Global Self Storage Reports Record Third Quarter 2022 Results
Global Self Storage reported robust Q3 2022 results, with total revenues rising by 13.0% to $3.1 million and operating income increasing 41.0% to $1.1 million. Net income reached $930,000, equating to $0.08 per diluted share. Funds from operations (FFO) surged 45.7% to $1.4 million, while adjusted FFO (AFFO) also increased by 42.0% to $1.4 million. Despite a dip in same-store occupancy to 89.6%, the company saw an increase in average tenant duration to 3.3 years. A dividend increase of 11.5% was declared, reinforcing the company's commitment to shareholder value.
- Total revenues increased 13.0% to $3.1 million.
- Operating income grew 41.0% to $1.1 million.
- Net income reached $930,000 or $0.08 per diluted share.
- FFO increased 45.7% to $1.4 million or $0.13 per diluted share.
- AFFO rose 42.0% to $1.4 million or $0.13 per diluted share.
- Same-store revenues increased 13.0% to a record $3.1 million.
- Dividend increased by 11.5%, declared at $0.0725 per share.
- Same-store occupancy decreased from 93.3% to 89.6%.
- Net income for the first nine months fell to $1.6 million or $0.15 per diluted share, down from $1.9 million or $0.19 per share in the same period last year.
Operational Excellence and Industry Strength Continued to Drive Record Revenues and Net Operating Income, and Strong FFO and AFFO Growth Rate
MILLBROOK, NY / ACCESSWIRE / November 10, 2022 / Global Self Storage, Inc. (NASDAQ:SELF), a real estate investment trust that owns, operates, manages, acquires, and redevelops self-storage properties, reported results for the third quarter ended September 30, 2022. All comparisons are to the same year-ago period unless otherwise noted.
Q3 2022 Highlights
- Total revenues increased
13.0% to$3.1 million . - Operating income increased
41.0% to$1.1 million . - Net income totaled
$930,000 or$0.08 per diluted share. - Funds from operations (FFO) increased
45.7% to$1.4 million or$0.13 per diluted share (see definition of this and other non-GAAP measures and their reconciliation to GAAP, below). - Adjusted FFO (AFFO), a non-GAAP term, increased
42.0% to$1.4 million or$0.13 per diluted share. - Same-store revenues increased
13.0% to a record$3.1 million . - Same-store net operating income (NOI),a non-GAAP term, increased
16.0% to a record$2.1 million . - Same-store occupancy at September 30, 2022 decreased to
89.6% from93.3% at September 30, 2021, as the company optimized rental revenue under its revenue rate management program. As of November 8, 2022, occupancy at the company's same-store properties was90.6% . - Same-store average tenant duration of stay at September 30, 2022 was approximately 3.3 years, up from approximately 3.0 years as of September 30, 2021.
- Increased its dividend by
11.5% and declared a dividend of$0.07 25 per common share. - Capital resources at September 30, 2022 totaled approximately
$24.1 million . This was comprised of$6.5 million in cash, cash equivalents and restricted cash,$2.6 million in marketable securities, and$15 million available under a credit facility.
First Nine Months 2022 Highlights
- Total revenues increased
14.7% to record$8.9 million . - Operating income increased
42.3% to$2.7 million . - Net income totaled
$1.6 million or$0.15 per diluted share. - FFO increased
46.4% to$3.4 million or$0.31 per diluted share (see definition of this and other non-GAAP measures and their reconciliation to GAAP, below). - AFFO, a non-GAAP term, increased
44.9% to$3.6 million or$0.33 per diluted share. - Same-store revenues increased
14.7% to a record$8.8 million . - Same-store NOI increased
18.8% to a record$5.8 million . - Same-store occupancy at September 30, 2022 decreased to
89.6% from93.3% at September 30, 2021, as the company optimized rental revenue under its revenue rate management program. As of November 8, 2022, occupancy at the company's same-store properties was90.6% . - Same-store average tenant duration of stay at September 30, 2022 was approximately 3.3 years, up from approximately 3.0 years as of September 30, 2021.
Dividend Increase
On August 2, 2022, the company increased its dividend by
Management Commentary
"In Q3, we achieved another record quarter of strong FFO and AFFO growth, and double-digit same-store revenue and NOI growth," commented Global Self Storage president and CEO, Mark C. Winmill.
