Sovran Self Storage Inc., a self-storage real estate investment trust (REIT), reported operating results for the quarter ended June 30, 2009.
Net income available to common shareholders for the second quarter of 2009 was $6.3 million, or $.28 per diluted share, compared to $10.5 million, or $.48 per diluted share, for the same quarter last year. Funds from operations for the quarter were $.66 per fully diluted common share. The company said the primary factors leading to the lower earnings were the one-time costs of almost $1 million associated with a first-quarter covenant waiver, higher interest expense associated with the company’s recent long-term financing, and increased customer move-in incentives.
Occupancy levels at the company’s 385 storage facilities improved to 82.5 percent, an increase of 360 basis points since March 31. “In a very challenging environment, we’re pleased to see our marketing and call-center efforts take hold,” said Kenneth Myszka, president and chief operating officer. “During the quarter, we had a net gain of 9,400 customers on a same-store basis, and while we made heavy use of incentives, this got our summer season off to a solid start.”
In early May, the company announced it had breached a debt covenant with its lenders. “During the quarter, we took the necessary steps to fix this problem and to improve our liquidity position,” said David Rogers, chief financial officer. “We became even more prudent regarding acquisitions and expansions, reduced the dividend on our common stock, and raised some equity through our DRIP and Stock Purchase Plans. We’ve gained sufficient room concerning the covenant restriction and, at June 30, we have in excess of $60 million in cash and permissible borrowings remaining on our credit line.”
To view the company’s detailed financial results for the second quarter of 2009, visit http://www.unclebobs.com/downloads/09-08-05.pdf.