Earnings Call Excerpt
Sovran Self Storage (SSS)
Q4 2008 Earnings Call
February 18, 2009; 09:00 am ET
Executives
Kenneth Myszka - President, Chief Operating Officer
David Rogers - Chief Financial Officer
Analysts
Todd Thomas - KeyBanc Capital Markets
Mark Biffert - Goldman Sachs
David Toti - Citigroup
Lou Taylor - Deutsche Bank
Michael Salinsky - RBC Capital Markets
Paul Adornato - BMO Capital Markets
Presentation
Operator
Good morning, my name is Debbie and I’ll be your conference operator today. At this time I’d like to welcome everyone to the fourth quarter earnings release conference call (Operator Instructions).
Thank you. Mr. Myszka, you may begin your conference.
Kenneth Myszka
Good morning and welcome to our fourth quarter conference call. As a reminder the following discussion will include forward-looking statements. Sovran’s actual results may differ materially from projected results. Additional information concerning the factors that may cause such differences is included in our company’s SEC filings. Copies of these filings may be obtained by contacting the company or the SEC.
In a continuing difficult operating environment, our stores achieved a same store revenue increase of 0.5%. However, our same store expenses impacted primarily by several one time charges increased by 4.7%, resulting in same store NOI of negative 1.8%. Looking back at 2008, I’m pleased with our company’s performance, particularly from a strategic point of view. Let me mention some of our accomplishments.
We negotiated and closed on a $375 million term note and revolving credit facility which maintained our conservatively leveraged balance sheet, and will enable us to weather the current economic crisis. We entered into a joint venture agreement with an affiliate Heitman LLC and purchased 25 stores into the joint venture at a total cost of $171 million.
Although we curtailed our expansion and enhancement program on a going forward basis, we did complete improvements at 20 stores at a total cost of just under $26 million. In addition we increased our dividend for the 14 consecutive year; no small achievement considering today’s troubling economy. So we are proud of our achievements and look forward to the challenges that we’re facing.
Now for a brief review of the fourth quarter; Florida remains a drag on our portfolio’s performance. However, the numbers there are improving and move-ins for the quarter outpaced those of the fourth quarter in 2007, continuing a trend that began in Q3 of ?08. We’ve experienced similar move-in activity company-wide, so that’s good news for us, but this is positive trend did not come without a cost.
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