"Our record top-line was driven by our operational excellence and revenue rate management program. We also effectively controlled expenses. Altogether, this performance helped drive strong cash flow and allowed us to increase our dividend for common stockholders by
"The objective of the company is to increase value over time for the benefit of our stockholders. Toward this end, we will continue to execute our strategic business plan, which includes funding acquisitions, either directly or through joint ventures, and expansion projects at our existing properties. Our strong operational performance and capital resources position us well to pursue these acquisition opportunities. Our board of directors regularly reviews our strategic business plan, covering topics and metrices like capital formation, debt versus equity ratios, dividend policy, use of capital and debt, FFO and AFFO performance, and optimal cash levels.
"We believe our focus on providing a pleasant, clean, safe, hassle-free rental experience that is driven by the best customer service in the industry will continue to draw high quality tenants and generate attractive returns for our stockholders."
Q3 2022 Financial Summary
Total revenues increased
Total operating expenses in the third quarter of 2022 increased
Operating income increased
Net income was
As of September 30, 2022, the company's capital resources totaled approximately
Cash and cash equivalents increased from
Q3 2022 Same-Store Results
As of September 30, 2022, the company owned 12 same-store properties and zero non-same-store properties, and managed one third-party owned property.
For the third quarter of 2022, same-store revenues increased
Same-store cost of operations in the third quarter increased
Same-store NOI increased
Same-store occupancy at September 30, 2022 decreased to
Same-store average duration of tenant stay at September 30, 2022 was 3.3 years, up from approximately 3.0 years at September 30, 2021.
For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.
Q3 2022 Operating Results
Net income in the third quarter of 2022 was
Property operations expense increased to
General and administrative expenses increased to
Business development costs increased to
Interest expense for the third quarter of 2022 decreased to
FFO in the third quarter of 2022 increased
AFFO in the third quarter of 2022 increased
First Nine Months 2022 Financial Summary
Total revenues increased
Total operating expenses in the first nine months of 2022 increased
Operating income increased
Net income was
First Nine Months 2022 Same-Store Results
For the first nine months of 2022, same-store revenues increased
Same-store cost of operations in the first nine months of 2022 increased
Same-store NOI increased
Same-store occupancy at September 30, 2022 decreased to
Same-store average duration of tenant stay at September 30, 2022 was 3.3 years, up from approximately 3.0 years as of September 30, 2021.
For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.
First Nine Months 2022 Operating Results
Net income in the first nine months of 2022 was
Property operations expense increased to
General and administrative expenses increased to
Business development costs increased to
Interest expense for the first nine months of 2022 decreased to
FFO in the first nine months of 2022 increased
AFFO in the first nine months of 2022 increased
Q3 and First Nine Months 2022 FFO and AFFO (Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income | $ | 929,864 | $ | 629,062 | $ | 1,617,271 | $ | 1,901,608 | ||||||||
Eliminate items excluded from FFO: | ||||||||||||||||
Unrealized loss (gain) on marketable equity securities | 59,512 | (81,992 | ) | 889,885 | (791,189 | ) | ||||||||||
Depreciation and amortization | 404,961 | 409,763 | 1,214,344 | 1,221,938 | ||||||||||||
Gain on PPP loan forgiveness | - | - | (307,210 | ) | - | |||||||||||
FFO attributable to common stockholders | 1,394,337 | 956,833 | 3,414,290 | 2,332,357 | ||||||||||||
Adjustments: | ||||||||||||||||
Compensation expense related to stock-based awards | 39,179 | 54,092 | 131,112 | 140,274 | ||||||||||||
Business development, capital raising, store acquisition, and third-party management marketing expenses | 4,598 | 1,797 | 46,708 | 6,635 | ||||||||||||
AFFO attributable to common stockholders | $ | 1,438,114 | $ | 1,012,722 | $ | 3,592,110 | $ | 2,479,266 | ||||||||
Earnings per share attributable to common stockholders - basic | $ | 0.08 | $ | 0.06 | $ | 0.15 | $ | 0.19 | ||||||||
Earnings per share attributable to common stockholders - diluted | $ | 0.08 | $ | 0.06 | $ | 0.15 | $ | 0.19 | ||||||||
FFO per share - diluted | $ | 0.13 | $ | 0.09 | $ | 0.31 | $ | 0.24 | ||||||||
AFFO per share - diluted | $ | 0.13 | $ | 0.10 | $ | 0.33 | $ | 0.25 | ||||||||
Weighted average shares outstanding - basic | 10,924,646 | 10,601,521 | 10,785,362 | 9,757,458 | ||||||||||||
Weighted average shares outstanding - diluted | 10,978,000 | 10,635,006 | 10,842,515 | 9,787,317 | ||||||||||||
Additional Information
More information about the company's third quarter 2022 results, including financial statements and related notes, is available on Form 10-Q as filed with the U.S. Securities and Exchange Commission and posted to the investor relations section of the company's website.
