National Storage Affiliates(US:NSA)2025-05-06 20:07Revenue Performance - Total revenue decreased by $7.8 million, or 4.0%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to the contribution of 56 self storage properties to the 2024 Joint Venture and the sale of 42 self storage properties [123]. - Rental revenue decreased by $10.9 million, or 6.0%, for the three months ended March 31, 2025, attributed to the contribution of 56 self storage properties to the 2024 Joint Venture and the sale of 42 self storage properties [124]. - Total rental revenue fell by $10.9 million, or 6.1%, from $180.4 million in Q1 2024 to $169.5 million in Q1 2025 [147]. - Same store portfolio rental revenues decreased by $5.4 million, or 3.2%, from $167.6 million in Q1 2024 to $162.2 million in Q1 2025, primarily due to a drop in average occupancy from 85.8% to 83.9% [148]. - Other property-related revenue increased by $0.1 million, or 0.8%, for the three months ended March 31, 2025, compared to the same period in 2024 [125]. - Other property-related revenue for the same store portfolio increased by $0.3 million, or 4.3%, from $6.2 million in Q1 2024 to $6.4 million in Q1 2025 [149]. Occupancy and Operational Metrics - Average portfolio occupancy declined from 85.2% for the three months ended March 31, 2024, to 83.4% for the same period in 2025 [123]. - Annualized total portfolio rental revenues per occupied square foot decreased from $15.70 to $15.58, a decline of 0.8%, driven by decreased contractual lease rates for in-place tenants [124]. - Net operating income (NOI) decreased by $11.3 million, or 8.5%, from $132.4 million in Q1 2024 to $121.1 million in Q1 2025 [151]. - EBITDA dropped by $71.3 million, or 38.3%, from $186.0 million in Q1 2024 to $114.6 million in Q1 2025 [155]. - Adjusted EBITDA decreased by $6.9 million, or 5.3%, from $129.9 million in Q1 2024 to $123.0 million in Q1 2025 [155]. Income and Expenses - Net income attributable to common shareholders decreased by $46.0 million, from $53.9 million in Q1 2024 to $7.9 million in Q1 2025 [122]. - Income before income taxes fell by $75.3 million, from $96.0 million in Q1 2024 to $20.6 million in Q1 2025 [122]. - Total operating expenses slightly decreased by $0.35 million, or 0.3%, from $121.2 million in Q1 2024 to $120.8 million in Q1 2025 [122]. - Property operating expenses for the same store portfolio rose by $1.8 million, or 3.7%, from $50.4 million in Q1 2024 to $52.2 million in Q1 2025 [150]. - General and administrative expenses decreased by $2.5 million, or 16.1%, for the three months ended March 31, 2025, primarily due to a reduction in management fees following the internalization of the PRO structure [128]. Debt and Interest Expenses - Interest expense increased by $2.4 million, from $38.1 million in Q1 2024 to $40.5 million in Q1 2025 [122]. - Interest expense increased by $2.4 million, or 6.2%, for the three months ended March 31, 2025, attributed to an increase in variable interest rate debt from $138.0 million to $425.8 million [131]. - The company had $425.8 million of debt subject to variable interest rates as of March 31, 2025, with a potential annual impact of $4.3 million on interest expense for a 100 basis point change in reference rates [190]. - Total borrowings under the credit facility as of March 31, 2025, amounted to $1.355 billion, including a $950.0 million Revolver, a $275.0 million Term Loan D, and a $130.0 million Term Loan E [168]. - As of March 31, 2025, the effective interest rates were 3.96% for Term Loan D and 4.89% for Term Loan E [169]. Cash Flow and Capital Expenditures - Cash provided by operating activities fell by $8.4 million, or 8.9%, from $94.0 million in Q1 2024 to $85.6 million in Q1 2025 [163]. - Cash used in investing activities was $9.7 million in Q1 2025, a significant decrease from $567.4 million in Q1 2024 [164]. - Capital expenditures totaled $5.7 million in Q1 2025, slightly up from $5.4 million in Q1 2024 [165]. - Cash used in financing activities decreased to $106.5 million for the three months ended March 31, 2025, from $660.0 million for the same period in 2024 [167]. Shareholder Returns and Dividends - The company paid $43.6 million in distributions to common shareholders and $5.1 million to preferred shareholders during the three months ended March 31, 2025 [185]. - The board declared a cash dividend of $0.57 per common share and OP unit, and $0.375 per Series A Preferred Share on February 13, 2025 [186]. Market and Credit Ratings - Kroll Bond Rating Agency downgraded the issuer and senior notes credit ratings to BBB from BBB+ on March 17, 2025, with a stable outlook [182]. - The self-storage business experiences seasonal fluctuations, with higher revenues typically realized from May through September [188]. - The company has an expansion option under the credit facility that could increase total borrowing capacity to $1.900 billion if fully exercised [168]. - Interest rate swaps are used to moderate exposure to interest rate risk, converting variable rate debt to fixed rates [189].