in the year." Conference Call Management will host a conference call at 11:00 a.m. EDT on Friday, May 4, 2007, to discuss financial results for the three months ended March 31, 2007. 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 (877) 407-8035 for domestic callers and (201) 689-8035 for international callers. The reservation number for both is 240811. 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 June 4, 2007. The replay dial-in number is (877) 660-6853 for domestic callers, (201) 612-7415 for international callers. The replay reservation number is 240811. Supplemental operating and financial data as of March 31, 2007 is available on our corporate website under the heading "Investor Relations and Corporate Information." 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 five 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: interest expense, loan procurement amortization expense, early extinguishment of debt, minority interest, loss on sale of storage facilities, depreciation and general and administrative, and deducting from net income: income from discontinued operations, gains on sale of self-storage facilities, 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 Certain statements in this release that are not historical fact may constitute forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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. Risk, 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 the Company operates; the execution of the Company's business plan; financing risks; increases in interest rates and operating costs; the Company's ability to maintain its status as a 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; material weaknesses in our internal financial reporting; and other factors affecting the real estate industry generally or the self-storage industry in particular. The Company refers you to the documents filed by the Company from time to time with the Securities and Exchange Commission, specifically the section titled "Business - Risk Factors" in the Company's Annual Report on Form 10-K, which discuss these and other risks and factors that could cause the Company's actual results to differ materially from any forward-looking statements.
U-STORE-IT TRUST AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except per share data) March 31, December 31, 2007 2006 ----------- ----------- ASSETS Storage facilities $ 1,794,139 $ 1,771,864 Accumulated depreciation (221,752) (205,049) ----------- ----------- 1,572,387 1,566,815 Cash and cash equivalents 5,649 19,716 Restricted cash 15,508 14,126 Loan procurement costs - net of amortization 7,132 7,575 Other assets 6,759 6,475 Due from related parties - 632 ----------- ----------- Total assets $ 1,607,435 $ 1,615,339 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Revolving credit facility $ 107,500 $ 90,500 Unsecured term loan 200,000 200,000 Mortgage loans and notes payable 586,804 588,930 Accounts payable and accrued expenses 21,113 22,590 Due to related parties - 336 Distributions payable 18,192 18,197 Deferred revenue 10,429 9,740 Security deposits 632 655 ----------- ----------- Total liabilities 944,670 930,948 Minority interests 55,009 56,898 Shareholders' equity Common shares $.01 par value, 200,000,000 shares authorized, 57,408,819 and 57,335,490 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively 574 573 Additional paid in capital 794,901 794,632 Accumulated deficit (187,719) (167,712) ----------- ----------- Total shareholders' equity 607,756 627,493 ----------- ----------- Total liabilities and shareholders' equity $ 1,607,435 $ 1,615,339 =========== =========== U-STORE-IT TRUST AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three Months Ended ----------------------- March 31, March 31, 2007 2006 (as restated) -------- ------------- REVENUE Rental income $ 51,250 $ 44,994 Other property related income 4,282 3,101 Other income - related party - 115 -------- ------------- Total revenues 55,532 48,210 OPERATING EXPENSES Property operating expenses 23,276 18,917 Property operating expenses - related party - 20 Depreciation 16,767 14,672 Asset write-off - - General and administrative 5,989 5,389 General and administrative - related party - 177 -------- ------------- Total operating expenses 46,032 39,175 Operating income 9,500 9,035 Other income (expense) Interest: Interest expense on loans (12,826) (10,000) Loan procurement amortization expense (445) (462) Write-off of loan procurement costs - (1,273) Interest income 115 884 Other (6) 42 -------- ------------- Total other expense (13,162) (10,809) Loss before minority interests (3,662) (1,774) Minority Interests 304 149 -------- ------------- Net loss $ (3,358) $ (1,625) ======== ============= PER SHARE DATA Basic and diluted loss per share $ (0.06) $ (0.03) Weighted-average basic shares outstanding 57,421 