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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT of 1934
May 2, 2000 (April 26, 2000)
Date of Report (Date of earliest event reported)
STORAGE USA, INC.
(Exact name of registrant as specified in its charter)
Tennessee 001-12910 62-1251239
- ---------------------------- --------------------- --------------------
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
165 Madison Avenue, Suite 1300
Memphis, Tennessee 38103
(Address of principal executive offices)
(901) 252-2000
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
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<PAGE>
INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events.
-------------
On April 26, 2000, the Registrant issued a press release announcing its
financial results for the first quarter of 2000. The press release is attached
as Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and
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Exhibits.
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a) Financial Statements.
--------------------
None
b) Pro Forma Financial Information.
-------------------------------
None
c) Exhibits.
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Number Exhibit
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99 Press Release, dated April 26, 2000.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
STORAGE USA, INC.
Date: May 2, 2000 By: /s/ Christopher P. Marr
------------------------
Christopher P. Marr
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
99 Press Release, dated April 26, 2000.
4
NEWS RELEASE STORAGE USA (R)
165 Madison Avenue, Suite 1300
Memphis, Tennessee 38103
Contact: Christopher P. Marr
Chief Financial Officer
(901) 252-2000
STORAGE USA REPORTS FIRST QUARTER 2000 FFO PER SHARE OF $0.78
MEMPHIS, Tennessee (April 26, 2000) - Storage USA, Inc. (NYSE:SUS)
today announced the results of its first quarter ended March 31, 2000. Funds
from operations for the quarter were $21,632,000, or $0.78 per common share on a
diluted basis, compared to $21,151,000, or $0.76 per share on a diluted basis,
for the quarter ended March 31, 1999.
Storage USA Chairman and Chief Executive Officer Dean Jernigan
commented, "The one-time impact of our change in late fees masked our continued
strong performance in the core operations of our business. Excluding the impact
of the revised late fees, our 6.2% same-store net operating income growth and
the positive impact from our joint ventures and franchising program would have
resulted in 10% FFO per share growth for the first quarter."
During the quarter the Company transferred nine projects that were in
various stages of development into the GE Capital Development Venture,
representing projected aggregate total costs of $53.0 million. The projects were
transferred to the Development Venture at the Company's cost of $26.0 million.
Subsequent to the end of the first quarter, the Company's Acquisition Venture
with GE Capital acquired its first property, a facility in Brooklyn, NY that
will have a total capital commitment of approximately $14,200,000 when all
stages of the project are complete. Mr. Jernigan commented, "We are excited to
move forward with the GE Capital Joint Ventures and create value for our
shareholders. We earned approximately $600,000 in fee revenue during the quarter
and will share with our partner the outstanding economics that self-storage
development and acquisitions present."
The Company has, as of April 24, 2000, repurchased 681,500 shares of
its common stock at a total investment of $20,419,376 under its previously
announced stock buy-back plan. This represents approximately 49% of the
announced repurchase. The Company had 27,846,000 shares outstanding as of March
31, 2000.
Excluding the one-time impact of the revised late fees, net operating
income of the Company's 329 same-store facilities during the first quarter
increased by 6.2%, as a result of revenue growth of 4.6% and a 1.0% increase in
operating expenses. As previously reported, the Company recently implemented a
revised late fee policy. The change was in effect for the first quarter of 2000.
Storage USA's Chief Financial Officer Christopher Marr commented, "The change in
policy resulted in late fee revenue of $0.05 per share less then the revenue
earned in the first quarter of 1999. This was $0.02 per share less than
projected. Based on our first quarter data, we are revising our 2000 estimate of
the effect on our revenues from our late fees. We had anticipated an annual
impact of $4,650,000 or $0.15 per share and have revised that to $6,800,000 or
$0.22 per share."
- more -
<PAGE>
Construction of four facility expansions was completed during first
quarter 2000 for a total investment of $3.5 million. The Company is also
continuing with the development of ten new facilities within the REIT,
independent of the Development Venture, which will add 795,000 square feet.
