StorageVault Reports Fiscal 2023 Annual Results; Highlighting NOI and AFFO Growth; Provides 2024 Outlook; Increases Dividend
TORONTO, Feb. 22, 2024 (GLOBE NEWSWIRE) — STORAGEVAULT CANADA INC. (“StorageVault” or the “Corporation”) (SVI-TSX) reports the Corporation’s full year 2023 audited results. Iqbal Khan, Chief Financial Officer, commented:
“Our team continued to deliver solid growth in 2023, achieving same store NOI growth of 4.5% and AFFO per share growth of 7.6% – these results are after achieving a cumulative 32.7% same store NOI growth and AFFO growth of 74.2% over the past two years. For 2024, we expect to continue to achieve our long term same store NOI growth, to complete $70 to $100 million of acquisitions, to complete 50,000 square feet of expansion and renovations, and to continue to increase our cash flow through revenue management and cost control.”
2023 Full Year Audited Results
Revenue increased to $288.7 million in 2023 from $261.8 million in 2022 and net operating income (“NOI”), a non-IFRS measure, grew to $193.6 million in 2023 from $176.0 million in 2022. Cash flow from operations grew to $85.8 million in 2023 from $76.4 million in 2022 and when combined with our financing, acquisitions, expansions, and $21.6 million in share repurchase resulted in a cash balance of $13.9 million at the end of the year. The net loss of $1.7 million or $0.01 loss per common share for the year (net loss of $41.2 million or $0.11 loss per common share for 2022) is a result of the following non-cash and non-recurring items – $100.5 million in depreciation and amortization, $4.0 million realized gain on derivative financial instruments, $3.8 million in stock based compensation, $4.2 million interest accretion on convertible debentures, $1.5 million of unrealized loss on derivative financial instruments, a $15.5 million gain on real estate disposition from an expropriation and deferred tax recovery of $8.6 million.
Revenue and NOI growth from existing self storage, a non-IFRS measure, increased by 4.8% and 4.5%, over the prior year. Funds from operations (“FFO”), a non-IFRS measure, were $80.1 million in 2023 compared to $70.6 million for 2022, a 13.5% increase year over year. Adjusted funds from operations (“AFFO”), a non-IFRS measure, were $86.0 million for 2023 compared to $80.2 million for 2022, a 7.3% increase year over year. On a per share basis, FFO and AFFO, non-IFRS ratios, increased by 13.8% and 7.6%, respectively.
Annualizing results from our 2023 acquisitions would have resulted in revenues of $294.3 million, NOI of $197.6 million, FFO of $83.8 million and AFFO of $89.7 million. See definition of “Annualized Information” below.
For further information on non-IFRS measures and for a reconciliation of the above NOI, FFO, AFFO and Existing Self Storage amounts to the most directly comparable IFRS measure, please see “Non-IFRS Financial Measures” below and the Corporation’s Management’s Discussion & Analysis for the fiscal year ended December 31, 2023 filed on SEDAR+ at www.sedarplus.ca.
2023 Fourth Quarter Results
Revenue for the fourth quarter of 2023 increased to $74.3 million compared to $69.1 million in Q4 2022 and net operating income (“NOI”), a non-IFRS measure, grew to $49.9 million from $46.0 million for the comparative period. Our cash flow from operations increased year over year and when combined with our financing, acquisitions and expansions resulted in a cash balance of $13.9 million at the end of the quarter. The Q4 2023 net loss of $27.8 million (net loss of $23.3 million for Q4 2022) is impacted by the following non-cash and non-recurring items – $25.3 million of depreciation and amortization, $18.5 million of unrealized loss on derivative financial instruments, $2.9 million in stock based compensation, $4.2 million interest accretion on convertible debentures and deferred tax recovery of $2.3 million.
Revenue and NOI from Existing Self Storage stores increased by 5.1% and 5.1%, compared to the same period last year. Funds from operations (“FFO”), a non-IFRS measure, were $20.9 million for Q4 2023 compared to $17.6 million in Q4 2022, an 18.7% increase year over year. Adjusted funds from operations (“AFFO”), a non-IFRS measure, were $22.8 million for Q4 2023 compared to $19.2 million in Q4 2022, an 18.6% increase. On a per basic common share basis, FFO and AFFO increased by 19.7% and 19.6%, respectively.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see “Non-IFRS Financial Measures” and the reconciliation tables below, and the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2023 filed on SEDAR+ at www.sedarplus.ca.
Increased Dividend
StorageVault is increasing its quarterly dividend by 0.5% beginning Q1 2024 to $0.002888 per common share.
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 records management businesses.
Further Information
For comprehensive disclosure of StorageVault’s performance for the year ended December 31, 2023 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, 2023 filed filed on SEDAR+ at www.sedarplus.ca.
