Global Self Storage : Reports Record Second Quarter 2022 Results

August 10, 2022

Global Self Storage Reports Record Second Quarter 2022 Results

Robust Pricing Power, Operational Excellence and Industry Strength Continued to Drive Record Revenues and Net Operating Income, and Strong FFO and AFFO Growth Rate

MILLBROOK, NY / ACCESSWIRE / August 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 second quarter ended June 30, 2022. All comparisons are to the same year-ago period unless otherwise noted.

Q2 2022 Highlights

Total revenues increased 15.7% to record $3.0 million. Operating income increased 41.6% to $899,000.

Net income totaled $404,000 or $0.04 per diluted share.

Funds from operations (FFO) increased 43% to $1.1 million or $0.10 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 41.6% to $1.2 million or $0.11 per diluted share.

Same-store revenues increased 15.7% to a record $3.0 million.

Same-store net operating income (NOI),a non-GAAP term, increased 18.7% to a record $2.0 million.

Same-store occupancy at June 30, 2022 decreased to 93.1% from 95.7% at June 30, 2021, as the company optimized rental revenue under its revenue rate management program.

Same-store average tenant duration of stay at June 30, 2022 was approximately 3.2 years, up from approximately 2.8 years as of June 30, 2021.

Maintained quarterly dividend of $0.065 per share.

Capital resources at June 30, 2022 totaled approximately $22.9 million. This was comprised of $5.3 million in cash, cash equivalents and restricted cash, $2.7 million in marketable securities, and $15 million available under a credit facility.

First Half 2022 Highlights

Total revenues increased 15.6% to record $5.8 million.

Operating income increased 43.2% to $1.6 million.

Net income totaled $687,000 or $0.06 per diluted share.

FFO increased 46.8% to $2.0 million or $0.19 per diluted share (see definition of this and other non-GAAP measures and their reconciliation to GAAP, below).

AFFO, a non-GAAP term, increased 46.9% to $2.2 million or $0.20 per diluted share. Same-store revenues increased 15.7% to a record $5.8 million.

Same-store NOI, a non-GAAP term, increased 20.3% to a record $3.7 million. Same-store occupancy at June 30, 2022 decreased to 93.1% from 95.7% at June 30, 2021, as the company optimized rental revenue under its revenue rate management program.

Same-store average tenant duration of stay at June 30, 2022 was approximately 3.2 years, up from approximately 2.8 years as of June 30, 2021.

Dividend Increase

On August 2, 2022, the company increased its dividend by 11.5% and declared a dividend of $0.0725 per common share for the third quarter of 2022. The quarterly distribution represents an annualized dividend rate of $0.29 per share, an increase of $0.03 per share from the previous annual rate of $0.26 per share. The dividend is payable on September 30, 2022 to stockholders of record as of September 16, 2022.

Management Commentary

"In Q2, we achieved another quarter of record same-store revenues and NOI while continuing to effectively control costs," stated Global Self Storage president and CEO, Mark C. Winmill. "We also continued to benefit from our revenue rate management program which dynamically manages move-in rates and existing tenant rent increases. It has enabled us to maintain a hedge against inflation due to our ability to quickly adapt our pricing to market conditions on our month-to-month rentals.

"Our strong pricing power, operational excellence and revenue rate management program has driven strong cash flow, and this has allowed us to increase our dividend for common stockholders by 11.5%.

"Our available capital resources totaled approximately $22.9 million at quarter end, which positions us well to pursue a variety of potential growth opportunities, such as acquisitions, either as wholly owned or joint ventures. We continue to evaluate potential acquisitions of self storage properties in secondary and tertiary markets, where we expect lower supply growth and generally less competition from other professionally managed self-storage providers.

"The objective of the company is to increase value over time for the benefit of its stockholders. 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 board of directors regularly reviews our strategic business plan, including 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.

"Looking ahead, we believe that our emphasis on secure, clean, high-quality properties will continue to draw high quality tenants and generate attractive returns for our stockholders."

Q2 2022 Financial Summary

Total revenues increased 15.7% to $3.0 million in the second quarter of 2022, as compared to $2.6 million in the same period last year. This increase was due primarily to an increase in rental rates.

Total operating expenses in the second quarter of 2022 increased 7.2% to $2.1 million, as compared to $1.9 million in the same period last year. The increase was primarily attributable to an increase in store operating expenses, including utilities, repairs and maintenance, and real estate property taxes.

Operating income increased 41.6% to $899,000 in the second quarter of 2022, as compared to $635,000 in the same period last year.

Net income was $404,000 or $0.04 per diluted share in the second quarter of 2022, as compared to $861,000 or $0.09 per diluted share in the same period last year.

As of June 30, 2022, the company's capital resources totaled approximately $22.9 million, comprised of $5.3 million in cash, cash equivalents and restricted cash, $2.7 million of marketable securities, and $15.0 million available for withdrawal under the company's revolving credit facility.

Q2 2022 Same-Store Results

As of June 30, 2022, the company owned 12 same-store properties and no non-same-store properties, and managed one third-party owned property.

For the second quarter of 2022, same-store revenues increased 15.7% to $3.0 million compared to $2.6 million in the same period last year. This increase was due primarily to consistent rent collections and increased rental rates.