These facilities have a remaining expected investment of $22.6 million.
Expansions are also underway for 22 facilities, which will add 496,000 square
feet. These expansions have a remaining expected investment of $21.8 million.
Completion dates for these development and expansion facilities range from the
second quarter of 2000 through 2002. The dilution from our development program
was $0.03 per share, consistent with the first quarter of 1999.
During the first quarter, eight new franchised facilities received
their certificates of occupancy and opened for business. The Company served as
general contractor on seven of these facilities. At March 31, 2000, Storage USA
Franchise Corp. had 54 franchised facilities open and operating, a 20% increase
over March 31, 1999. Franchise Corp. currently has 19 facilities in design and
construction. As of March 31, 2000, 138 Storage USA locations are offering
Budget/Ryder truck rentals and 38 additional locations expect to be operating
within the next four weeks. Mr. Jernigan said, "We continue to believe in the
long-term benefits of our alliance with Budget Group, Inc. and our other
strategic initiatives, but we are not expecting to achieve any incremental
revenues from these programs this year."
On April 10, 2000, the Company paid a regular quarterly cash dividend
of $0.69 per share to shareholders of record as of March 24, 2000.
Storage USA, Inc. is a fully integrated, self-administered and
self-managed real estate investment trust, which is engaged in the management,
acquisition, development, construction and franchising of self-storage
facilities. As of March 31, 2000, the Company owns, manages and franchises 510
facilities containing 34,700,000 square feet in 31 states and the District of
Columbia.
Statements in this release concerning Storage USA's beliefs,
expectations and intentions, future events, future performance and business
prospects, including the Company's development and acquisition prospects and
returns expected therefrom, late fee collections, revenue performance and the
Company's business strategies, are forward-looking and are subject to certain
risks and uncertainties. These include, but are not limited to, consumer
acceptance, consumer and business demand for self-storage and supply within a
market, local zoning and other regulations, collection practices, availability
of facilities suitable for acquisition, economic, bank, equity and debt market
conditions and effects of competition. These risks and uncertainties could
significantly affect anticipated results or events in the future, and actual
results may differ materially from any forward-looking statements. These risks
and other risk factors are described in Storage USA' s Form 10-K, particularly
under the caption Forward-Looking Statements and Risk Factors and in the
quarterly reports on Form 10-Q and Storage USA's other filings with the
Securities and Exchange Commission. We are not obligated to update our
forward-looking statements and we may not.
A replay of the Company's earnings conference call will be made available
on Thursday, April 27, 2000 beginning at approximately 3:00 p.m. Eastern and
will be available until May 4, 2000. To listen to the replay, dial
1-334-260-0890. At the Access code prompt enter 40151, and at the Passcode
prompt enter 37677. More information, including quarterly and annual financial
data and a property database, may be obtained through the Company's web site at
www.sus.com.
- End -
<PAGE>
<TABLE>
EXHIBIT A
STORAGE USA, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
------------------------ ------------------------
<S> <C> <C>
Operating Revenues:
Rental Income $58,445 $59,407
Service Income 1,605 277
Other Income 1,836 983
------------- ----------------
Total Operating Revenues 61,886 60,667
------------- ----------------
Operating Expenses:
Cost of Property Operations & Maintenance 15,730 15,034
Taxes 5,187 4,996
Cost of Providing Services 1,285 325
General & Administrative 2,265 3,698
Depreciation & Amortization 9,193 8,356
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Total Operating Expenses 33,660 32,409
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Income from Property Operations 28,226 28,258
Other Income (Expenses):
Interest Expense, Net * (11,047) (10,847)
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Income Before Minority Interest 17,179 17,411
and Gain/(Loss) on Sale/Exchange
Gain/(Loss) on Sale/Exchange of Storage Facilities 890 (578)
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Income Before Minority Interest 18,069 16,833
Minority Interest (3,391) (3,078)
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Net Income $14,678 $13,755
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Basic Net Income per Share $0.53 $0.49
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Diluted Net Income per Share $0.53 $0.49
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Basic Weighted Average Common Shares Outstanding 27,850 27,837
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Diluted Weighted Average Common Shares Outstanding 27,903 27,907
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- --------------------------------------------------------------------------------------------------------------------------
Interest Expense ($14,386) ($13,839)
Interest Income 3,339 2,992
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*Interest Expense, Net ($11,047) ($10,847)
</TABLE>
<PAGE>
<TABLE>
EXHIBIT B
STORAGE USA, INC.