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:
- 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, realized gains or losses on real estate, realized and unrealized gains or losses on interest rate swaps, interest accretion on convertible debentures, realized and unrealized gains or losses on derivative financial instruments, stock based compensation expenses and deferred income taxes; and after adjustments for equity accounted entities and non-controlling interests. FFO should not be viewed as an alternative to cash from operating activities, net income, or other measures calculated in accordance with IFRS. 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 – means stabilized stores that StorageVault has owned or leased at least 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.
Non-IFRS Financial Measures Reconciliation
The following table reconciles Net Income (Loss) and Net Operating Income:
| (unaudited) | (audited) | |||||||||||||||||||||||
| Three Months Ended December 31 | Fiscal | |||||||||||||||||||||||
| Change | Change | |||||||||||||||||||||||
| 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||
| Storage revenue and related services | $ | 73,750,304 | $ | 68,605,992 | $ | 5,144,312 | 7.5 | % | $ | 286,687,556 | $ | 259,933,061 | $ | 26,754,495 | 10.3 | % | ||||||||
| Management fees | 518,609 | 483,861 | 34,748 | 7.2 | % | 2,037,056 | 1,895,228 | 141,828 | 7.5 | % | ||||||||||||||
| 74,268,913 | 69,089,853 | 5,179,060 | 7.5 | % | 288,724,612 | 261,828,289 | 26,896,323 | 10.3 | % | |||||||||||||||
| Operating costs | 24,336,840 | 23,068,991 | 1,267,849 | 5.5 | % | 95,131,868 | 85,794,347 | 9,337,521 | 10.9 | % | ||||||||||||||
| Net operating income 1 | 49,932,073 | 46,020,862 | 3,911,211 | 8.5 | % | 193,592,744 | 176,033,942 | 17,558,802 | 10.0 | % | ||||||||||||||
| Less: | ||||||||||||||||||||||||
| Acquisition and integration costs | 1,959,784 | 1,666,565 | 293,219 | 17.6 | % | 5,904,217 | 9,587,840 | (3,683,623 | ) | -38.4 | % | |||||||||||||
| Selling, general and administrative | 6,300,966 | 5,461,630 | 839,336 | 15.4 | % | 24,290,628 | 21,048,950 | 3,241,678 | 15.4 | % | ||||||||||||||
| Interest | 20,809,179 | 21,321,051 | (511,872 | ) | -2.4 | % | 83,297,441 | 74,801,847 | 8,495,594 | 11.4 | % | |||||||||||||
| Stock based compensation | 2,944,323 | 12,587,262 | (9,642,939 | ) | -76.6 | % | 3,795,626 | 13,631,028 | (9,835,402 | ) | -72.2 | % | ||||||||||||
| Realized (gain) loss on real estate | 87,689 | – | 87,689 | – | (15,528,115 | ) | – | (15,528,115 | ) | – | ||||||||||||||
| Realized (gain) loss on derivative financial instruments | (23,454 | ) | – | (23,454 | ) | – | (3,994,356 | ) | – | (3,994,356 | ) | – | ||||||||||||
| Unrealized (gain) loss on derivative financial instruments | 18,458,800 | (422,566 | ) | 18,881,366 | -4468.3 | % | 1,450,089 | 3,664,312 | (2,214,223 | ) | -60.4 | % | ||||||||||||
| Interest accretion on convertible debentures | 4,195,644 | – | 4,195,644 | – | 4,195,644 | – | 4,195,644 | – | ||||||||||||||||
| Depreciation and amortization | 25,278,530 | 34,124,962 | (8,846,432 | ) | -25.9 | % | 100,518,182 | 104,126,661 | (3,608,479 | ) | -3.5 | % | ||||||||||||
| 80,011,461 | 74,738,904 | 5,272,557 | 7.1 | % | 203,929,356 | 226,860,638 | (22,931,282 | ) | -10.1 | % | ||||||||||||||
| Net income (loss) before taxes | (30,079,388 | ) | (28,718,042 | ) | (1,361,346 | ) | -4.7 | % | (10,336,612 | ) | (50,826,696 | ) | 40,490,084 | 79.7 | % | |||||||||
| Deferred tax (expense) recovery | 2,292,414 | 5,452,549 | (3,160,135 | ) | -58.0 | % | 8,636,454 | 9,584,739 | (948,285 | ) | -9.9 | % | ||||||||||||
| Net income (loss) | $ | (27,786,974 | ) | $ | (23,265,493 | ) | $ | (4,521,481 | ) | -19.4 | % | $ | (1,700,158 | ) | $ | (41,241,957 | ) | $ | 39,541,799 | 95.9 | % | |||
| 1 | Non-IFRS Measure. | |||||||||||||||||||||||
The following table reconciles Net Income (Loss), and Funds from Operations and Adjusted Funds from Operations:
| (unaudited) | (audited) | |||||||||||||||||||||||
| Three Months Ended December 31 | Fiscal | |||||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||