Same-store cost of operations in the second quarter increased 10.2% to $989,000 compared to $897,000 in the same period last year. This increase in same-store cost of operations was due primarily to increased expenses for utilities, repairs and maintenance, and real estate property taxes.

Same-store NOI increased 18.7% to $2.0 million in the second quarter of 2022, compared to $1.7 million in the same period last year. The increase was primarily due to the increase in same-store revenues.

Same-store occupancy at June 30, 2022 decreased to 93.1% from 95.7% at June 30, 2021.

Same-store average duration of tenant stay at June 30, 2022 was 3.2 years, up from approximately 2.8 years at June 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.

Q2 2022 Operating Results

Net income in the second quarter of 2022 was $404,000 or $0.04 per diluted share,

compared to $861,000 or $0.09 per diluted share in the second quarter of 2021.

Property operations expense increased to $989,000 in the second quarter of 2022, as compared to $897,000 in the same period last year.

General and administrative expenses increased to $653,000 in the second quarter of 2022, as compared to $631,000 in the same period last year.

Business development costs increased to $33,300 in the second quarter of 2022 compared to $4,800 in the same period last year.

Interest expense for the second quarter of 2022 decreased to $220,000 from $287,000 in the year-ago period. This decrease was attributable to the lower principal balance on outstanding debt and the change in fair value of the interest rate cap.

FFO in the second quarter of 2022 increased 43.0% to $1.1 million or $0.10 per diluted share, compared to FFO of $773,000 or $0.08 per diluted share in the same period last year.

AFFO in the second quarter of 2022 increased 41.6% to $1.2 million or $0.11 per diluted share, compared to AFFO of $833,000 or $0.09 per diluted share in the same period last year.

First Half 2022 Financial Summary

Total revenues increased 15.6% to $5.8 million in the first half of 2022, as compared to $5.0 million in the same period last year. The increase was primarily attributable to increases in rental rates.

Total operating expenses in the first half of 2022 increased 7.9% to $4.2 million, compared to $3.9 million in the same period last year. The increase was primarily due to increases in store operating expenses, general and administrative expenses, and business development expense partially offset by a decrease in depreciation and amortization expense.

Operating income increased 43.2% to $1.6 million in the first half of 2022, as compared to $1.1 million in the same period last year.

Net income was $687,000 or $0.06 per diluted share in the first half of 2022, as compared to $1.3 million or $0.13 per diluted share in the same period last year.

First Half 2022 Same-Store Results

For the first half of 2022, same-store revenues increased 15.7% to $5.8 million compared to $5.0 million in the same period last year. These increases were due primarily to increased rental rates.

Same-store cost of operations in the first half of 2022 increased 8.0% to $2.0 million, compared to $1.9 million in the same period last year. This increase in same-store cost of operations was due primarily to increased expenses for utilities, repairs and maintenance, and real estate property taxes.

Same-store NOI increased 20.3% to $3.7 million in the first half of 2022, compared to $3.1

million in the same period last year. The increase was primarily due to the increase in revenues.

Same-store occupancy at June 30, 2022 increased to 93.1% from 95.7% at June 30, 2021.

Same-store average duration of tenant stay at June 30, 2022 was 3.2 years, up from approximately 2.8 years as of June 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 Half 2022 Operating Results

Net income in the first half of 2022 was $687,000 or $0.06 per diluted share, compared to $1.3 million or $0.13 per diluted share in the first half of 2021.

Property operations expense increased to $2.0 million in the first half of 2022, as compared to $1.9 million in the first half of 2021.

General and administrative expenses increased to $1.3 million in the first half of 2022, as compared to $1.2 million in the first half of 2021.

Business development costs increased to $42,100 in the first half of 2022 compared to $4,800 in the first half of 2021.

Interest expense for the first half of 2022 decreased to $409,000 from $572,000 in the year- ago period. This decrease was attributable to the lower principal balance on outstanding debt and the change in fair value of the interest rate cap.

FFO in the first half of 2022 increased 46.8% to $2.0 million or $0.19 per diluted share, compared to FFO of $1.4 million or $0.15 per diluted share in the same period last year.

AFFO in the first half of 2022 increased 46.9% to $2.2 million or $0.20 per diluted share, compared to AFFO of $1.5 million or $0.16 per diluted share in the same period last year.

Q2 and First Half 2022 FFO and AFFO (Unaudited)

For the Three Months		For the Six Months Ended
Ended June 30,		June 30,

Net income

Eliminate items excluded from FFO:

Unrealized loss (gain) on marketable equity securities Depreciation and amortization

Gain on PPP loan forgiveness

FFO attributable to common stockholders

2022

2021

2022

2021

• 404,200 $ 861,299 $ 687,407 $ 1,272,546

604,622		(494,461 )	830,373		(709,197 )
404,462		406,561		809,383		812,175
(307,210 )	-		(307,210 )	-
1,106,074				773,399				2,019,953				1,375,524

Adjustments:

Compensation expense related to stock-based awards

Business development, capital raising, store acquisition, and third-party management marketing expenses

39,329	54,476	91,933	86,182
33,310				4,837				42,110				4,837

AFFO attributable to common stockholders	$		1,178,713		$		832,712		$		2,153,996		$		1,466,543
Earnings per share attributable to common stockholders - basic $	0.04	$	0.09	$	0.06	$	0.14