Condensed Balance Sheets
(amounts in thousands)
(unaudited)
<CAPTION>
As of As of
March 31, 2000 December 31, 1999
--------------------------- -------------------------
<S> <C> <C>
Assets
Investments in Storage Facilities, at cost:
Land $438,422 $441,080
Buildings & Equipment 1,217,912 1,229,812
------------------- -----------------
1,656,334 1,670,892
Accumulated Depreciation (103,272) (94,538)
------------------- -----------------
1,553,062 1,576,354
Cash & Other Assets 63,928 58,319
Advances and Investments in Real Estate 131,402 120,246
------------------- -----------------
Total Assets $1,748,392 $1,754,919
=================== =================
Liabilities & Shareholders' Equity
Notes Payable $600,000 $600,000
Line of Credit Borrowings 108,682 105,500
Mortgage Notes Payable 69,588 70,163
Other Borrowings 42,783 42,453
Other Liabilities 91,395 89,765
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Total Liabilities 912,448 907,881
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Minority Interests:
Preferred Units 65,000 65,000
Common Units 85,882 91,143
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Total Minority Interests 150,882 156,143
------------------- -----------------
Total Shareholders' Equity 685,062 690,895
------------------- -----------------
Total Liabilities & Shareholders' Equity $1,748,392 $1,754,919
=================== =================
</TABLE>
<PAGE>
<TABLE>
EXHIBIT C
STORAGE USA, INC.
Funds from Operations
(in thousands, except per share data)
(unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
------------------------ ------------------------
<S> <C> <C>
Funds from Operations Attributable
to Company Shareholders:
Net Income $14,678 $13,755
Loss/(Gain) on Sale of Assets* (595) 578
Depreciation & Amortization 9,193 8,356
Depreciation from Unconsolidated Entities 153 -
Less Depreciation of Non-Revenue Producing ($914) ($572)
Property
----------------- -----------------
Consolidated FFO $22,515 $22,117
Minority Interest Share of Loss on Sale 67 (66)
Minority Interest Share of Depreciation &
Amortization from Unconsolidated Entities (17) -
Minority Interest Share of Depreciation &
Amortization (933) (900)
----------------- -----------------
FFO Available to Company Shareholders $21,632 $21,151
================= =================
Basic FFO per Share, as Reported $0.78 $0.76
Diluted FFO per Share, as Reported $0.78 $0.76
Add Back Negative Impact of
Development Activities $0.03 $0.03
----------------- -----------------
Diluted FFO After Adding Back
Development Dilution $0.81 $0.79
----------------- -----------------
</TABLE>
*Excludes $295 gain on sale of undepreciated land
In calculating FFO per share, Storage USA adds back only depreciation and
amortization of revenue-producing property. As such, Storage USA's FFO and FFO
per share may not be comparable to other REITs which may add back total
depreciation and amortization.
The Company, in accordance with Financial Accounting Standard No. 128, "Earnings
Per Share", is required to report basic and diluted earnings per share. The
Company has chosen to present its FFO per share on the same basis as its
earnings per share. The diluted FFO per share reflects the impact of its
employee stock options.
<PAGE>
<TABLE>
EXHIBIT D
STORAGE USA, INC.