| Net income (loss) | $ | (27,786,974 | ) | $ | (23,265,493 | ) | $ | (4,521,481 | ) | -19.4 | % | $ | (1,700,158 | ) | $ | (41,241,957 | ) | $ | 39,541,799 | 95.9 | % | |||
| Adjustments: | ||||||||||||||||||||||||
| Stock based compensation | 2,944,323 | 12,587,262 | (9,642,939 | ) | -76.6 | % | 3,795,626 | 13,631,028 | (9,835,402 | ) | -72.2 | % | ||||||||||||
| Interest accretion on convertible debentures | 4,195,644 | – | 4,195,644 | – | 4,195,644 | – | 4,195,644 | – | ||||||||||||||||
| Realized (gain) loss on real estate | 87,689 | – | 87,689 | – | (15,528,115 | ) | – | (15,528,115 | ) | – | ||||||||||||||
| Realized (gain) loss on derivative financial instruments | (23,454 | ) | – | (23,454 | ) | – | (3,994,356 | ) | – | (3,994,356 | ) | – | ||||||||||||
| Unrealized (gain) loss on derivative financial instruments | 18,458,800 | (422,566 | ) | 18,881,366 | -4468.3 | % | 1,450,089 | 3,664,312 | (2,214,223 | ) | -60.4 | % | ||||||||||||
| Deferred tax (expense) recovery | (2,292,414 | ) | (5,452,549 | ) | 3,160,135 | -58.0 | % | (8,636,454 | ) | (9,584,739 | ) | 948,285 | -9.9 | % | ||||||||||
| Depreciation and amortization | 25,278,530 | 34,124,962 | (8,846,432 | ) | -25.9 | % | 100,518,182 | 104,126,661 | (3,608,479 | ) | -3.5 | % | ||||||||||||
| 48,649,118 | 40,837,109 | 7,812,009 | 19.1 | % | 81,800,616 | 111,837,262 | (30,036,646 | ) | -26.9 | % | ||||||||||||||
| FFO 1 | $ | 20,862,144 | $ | 17,571,616 | $ | 3,290,528 | 18.7 | % | $ | 80,100,458 | $ | 70,595,305 | $ | 9,505,153 | 13.5 | % | ||||||||
| Adjustments: | ||||||||||||||||||||||||
| Acquisition and integration costs | 1,959,784 | 1,666,565 | 293,219 | 17.6 | % | 5,904,217 | 9,587,840 | (3,683,623 | ) | -38.4 | % | |||||||||||||
| AFFO 1 | $ | 22,821,928 | $ | 19,238,181 | $ | 3,583,747 | 18.6 | % | $ | 86,004,675 | $ | 80,183,145 | $ | 5,821,530 | 7.3 | % | ||||||||
| 1 Non-IFRS Measure. | ||||||||||||||||||||||||
The following table reconciles Existing Self Storage Revenue, Operating Costs and Net Operating Income:
| (unaudited) | (audited) | |||||||||||||||||||||||
| Three Months Ended December 31 | Fiscal | |||||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Existing Self Storage 1 | $ | 56,114,074 | $ | 53,412,184 | $ | 2,701,890 | 5.1 | % | $ | 220,710,547 | $ | 210,510,124 | $ | 10,200,423 | 4.8 | % | ||||||||
| New Self Storage 1 | 15,211,762 | 12,562,310 | 2,649,452 | 21.1 | % | 55,406,331 | 38,114,042 | 17,292,289 | 45.4 | % | ||||||||||||||
| Total Self Storage | 71,325,836 | 65,974,494 | 5,351,342 | 8.1 | % | 276,116,878 | 248,624,166 | 27,492,712 | 11.1 | % | ||||||||||||||
| Portable Storage | 2,424,468 | 2,631,498 | (207,030 | ) | -7.9 | % | 10,570,678 | 11,308,895 | (738,217 | ) | -6.5 | % | ||||||||||||
| Management Fees | 518,609 | 483,861 | 34,748 | 7.2 | % | 2,037,056 | 1,895,228 | 141,828 | 7.5 | % | ||||||||||||||
| Combined | 74,268,913 | 69,089,853 | 5,179,060 | 7.5 | % | 288,724,612 | 261,828,289 | 26,896,323 | 10.3 | % | ||||||||||||||
| Operating Costs | ||||||||||||||||||||||||
| Existing Self Storage | 16,876,711 | 16,063,929 | 812,782 | 5.1 | % | 66,062,969 | 62,523,396 | 3,539,573 | 5.7 | % | ||||||||||||||
| New Self Storage | 5,738,487 | 5,111,720 | 626,767 | 12.3 | % | 21,838,405 | 15,477,552 | 6,360,853 | 41.1 | % | ||||||||||||||
| Total Self Storage | 22,615,198 | 21,175,649 | 1,439,549 | 6.8 | % | 87,901,374 | 78,000,948 | 9,900,426 | 12.7 | % | ||||||||||||||
| Portable Storage | 1,721,642 | 1,893,341 | (171,699 | ) | -9.1 | % | 7,230,494 | 7,793,399 | (562,905 | ) | -7.2 | % | ||||||||||||
| Combined | 24,336,840 | 23,068,990 | 1,267,850 | 5.5 | % | 95,131,868 | 85,794,347 | 9,337,521 | 10.9 | % | ||||||||||||||
| Net Operating Income 1 | ||||||||||||||||||||||||
| Existing Self Storage | 39,237,363 | 37,348,255 | 1,889,108 | 5.1 | % | 154,647,578 | 147,986,728 | 6,660,850 | 4.5 | % | ||||||||||||||
| New Self Storage | 9,473,275 | 7,450,590 | 2,022,685 | 27.1 | % | 33,567,926 | 22,636,490 | 10,931,436 | 48.3 | % | ||||||||||||||
| Total Self Storage | 48,710,638 | 44,798,845 | 3,911,793 | 8.7 | % | 188,215,504 | 170,623,218 | 17,592,286 | 10.3 | % | ||||||||||||||
| Portable Storage | 702,826 | 738,157 | (35,331 | ) | -4.8 | % | 3,340,184 | 3,515,496 | (175,312 | ) | -5.0 | % | ||||||||||||
