Global Self Storage : Reports Fourth Quarter and Full Year 2021 Results

March 31, 2022

Global Self Storage Reports Fourth Quarter and Full Year 2021 Results

Strong Pricing Power, Operational Excellence, and Industry Strength Drove Record-high Revenues and Peer-leading FFO and AFFO Growth in 2021

MILLBROOK, NY / ACCESSWIRE / March 31, 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 fourth quarter and full year ended December 31, 2021.

Q4 2021 Highlights

Total revenues increased 16.2% to a record $2.8 million.

Net income increased to $1.4 million or $0.13 per fully diluted share.Operating income increased 74% to $802,000.

Funds from operations (FFO) increased 56.0% to a record $1.0 million or $0.10 per diluted share.

Adjusted FFO (AFFO) increased 63.0% to a record $1.1 million or $0.10 per diluted share (see definition of FFO and AFFO, both non-GAAP terms, and their reconciliation to GAAP, below).

Same-store revenues increased 15.0% to a record $2.2 million.

Same-store net operating income (NOI) increased 20.1% to a record $1.4 million, as described below (see definition of same-store NOI, a non-GAAP term, and its reconciliation to GAAP, below).

Same-store occupancy at December 31, 2021 decreased to 94.1% from 95.1% at

December 31, 2020, as the company maximized move-in rates and existing rates under its proprietary revenue rate management program.

Same-store average tenant duration of stay at December 31, 2021 was approximately 3.3 years, up from approximately 3.0 years as of December 31, 2020.

Maintained quarterly dividend of $0.065 per share.

Capital resources at December 31, 2021 totaled approximately $21.5 million.

Full Year 2021 Highlights

Total revenues increased 14.3% to a record $10.5 million.Total expenses decreased 1.9% to $7.8 million.Operating income increased 120% to $2.7 million.

Net income increased $3.0 million to a record $3.3 million or $0.33 per fully dilutedshare.

Funds from operations (FFO) increased 58.7% to a record $3.3 million or $0.33 per diluted share.

Adjusted FFO (AFFO) increased 59.7% to a record $3.6 million or $0.36 per diluted share.

Same-store revenues increased 11.2% to a record $8.3 million.

Same-store net operating income (NOI) increased 15.5% to a record $5.3 million, as described below.

Same-store occupancy at December 31, 2021 decreased to 94.1% from 95.1% at

December 31, 2020, as the company raised move-in rates and existing tenant rates under its proprietary revenue rate management program.

Same-store average tenant duration of stay at December 31, 2021 was approximately 3.3 years, up from approximately 3.0 years as of December 31, 2020.

Maintained quarterly dividend of $0.065 per share.

Management Commentary

"2021 was truly an incredible year for Global Self Storage with strong performance in key metrics, including record-high revenues and peer-leading FFO and AFFO growth," commented Global Self Storage president and CEO, Mark C. Winmill. "We also strengthened our capital resources, making us well-positioned for continued growth through our disciplined approach to acquisitions.

"This strong performance was primarily the result of our proprietary, highly-adaptive revenue rate management program, along with strong pricing power across our portfolio of self-storage properties. Our revenue rate management program enabled us to adapt quickly to changing market conditions and benefit from the increased demand for self-storage product during 2021.

"Last year, we also bolstered our balance sheet by extending and increasing our revolving credit facility from $10 million to $15 million, and raising aggregate gross proceeds of approximately $6.9 million in a public offering. This increased our total capital resources to approximately $21.5 million at year end, comprised of $3.1 million in cash and cash equivalents and restricted cash, $3.5 million in marketable securities, and $15 million available under our credit facility.

"These financial resources position us to pursue a variety of potential growth opportunities, such as existing property expansions, acquisitions or joint ventures.

"We see self-storage acquisition opportunities in our target markets that could benefit from our successful management techniques. We believe these proprietary techniques allow us to consider properties where other buyers might not be able to achieve the same level of performance. We believe this approach gives us a competitive edge in an increasingly active acquisition environment for self-storage properties.

"In 2022, self-storage industry fundamentals have remained strong and we currently expect our momentum to continue. In times of moderate to high inflation, public REITs have historically outperformed the S&P 500 in terms of higher returns and financial performance. In particular, the self-storage sector of real estate can provide a hedge against inflation because of its ability to quickly adapt pricing to market conditions through month-to-monthleases. We believe the elevated demand for self-storage will continue and contribute to strong pricing power in 2022. Altogether, we believe 2022 will be the best year yet for Global Self Storage."

Dividend

On December 1, 2021, the company declared a quarterly dividend of $0.065 per share, consistent with the quarterly dividend for the same period last year and the previous quarter.

Q4 Financial Summary

Total revenues increased 16.2% to $2.8 million in the fourth quarter of 2021, as compared to $2.4 million in the same period last year. This increase was due primarily to increased rental rates, and the results of the company's revenue rate management program of raising existing tenant rates.

Total operating expenses in the fourth quarter of 2021 increased 2.2% to $1.96 million, as compared to $1.92 million in the same period last year. The increase was primarily attributable to increased store operating expenses.

Operating income increased 74% to 802,000 in the fourth quarter of 2021, as compared to $460,000 in the same period last year.

Net income was $1.4 million or $0.13 per diluted share in the fourth quarter of 2021, as compared to $316,000 or $0.03 per diluted share in the same period last year.