Financial and Operational Highlights
(in thousands except per square foot data)
<CAPTION>
Three Months Ended Three Months Ended %
Same-Store Results March 31, 2000 March 31, 1999 Change
- ----------------------------------------- ------------------------ -------------------------- ---------
<S> <C> <C> <C>
Number of Properties 329 329
Revenues excluding late fees: $48,667 $46,539 4.6%
Expenses:
Operating Expenses $9,429 $9,127 3.3%
Property Tax & Other 5,621 5,770 -2.6%
----------------- ------------- ----------
Total Expenses 15,050 14,897 1.0%
----------------- ------------- ----------
NOI excluding late fees $33,617 $31,642 6.2%
Late Fee Income 1,443 3,017 -52.2%
----------------- ------------- ----------
NOI including late fees $35,060 $34,659 1.2%
- -------------------------------------------------------------------------------------------------------------
Physical Occupancy 83.8% 84.6%
Scheduled Rent per Square Foot $11.87 $11.24 5.6%
Realized Rent per Square Foot $10.48 $9.92 5.6%
Ten Largest Same-Store Markets (for the quarter ended March 31, 2000)
---------------------------------------------
Quarter Ended March 31, 2000 vs.
Quarter Ended March 31, 1999
---------------------------------------------
% % % %
Number of Total Change in Change in Change in
of Same-Store Net Rental Realized Occupied
Market Facilities NOI Income* RPSF Sq. Ft.
- ----------------------------------------------------------------------------------------------------------------------------------
LOS ANGELES-RIVERSIDE-ORANGE COUNTY, CA 46 18.1% 8.3% 8.1% 0.2%
NEW YORK-NORTHERN NEW JERSEY-LONG ISLAND 25 14.7% 6.7% 6.1% 0.5%
WASHINGTON-BALTIMORE, DC-MD-VA-WV 20 9.6% 4.2% 7.3% -2.8%
MIAMI-FORT LAUDERDALE, FL 15 6.4% 3.6% 5.8% -2.1%
PHILADELPHIA-WILMINGTON-ATLANTIC CITY, PA-NJ 14 4.0% 2.7% 5.0% -2.2%
PHOENIX-MESA, AZ 14 3.1% 4.8% 6.5% -1.6%
SAN FRANCISCO-OAKLAND-SAN JOSE, CA 8 3.2% 0.9% 6.2% -5.0%
DALLAS-FORT WORTH, TX 10 3.1% 2.5% 2.9% -0.4%
DETROIT, ANN ARBOR-FLINT, MI 11 2.9% 8.9% 7.4% 1.5%
LAS VEGAS, NV-AZ 11 2.7% 1.9% 3.7% -1.7%
</TABLE>
*Net Rental Income is defined as rental income net of discounts.
<PAGE>
<TABLE>
EXHIBIT D - continued
STORAGE USA, INC.
Financial and Operational Highlights
(in thousands)
Three months ended March 31,
<CAPTION>
2000 1999
------------------------- ---------------------------
Capital Deployment
<S> <C> <C>
Operating Property Acquisitions $0 $305
Land Acquisitions 3,010 2,625
Development and Expansions 9,715 11,297
Franchise Loans 5,583 9,687
GECC Development Venture 6,526 -
------------------------- ---------------------------
Total $24,834 $23,914
========================= ===========================
- ------------------------------------------------------------------------------------------------------------------------------------
On-Balance Sheet
Development & Expansion Expected
to be Placed in Service by Quarter
<CAPTION>
------------------------------------------------------------------------------------
2000 2000 2000 2001-
Q2 Q3 Q4 2002
------------------------------------------------------------------------------------
Development $14,235 $15,023 $5,029 $28,594
Expansion 3,702 2,350 6,135 17,498
------------------------------------------------------------------------------------
Total $17,937 $17,373 $11,164 $46,092
====================================================================================
Construction in Progress As of As of
3/31/00 3/31/99
------------------------------------------------------
$48,443 $64,770
- ------------------------------------------------------------------------------------------------------------------------------------
Five Year Debt Maturity Schedule
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
2000 2001 2002 2003 2004
- --------------------------------------------------------------------------------------------------------------
Unsecured Notes Payable - - - $100,000 -
Mortgages Payable (Principal Pmts) $1,997 $1,461 $1,607 $1,769 $23,463
Non-Interest Bearing Notes Payable $4,000 $5,150 - - -
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
Debt Service
- ------------------------------------------------------------------------------------------------
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
------------------------------------------------------
Interest Expense $14,386 $13,839
Plus:
Capitalized Interest 1,418 1,132
Principal Payments 313 328
------------------------- -------------------------
Debt Service $16,117 $15,299
</TABLE>
<PAGE>
Exhibit E
STORAGE USA, INC.