| Management Fees | 518,609 | 483,861 | 34,748 | 7.2 | % | 2,037,056 | 1,895,228 | 141,828 | 7.5 | % | ||||||||||||||
| Combined | $ | 49,932,073 | $ | 46,020,863 | $ | 3,911,210 | 8.5 | % | $ | 193,592,744 | $ | 176,033,942 | $ | 17,558,802 | 10.0 | % | ||||||||
| 1 Non -IFRS Measure. | ||||||||||||||||||||||||
About StorageVault Canada Inc.
StorageVault owns and operates 243 storage locations across Canada. StorageVault owns 212 of these locations plus over 5,000 portable storage units representing over 11.7 million rentable square feet on over 686 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
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information regarding: the Corporation’s expectations to achieve same store NOI growth, to complete $70 to $100 million of acquisitions, to complete 50,000 square feet of expansion and renovations, and to continue to increase its cash flow through revenue management and cost control; and the Corporation’s strategy, including having multiple stores in each of the top markets in Canada with complementary portable storage and records management services and a growth strategy focused on acquisitions, organic growth, expansion of existing stores, and expansion of portable storage and records management businesses. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects StorageVault’s current beliefs and is based on information currently available to StorageVault and on assumptions StorageVault believes are reasonable. These assumptions include, but are not limited to: the level of activity in the storage business and the economy generally; consumer interest in the Corporation’s services and products; competition and StorageVault’s competitive advantages; trends in the storage industry, including, increased growth and growth in the portable storage business; the availability of attractive and financially competitive asset acquisitions in the future; the revenue and costs from acquisitions and operations conducted in fiscal 2023 being extrapolated to the entire period for 2024 and being consistent with, and reproducible as, costs and revenue in future periods; and anticipated and unanticipated costs. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of StorageVault to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board of directors, third party or regulatory approvals; the actual results of StorageVault’s future operations; competition; changes in legislation, including environmental legislation, affecting StorageVault; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social distancing, mandatory vaccination policies, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible national or global recession; and the impact that the COVID-19 pandemic may have on StorageVault which may include: a short-term delay in payments from customers, an increase in accounts receivable and an increase of losses on accounts receivable; decreased demand for the services that StorageVault offers; and a deterioration of financial markets that could limit StorageVault’s ability to obtain external financing. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in StorageVault’s disclosure documents on the SEDAR+ website at www.sedarplus.ca. Although StorageVault has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of StorageVault as of the date of this news release and, accordingly, is subject to change after such date. However, StorageVault expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.
The long term same store NOI growth, the amount of potential future acquisitions, expansions and renovations by the Corporation in fiscal 2024 and cash flow growth for 2024 contained in this news release may be considered a financial outlook as defined by applicable securities legislation. Such information and any other financial outlooks have been approved by management of the Corporation as of the date hereof. Such financial outlooks are provided for the purpose of presenting information about management’s current expectations and goals relating to the future business of the Corporation. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
