Sovran Self Storage Inc. (NYSE:SSS) filed Quarterly Report for the period ended 2010-03-31.
Sovran Self Storage Inc. has a market cap of $1.05 billion; its shares were traded at around $38.26 with a P/E ratio of 12 and P/S ratio of 5.5. The dividend yield of Sovran Self Storage Inc. stocks is 4.7%.SSS is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:We recorded rental revenues of $46.2 million for the three months ended March 31, 2010, a decrease of $0.7 million or 1.4% when compared to rental revenues for the three months ended March 31, 2009 of $46.8 million. The decrease in rental revenue resulted from a 1.5% decrease in rental revenues at the 353 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2009). The decrease in same store rental revenues was a result of a 1.0% decrease in average rental income per square foot as a result of increased move-in incentives used to attract customers. We also experienced a decrease in square foot occupancy of 50 basis points, which we believe resulted from general economic conditions, in particular the housing sector. Other income, which includes merchandise sales, insurance commissions, truck rentals, management fees and acquisition fees, increased $0.1 million for the three months ended March 31, 2010 as compared to the same period in 2009 primarily as a result of an increase in commissions earned from our customer insurance program.
As described in Note 5 to the financial statements, during April 2010 we sold two non-strategic storage facilities for net proceeds of $2.4 million, resulting in a loss recorded in the first quarter of $0.6 million. During the third and fourth quarters of 2009 the Company sold five non-strategic storage facilities for net cash proceeds of $16.3 million. The first quarter operations of these facilities are reported in income from discontinued operations for 2010 and 2009.
On May 6, 2009, we announced a reduction in our quarterly dividend from $0.64 per share to $0.45 per share. In addition to the reduction in the dividend, in the second quarter of 2009 we changed our policy of declaring the dividend from the last week in the quarter to the first week following the quarter end. A dividend of $0.45 per common share was declared on January 4, 2010 and paid on January 26, 2010. The dividend paid amounted to $12.4 million. In 2010, we expect to declare and pay four dividends in the calendar year.
On October 5, 2009, the Company completed the public offering of 4,025,000 shares of its common stock at $29.75 per share. Net proceeds to the Company after deducting underwriting discounts and commissions and estimated offering expenses were approximately $114.0 million. The Company used the net proceeds from the offering to repay $100 million of the Companys unsecured term note due June 2012 and to terminate two interest rate swaps relating to the debt repaid at a cost of $8.4 million. The Company used the remaining proceeds along with operating cash flows to payoff a maturing mortgage in December 2009 of $26.1 million.
September 2008, the Companys term note that was to mature in September 2009, the term note maturing in July 2008, and to provide for working capital. We repaid $100 million of this term note with the proceeds of our common stock offering. The agreements also provide for a $125 million (expandable to $175 million) revolving line of credit maturing June 2011 bearing interest at a variable rate equal to LIBOR plus 1.375% (based on the Companys credit rating at March 31, 2010), and requires a 0.25% facility fee. The interest rate at March 31, 2010 on the Companys available line of credit was approximately 1.62% (1.61% at December 31, 2009). At March 31, 2010, there was $125 million available on the unsecured line of credit. We believe that if operating results remain consistent with historical levels and levels of other debt and liabilities remain consistent with amounts outstanding at March 31, 2010, the entire $125 million line of credit could be drawn without violating our debt covenants.
In 2009 we scaled back a planned $50 million program to expand and enhance our existing properties. Instead we spent approximately $18 million to add 175,000 square feet to existing properties, and to convert 64,000 square feet to premium storage. We also completed construction of a new 78,000 square foot facility in Richmond, Virginia. Although we do not expect to construct any new facilities in 2010, we do plan to expend up to $20 million to expand and enhance existing facilities.
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