Share and Unit Information
Common Shares and OP
Units as of March 31
(in thousands) 2000 1999
- -------------------------------------------------------------------------
Common Shares Outstanding 27,846 27,875
Operating Partnership
Units Outstanding 3,491 3,742
---------------- -----------------
Total Shares and Units
Outstanding 31,337 31,617
================ =================
Weighted Average Common
Shares and OP Units
Three Months
Ended March 31,
------------------------------------
(in thousands) 2000 1999
- ----------------------------------------------------- -----------------
Basic Weighted Average
Common Shares Outstanding 27,850 27,837
Dilutive Effect of Stock Options 53 70
---------------- -----------------
Diluted Weighted Average
Common Shares Outstanding 27,903 27,907
---------------- -----------------
Total Weighted Average
Units Outstanding 3,538 3,642
---------------- -----------------
Minority Interests Associated
with Units Outstanding $1,905 $1,795
---------------- -----------------
<PAGE>
Exhibit F
Property Square Footage
As of March 31, 2000
Sq Footage
# of Props (in thousands)
- ------------------------------------------------------------------
Owned 401 27,456
Managed/Franchised 76 4,957
Joint Venture 33 2,304
- ------------------------------------------------------------------
Total 510 34,717
- ------------------------------------------------------------------
Physical Occupancy of Owned Properties
Entire portfolio 80.9%
Dev & Lease-Up Assets 65.2%
Mature Properties 83.8%
- ------------------------------------------------------------------
Service and Other Income Detail
(in thousands)
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
---------------------------------------------
Service Income:
Management Fees $ 612 $ 277
Development Fees 545 -
General Contracting Fees 448 -
-------------------- --------------------
$ 1,605 $ 277
==================== ====================
Other Income:
Property Specific 1,120 1,003
Income from Equity Investments 716 (20)
-------------------- --------------------
$ 1,836 $ 983
==================== ====================
<PAGE>
EXHIBIT G*
STORAGE USA, INC.
Operating Property Summary
Three Months Ended
March 31, 2000
(in thousands)
Rental Income:
Mature $ 51,240 88%
Non-Mature 7,165 12%
Dispositions 40 0%
------------
58,445
Property Other Income:
Mature 997 89%
Non-Mature 123 11%
Dispositions 0 0%
------------
1,120
Operating Expenses Excluding Taxes:
Mature (13,174) 84%
Non-Mature (2,536) 16%
Dispositions (20) 0%
------------
(15,730)
Taxes:
Mature (4,458) 86%
Non-Mature (725) 14%
Dispositions (4) 0%
------------
(5,187)
Net Operating Income:
Mature 34,605 90%
Non-Mature 4,027 10%
Dispositions 16 0%
------------
$ 38,648
<TABLE>
As of March 31, 2000
(in thousands) Total
Undepreciated
Reconciliation to Balance Sheet: # of Props Costs
-------------------------------
<S> <C> <C>
Mature Properties 341 $1,314,278
Recent Acquisitions and Props Acquired in Lease-Up 28 121,959
Recent Expansions 16 70,382
Developments in Lease-Up 16 75,569
Corporate PP&E 13,156
CIP and Capitalized Interest 60,990
-------------------------------
401 $1,656,334
===============================
</TABLE>
* Some properties in Exhibit G have been reclassed from the April 26, 2000 press
release. Eight properties with total undepreciated costs of $30.295 million have
been reclassed from the mature properties pool to recent acquisitions and
properties in lease-up.