57,257 Weighted-average diluted shares outstanding 57,421 57,257 ======== ============= Distributions declared per common share and unit $ 0.29 $ 0.29 ======== ============= Same-Store Facility Results (336 facilities) (unaudited and in thousands, except per square foot data) Three months ended ------------------------ March 31, March 31, Percent 2007 2006 Change ----------- ----------- -------- REVENUES Gross revenues 47,829 45,922 (1) 4.2% Rent and fee write-offs (1,924) (1,000) (1) 92.4% ----------- ----------- 45,905 44,922 OPERATING EXPENSES Property taxes 5,592 5,462 (2) 2.4% Personnel expense 5,396 5,372 (2) 0.5% Advertising 1,235 1,127 9.6% Repair and maintenance 544 468 16.2% Utilities 1,897 1,973 -3.9% Property insurance 861 555 55.1% Other expenses 2,770 2,891 -4.2% ----------- ----------- -------- Total operating expenses 18,295 17,848 2.5% Net operating income (3) 27,610 27,074 2.0% Gross margin 60.1% 60.3% Period Average Occupancy (4) 79.6% 80.5% Period End Occupancy (5) 79.7% 80.6% Total Rentable square feet 20,434 20,434 Realized annual rent per occupied square foot (6) $ 10.92 $ 10.45 In place annual rent per square foot (7) $ 12.05 $ 11.58 Reconciliation of Same-Store Net Operating Income to Operating Income Same-store net operating income (3) $ 27,610 $ 27,074 Non same-store net operating income (3) 4,646 1,861 Real estate tax and workers compensation adjustment - 338 Depreciation (16,767) (14,672) General and administrative expense (5,989) (5,566) ----------- ----------- Operating Income $ 9,500 $ 9,035 (1) In 2006, the Company's prior property management system did not capture rent and fee writeoffs separate from rental income. As the information is unavailable to present a meaningful comparison of same-store results, managements best estimate of writeoffs during the 2006 period is $1,000. This adjustment to present revenues on a gross basis and net of writeoffs has no impact on 2006 net operating income, but management believes presents the most relevant comparison of our same-store results. The company began to capture specific amounts related to rent and fee writeoffs effective with its conversion to a new property management system at the beginning of the fourth quarter of 2006. Accordingly, management anticipates making a similar estimate of prior year writeoffs in its presentation of same-store results in the second and third quarter of 2007. (2) Adjusted for comparison purposes to reflect $192 thousand of additional property taxes and $146 thousand of additional workers compensation costs. These amounts, related to the first quarter of 2006 were expensed in the fourth quarter of 2006, as management reevaluated its method of estimating these expenses. Accordingly, management anticipates making a similar adjustment in its presentation of same-store results in the second and third quarter of 2007. (3) Net operating income (NOI) is a non-GAAP (generally accepted accounting principles) financial measure that excludes the impact of depreciation and general & administrative expense. Although depreciation and general & administrative expense are operating expenses, we believe that NOI is more useful in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. NOI is not a substitute for operating income as determined in accordance with GAAP in evaluating our operating results. (4) Square feet occupancy represents the weighted average occupancy for the period. (5) Represents occupancy at March 31 of the respective year. (6) Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period. (7) In place annual rent per square foot represents annualized contractual rents per available square foot for the period. Non-GAAP Financial Measures Computation of Funds From Operations (FFO) (unaudited and in thousands, except per share data) Three months ended ------------------------- March 31, March 31, 2007 2006 (as restated) --------- -------------- Net loss $ (3,358) $ (1,625) Add (deduct): Real estate depreciation 16,610 14,672 Minority interests (304) (149) --------- -------------- FFO (1) $ 12,948 $ 12,898 ========= ============== Loss per share - fully diluted $ (0.06) $ (0.03) FFO per share and unit - fully diluted $ 0.21 $ 0.21 Weighted-average diluted shares outstanding 57,421 57,257 Weighted-average diluted shares and units outstanding 62,854 62,444 Dividend per common share and unit $ 0.29 $ 0.29 Payout ratio of FFO (Dividend per share divided by FFO per share and unit) 141% 140% (1) Included as an expense in FFO is $1.0 million in the first quarter of 2007 of legal and other costs associated with the previously disclosed inquiry and $1.3 million in the first quarter of 2006 related to the write-off of unamortized loan costs associated with a loan which was prepaid during the quarter.
Contact Information: Contact: U-Store-It Trust Christopher P. Marr Chief Financial Officer (610) 293-5700