About Global Self Storage
Global Self Storage is a self-administered and self-managed REIT that owns, operates, manages, acquires, and redevelops self-storage properties. The company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. Through its wholly owned subsidiaries, the company owns and/or manages 13 self-storage properties in Connecticut, Illinois, Indiana, New York, Ohio, Pennsylvania, South Carolina, and Oklahoma.
For more information, go to ir.globalselfstorage.us or visit the company's customer site at www.globalselfstorage.us. You can also follow Global Self Storage on Twitter, LinkedIn and Facebook.
Non-GAAP Financial Measures
Funds from Operations ("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.
Adjusted FFO ("AFFO") and AFFO per share are non-GAAP measures that represent FFO and FFO per share excluding the effects of business development, capital raising, and acquisition related costs and non-recurring items, which we believe are not indicative of the Company's operating results. AFFO and AFFO per share are not a substitute for net income or earnings per share. AFFO 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. 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 analyst 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. However, the Company believes that to further understand the performance of its stores, AFFO 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.
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.
NOI is not a substitute for net income, net operating cash flow, or other related GAAP financial measures, in evaluating our operating results.
Same-Store Self Storage Operations Definition
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 September 30, 2022, we owned 12 same-store properties and zero non same-store properties. 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, and NOI, 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.
Cautionary Note Regarding Forward Looking Statements
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, including the negative impacts from the continued spread of COVID-19 on the economy, the self storage industry, the broader financial markets, the company's financial condition, results of operations and cash flows and the ability of the company's tenants to pay rent. 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.
Company Contact:
Thomas O'Malley, Chief Financial Officer
Global Self Storage
1 (212) 785-0900, ext. 267
tomalley@globalselfstorage.us
Investor Relations Contact:
Ron Both
CMA Investor Relations
Tel (949) 432-7566
Email contact
Media Contact:
Tim Randall
CMA Media Relations
Tel (949) 432-7572
Email Contact
GLOBAL SELF STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, 2022 | December 31, 2021 | |||||||
Assets | ||||||||
Real estate assets, net | $ | 57,257,626 | $ | 58,390,066 | ||||
Cash and cash equivalents | 6,341,502 | 2,899,701 | ||||||
Restricted cash | 132,104 | 163,998 | ||||||
Investments in securities | 2,593,297 | 3,483,182 | ||||||
Accounts receivable | 162,701 | 120,641 | ||||||
Prepaid expenses and other assets | 546,420 | 534,120 | ||||||
Line of credit issuance costs, net | 177,803 | 254,004 | ||||||
Interest rate cap | 111,801 | 9,408 | ||||||
Goodwill | 694,121 | 694,121 | ||||||
Total assets | $ | 68,017,375 | $ | 66,549,241 | ||||
Liabilities and equity | ||||||||
Note payable, net | $ | 17,546,978 | $ | 17,916,513 | ||||
Accounts payable and accrued expenses | 1,835,004 | 1,514,631 | ||||||
Total liabilities | 19,381,982 | 19,431,144 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, | - | - | ||||||
Common stock, | 111,008 | 107,086 | ||||||
Additional paid in capital | 48,960,578 | 46,851,360 | ||||||
Retained earnings (accumulated deficit) | (436,193 | ) | 159,651 | |||||
