Cubesmart (CUBE) 10-Q Quarterly Report October 2018

MALVERN, PA -- (Globe Newswire) – October 25, 2018 -- CubeSmart (NYSE: CUBE) today announced its operating results for the three and nine months ended September 30, 2018.

“Third-quarter performance continues to reflect healthy demand trends and a competitive pricing environment,” commented President and Chief Executive Officer Christopher P. Marr. “Our scalable, sophisticated operating platform and customer service focus generated solid results across our portfolio. We remain active and disciplined in pursuing growth opportunities that deliver attractive, risk-adjusted returns to our shareholders.”

Key Highlights for the Quarter

Reported earnings per share (“EPS”) attributable to the Company’s common shareholders of $0.23.

Reported funds from operations (“FFO”) per share, as adjusted, of $0.43, representing a year over year increase of 2.4%.

Increased same-store (458 stores) net operating income (“NOI”) 3.9% year over year, driven by 3.0% revenue growth and a 0.6% increase in property operating expenses.

Same-store occupancy during the quarter averaged 93.3% and ended the quarter at 92.7%.

Closed on three property acquisitions totaling $59.6 million.

Opened for operation one development property for a total cost of $91.5 million.

Sold 0.4 million common shares at an average sales price of $31.38 per share, resulting in net proceeds of $12.9 million.

Added 60 stores to our third-party management platform during the quarter, bringing our total third-party managed store count to 582.

Financial Results

Net income attributable to the Company’s common shareholders was $42.9 million for the third quarter of 2018, compared with $37.3 million for the third quarter of 2017. EPS attributable to the Company’s common shareholders was $0.23 for the third quarter of 2018, compared to $0.21 for the same period last year.

FFO, as adjusted, was $80.7 million for the third quarter of 2018, compared with $77.2 million for the third quarter of 2017. FFO per share, as adjusted, increased 2.4% to $0.43 for the third quarter of 2018, compared with $0.42 for the same period last year.

Investment Activity

Acquisition Activity

The Company acquired three stores in Washington, D.C., Nevada and North Carolina for $59.6 million during the three months ended September 30, 2018 and subsequent to quarter-end, acquired two stores in California and Texas for $76.4 million. In total for the year to date through this press release, the Company has acquired seven properties for $167.2 million and currently has two additional properties under contract for $41.3 million.


Third Quarter 2018		Page 1

The following information was filed by Cubesmart (CUBE) on Friday, October 26, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Cubesmart's 10-Q Quarterly Report:

Financial - Shares Highlight
This change was primarily the result of a $108.6 million increase in proceeds received from the issuance of common shares, offset by a $19.4 million increase in cash distributions paid to common shareholders and noncontrolling interests in the Operating Partnership during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017, resulting from the increase in the common dividend per share and number of shares outstanding.

Financial - Expense Highlight
This increase was primarily attributable to a $4.2 million increase in costs associated with the growth in our third-party management program as well as system enhancements, a $2.7 million increase in property operating expenses on the same-store portfolio primarily due to higher property taxes, payroll, and snow removal expenses, and $3.3 million of increased expenses associated with newly acquired or developed stores.
Revenue - Product Highlight
The Company considers long-lived assets to be held for sale upon satisfaction of the following criteria: (a) management commits to a plan to sell a store (or group of stores), (b) the store is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such stores, (c) an active program to locate a buyer and other actions required to complete the plan to sell the store have been initiated, (d) the sale of the store is probable and transfer of the asset is expected to be completed within one year, (e) the store is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Financial - Expense Highlight
This increase was primarily attributable to a $0.2 million increase in property operating expenses on the same-store portfolio primarily due to higher property taxes and $1.3 million of increased expenses associated with newly acquired or developed stores.
Financial - Earnings Highlight
The following table presents a reconciliation of net income attributable to the Companys common shareholders to FFO attributable to common shareholders and OP unitholders and FFO, as adjusted, attributable to common shareholders and OP Unit holders for the three and nine months ended September 30, 2018 and 2017 (in thousands): 49 (1) Property damage related to hurricanes, net of expected insurance proceeds for the three and nine months ended September 30, 2017 includes $0.1 million of storm damage related costs that are included in the Companys share of equity in losses of real estate ventures.
Financial - Cash Flow
Cash Flows Comparison of the...Read more
M & A - Other
The change was primarily driven...Read more
Financial - Debt
Our ability to borrow under...Read more
Financial - Debt
The eight items that the...Read more
Financial - Shares
At-the-Market Equity Program We maintain...Read more
Financial - Expense
This classification will determine whether...Read more
M & A - Other
Upon adoption of the new...Read more
M & A - Other
Acquisition related costs decreased $0.2...Read more
M & A - Other
Acquisition related costs decreased $1.1...Read more
Other - Other
Cash used in investing activities...Read more
Financial - Expense
The increase was primarily attributable...Read more
Financial - Debt
Unsecured Senior Notes Our unsecured...Read more
Financial - Expense
41 Operating Expenses Property operating...Read more
Financial - Expense
43 Operating Expenses Property operating...Read more
Other - Other
36 Long-lived assets classified as...Read more
Financial - Cash Flow
We will have to satisfy...Read more
Revenue - Product
Revenues Rental income increased from...Read more
Revenue - Product
Revenues Rental income increased from...Read more
Revenue - Product
This increase was attributable to...Read more
Revenue - Product
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Financial - Cash Flow
Our most restrictive financial covenants...Read more
Financial - Earnings
NOI also can be calculated...Read more
Other - Other
As of September 30, 2018,...Read more
Financial - Debt
In addition, dislocation in the...Read more
Financial - Expense
The remainder of the increase...Read more
Other - Other
Cash used in financing activities...Read more
Other - Other
The standard became effective on...Read more
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Both standards became effective on...Read more
Revenue - Product
The new guidance became effective...Read more
Other - Other
The Company plans to adopt...Read more
Revenue - Product
In May 2016, the FASB...Read more
Financial - Debt
The weighted average effective interest...Read more
Financial - Debt
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Other - Other
Expenditures for significant renovations or...Read more
Financial - Expense
General and administrative expenses increased...Read more
Other - Other
Depreciation and amortization decreased from...Read more
Other - Other
Depreciation and amortization decreased from...Read more
Revenue - Product
Our approach to the management...Read more
Other - Other
We also believe that the...Read more
M & A - Other
When a portfolio of stores...Read more
Other - Other
For a complete discussion of...Read more
Other - Other
To date, no intangible asset...Read more
Other - Other
The available balance under the...Read more
Revenue - Product
Accordingly, revenue recognized under the...Read more
Revenue - Geography
We believe that same-store results...Read more
Financial - Income
Other property related income increased...Read more
Financial - Income
Other property related income increased...Read more
Financial - Income
The $3.5 million increase in...Read more
Financial - Income
The $11.6 million increase in...Read more
Other - Other
As of September 30, 2018,...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Cubesmart provided additional information to their SEC Filing as exhibits

Exhibit 12.1: Statement Regarding Calculation Of Ratios

Exhibit 12.2: Statement Regarding Calculation Of Ratios

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.3: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.4: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: CUBE
CIK: 1298675
Form Type: 10-Q Quarterly Report
Accession Number: 0001298675-18-000031
Submitted to the SEC: Fri Oct 26 2018 12:33:13 PM EST
Accepted by the SEC: Fri Oct 26 2018
Period: Sunday, September 30, 2018
Industry: Real Estate Investment Trusts