SVI Storagevault Canada Inc

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 ResultsRevenue 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 ResultsRevenue 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 PandemicSince 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 StrategyStorageVault 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 InformationFor 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 MeasuresManagement 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:

1. 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.
2. 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.
3. 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.
4. 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 InformationThe 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: 1-877-622-0205ir@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. Generally, forward-looking information may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this news release contains forward-looking information regarding: the Corporation’s strategic objectives, goals, growth strategy and focus including growing free cash flow through improved operations, accretive acquisitions, internal expansion, integrating and innovating operations, occupancy growth and revenue management; the size of potential future acquisitions the Corporation may make in 2022, including the expectation to acquire in excess $100 million of assets; statements regarding the expansion and renovation of existing stores, occupancy growth and revenue management; statements regarding StorageVault’s expected future performance, including an increase in cash flow through integrating and innovating operations, occupancy growth and revenue management; StorageVault’s fundamentals positioning StorageVault well in an inflationary environment; StorageVault’s response to the COVID-19 pandemic, the potential anticipated impact of COVID-19 ‎on StorageVault’s expected future performance, the impact of COVID-19 on its customers’ ability ‎to pay for services provided by StorageVault and StorageVault’s beliefs regarding its ability to ‎navigate the pandemic; positive trends StorageVault is experiencing including stronger demand, resulting in increased leads, ‎rentals, occupancy, rental rates, strong same store revenue and NOI growth; statements regarding StorageVault’s ability to attract new clients‎; and statements regarding StorageVault’s liquidity position and its ability to meet liquidity requirements ‎and to take advantage of acquisition opportunities as a result of its liquidity position. ‎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 2021 being extrapolated to the entire period for 2021 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.sedar.com. 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 amount of potential future acquisitions by the Corporation in fiscal 2022 and cash flow growth for 2022 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.