Total stockholders' equity | 48,635,393 | 47,118,097 | ||||||
Total liabilities and stockholders' equity | $ | 68,017,375 | $ | 66,549,241 | ||||
GLOBAL SELF STORAGE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE INCOME
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues | ||||||||||||||||
Rental income | $ | 2,970,875 | $ | 2,608,664 | $ | 8,542,221 | $ | 7,402,570 | ||||||||
Other property related income | 93,630 | 102,428 | 281,702 | 288,249 | ||||||||||||
Management fees and other income | 21,907 | 19,426 | 62,218 | 56,408 | ||||||||||||
Total revenues | 3,086,412 | 2,730,518 | 8,886,141 | 7,747,227 | ||||||||||||
Expenses | ||||||||||||||||
Property operations | 1,010,495 | 940,372 | 3,053,481 | 2,831,693 | ||||||||||||
General and administrative | 560,675 | 594,547 | 1,892,382 | 1,804,371 | ||||||||||||
Depreciation and amortization | 404,961 | 409,763 | 1,214,344 | 1,221,938 | ||||||||||||
Business development | 4,598 | 1,797 | 46,708 | 6,635 | ||||||||||||
Total expenses | 1,980,729 | 1,946,479 | 6,206,915 | 5,864,637 | ||||||||||||
Operating income | 1,105,683 | 784,039 | 2,679,226 | 1,882,590 | ||||||||||||
Other income (expense) | ||||||||||||||||
Dividend and interest income | 46,846 | 19,533 | 92,894 | 56,396 | ||||||||||||
Unrealized (loss) gain on marketable equity securities | (59,512 | ) | 81,992 | (889,885 | ) | 791,189 | ||||||||||
Interest expense | (163,153 | ) | (256,502 | ) | (572,174 | ) | (828,567 | ) | ||||||||
Gain on Paycheck Protection Program (PPP) loan forgiveness | - | - | 307,210 | - | ||||||||||||
Total other income (expense), net | (175,819 | ) | (154,977 | ) | (1,061,955 | ) | 19,018 | |||||||||
Net income and comprehensive income | $ | 929,864 | $ | 629,062 | $ | 1,617,271 | $ | 1,901,608 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.06 | $ | 0.15 | $ | 0.19 | ||||||||
Diluted | $ | 0.08 | $ | 0.06 | $ | 0.15 | $ | 0.19 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 10,924,646 | 10,601,521 | 10,785,362 | 9,757,458 | ||||||||||||
Diluted | 10,978,000 | 10,635,006 | 10,842,515 | 9,787,317 | ||||||||||||
Reconciliation of GAAP Net Income to Same-Store Net Operating Income
The following table presents a reconciliation of same-store net operating income to net income as presented on the company's consolidated statements of operations for the periods indicated (unaudited):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income | $ | 929,864 | $ | 629,062 | $ | 1,617,271 | $ | 1,901,608 | ||||||||
Adjustments: | ||||||||||||||||
Management fees and other income | (21,907 | ) | (19,426 | ) | (62,218 | ) | (56,408 | ) | ||||||||
General and administrative | 560,675 | 594,547 | 1,892,382 | 1,804,371 | ||||||||||||
Depreciation and amortization | 404,961 | 409,763 | 1,214,344 | 1,221,938 | ||||||||||||
Business development | 4,598 | 1,797 | 46,708 | 6,635 | ||||||||||||
Dividend and interest | (46,846 | ) | (19,533 | ) | (92,894 | ) | (56,396 | ) | ||||||||
Unrealized loss (gain) on marketable equity securities | 59,512 | (81,992 | ) | 889,885 | (791,189 | ) | ||||||||||
Interest expense | 163,153 | 256,502 | 572,174 | 828,567 | ||||||||||||
Gain on Paycheck Protection Program (PPP) loan forgiveness | - | - | (307,210 | ) | - | |||||||||||
Total same-store net operating income | $ | 2,054,010 | $ | 1,770,720 | $ | 5,770,442 | $ | 4,859,126 | ||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Same-store revenues | $ | 3,064,505 | $ | 2,711,092 | $ | 8,823,923 | $ | 7,690,819 | ||||||||
Same-store cost of operations | 1,010,495 | 940,372 | 3,053,481 | 2,831,693 | ||||||||||||
Total same-store net operating income | $ | 2,054,010 | $ | 1,770,720 | $ | 5,770,442 | $ | 4,859,126 | ||||||||
SOURCE: Global Self Storage
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