As of December 31, 2021, the company's capital resources totaled approximately $21.5 million, comprised of $3.1 million in cash, cash equivalents and restricted cash, $3.5 million of marketable securities, and $15.0 million available (and still currently available) for withdrawal under the company's revolving credit facility.

Q4 Same-Store Results

At December 31, 2021, Global Self Storage owned nine same-store properties and three non-same-store properties, and managed one third-party owned property.

For the fourth quarter of 2021, same-store revenues increased 15.0% to $2.2 million compared to $1.9 million in the same period last year. This increase was due primarily to consistent rent collections despite the COVID-19 pandemic, and increased rental rates.

Same-store cost of operations in the fourth quarter increased 6.4% to $747,000, compared to $702,000 in the same period last year. This increase in same-store cost of operations was due primarily to increased administrative and real estate tax expenses for the period.

Same-store NOI increased 20.1% to $1.4 million in the fourth quarter of 2021, compared to $1.2 million in the same period last year. The increase was primarily due to the increase in same-store revenues.

Same-store occupancy at December 31, 2021 decreased to 94.1% from 95.1% at December 31, 2020.

Same-store average duration of tenant stay at December 31, 2021 was 3.3 years, up from approximately 3.0 years at December 31, 2020.

For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.

Q4 Operating Results

Net income in the fourth quarter of 2021 was $1.4 million or $0.13 per diluted share, compared to $316,000 or $0.03 per diluted share in the fourth quarter of 2020.

General and administrative expenses increased to $570,000 in the fourth quarter of 2021, as compared to $567,000 in the same period last year.

Business development costs increased to $35,000 in the fourth quarter of 2021 compared to $470 in the same period last year. The increase is primarily attributable to more activities related to capital raising, store acquisitions, and third-party management marketing expenses.

Interest expense for the fourth quarter of 2021 decreased to $218,000 from $289,000 in the year-ago period. This decrease was attributable to a lower amount of funds drawn and fluctuating interest expense on funds drawn on the company's revolving credit facility.

FFO in the fourth quarter of 2021 increased 56.0% to $1.0 million or $0.10 per diluted share, compared to FFO of $650,000 or $0.07 per diluted share in the same period last year.

AFFO in the fourth quarter of 2021 increased 63.0% to $1.1 million or $0.10 per diluted share, compared to AFFO of $677,000 or $0.07 per diluted share in the same period last year.

Full Year 2021 Financial Summary

Total revenues increased 14.3% to $10.5 million in the full year 2021, as compared to $9.2 million in 2020. The increase was primarily attributable to increased rental rates and the company's revenue rate management program for raising existing tenant rates.

Total operating expenses in the full year 2021 decreased 1.9% to $7.8 million, compared to $8.0 million in 2020. The improvement was primarily attributable to a decrease in depreciation and amortization expense.

Operating income increased 120% to $2.7 million in the full year 2021, as compared to $1.2 million in 2020.

Net income was $3.3 million or $0.33 per diluted share in the full year 2021, as compared to net income of $274,000 or $0.03 per diluted share in 2020.

Full year 2021 Same-Store Results

For the full year of 2021, same-store revenues increased 11.2% to $8.3 million compared to $7.4 million in 2020. These increases were due primarily to consistent rent collections despite the COVID-19 pandemic, as well as increased rental rates and company's revenuerate management program that raises existing tenant rates.

Same-store cost of operations in the full year 2021 increased 4.4% to $3.0 million, compared to $2.9 million in 2020. This increase in same-store cost of operations was due primarily to increased expenses for landscaping from snow removal, repairs and maintenance, credit card fees, real estate taxes, utilities, IT maintenance and support, and travel.

Same-store NOI increased 15.5% to $5.3 million in the full year 2021, compared to $4.6 million in 2020. The increase was primarily due to the increase in revenues.

Same-store occupancy at December 31, 2021 decreased to 94.1% from 95.1% at December 31, 2020.

Same-store average duration of tenant stay at December 31, 2021 was 3.3 years, up from approximately 3.0 years as of December 31, 2020.

For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.

Full Year 2021 Operating Results

Net income in the full year 2021 was $3.3 million or $0.33 per diluted share, compared to net income of $274,000 or $0.03 per diluted share in 2020.

General and administrative expenses decreased 0.8% to $2.37 million in the full year 2021, compared to $2.39 million in 2020. The decrease was primarily attributable to a decrease in certain professional fees.

Business development costs were $46,000 in the full year 2021 compared to business development costs of $11,000 in 2020. The increase is primarily attributable to increased consulting costs in connection with business development, capital raising, and future potential store acquisitions, and expenses related to the company's third-party management platform marketing initiatives.

Interest expense for the full year 2021 decreased to $1.0 million from $1.2 million in 2020.

FFO in the full year 2021 increased 58.7% to $3.3 million or $0.33 per diluted share, compared to FFO of $2.1 million or $0.23 per diluted share in 2020.

AFFO in the full year 2021 increased 59.7% to $3.6 million or $0.36 per diluted share, compared to AFFO of $2.2 million or $0.24 per diluted share in 2020.

Q4 and Full Year 2021 FFO and AFFO (Unaudited)

Three	Three	Twelve	Twelve
Months	Months	Months	Months
Ended	Ended	Ended	Ended
December	December	December	December
31, 2021	31, 2020	31, 2021	31, 2020
Net income	$ 1,379,643	$ 3,281,251
Eliminate items excluded from FFO:

$

315,785

$

274,341