2017 Q1 Form 10-Q Financial Statement

#000119312517168648 Filed on May 12, 2017

View on sec.gov

Income Statement

Concept 2017 Q1 2016 Q1
Revenue $17.71M $6.235M
YoY Change 184.02% 107.35%
Cost Of Revenue $5.937M $2.497M
YoY Change 137.79% 109.8%
Gross Profit $11.77M $3.738M
YoY Change 214.9% 105.75%
Gross Profit Margin 66.47% 59.95%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $4.774M $1.457M
YoY Change 227.63% -12.36%
% of Gross Profit 40.56% 38.99%
Operating Expenses
YoY Change
Operating Profit -$552.1K -$3.814M
YoY Change -85.52% 30.68%
Interest Expense $3.564M $482.2K
YoY Change 639.16% -9.29%
% of Operating Profit
Other Income/Expense, Net -$84.35K -$29.73K
YoY Change 183.73% -43.1%
Pretax Income
YoY Change
Income Tax
% Of Pretax Income
Net Earnings -$5.221M -$4.505M
YoY Change 15.9% -9.53%
Net Earnings / Revenue -29.49% -72.26%
Basic Earnings Per Share
Diluted Earnings Per Share
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2017 Q1 2016 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $11.58M $63.57M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $835.7M $317.3M
YoY Change 163.35% 106.92%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities
YoY Change
LONG-TERM LIABILITIES
Long-Term Debt
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities
Total Long-Term Liabilities
Total Liabilities $404.0M $52.17M
YoY Change 674.37% -38.39%
SHAREHOLDERS EQUITY
Retained Earnings -$48.97M -$22.19M
YoY Change 120.65% 200.87%
Common Stock $496.2M $292.0M
YoY Change 69.9% 1271.25%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $412.7M $262.8M
YoY Change
Total Liabilities & Shareholders Equity $835.7M $317.3M
YoY Change 163.35% 106.92%

Cashflow Statement

Concept 2017 Q1 2016 Q1
OPERATING ACTIVITIES
Net Income -$5.221M -$4.505M
YoY Change 15.9% -9.53%
Depreciation, Depletion And Amortization $4.774M $1.457M
YoY Change 227.63% -12.36%
Cash From Operating Activities
YoY Change
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities
YoY Change
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $18.76M $115.4M
YoY Change -83.75% 1315.38%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities
YoY Change
NET CHANGE
Cash From Operating Activities
Cash From Investing Activities
Cash From Financing Activities
Net Change In Cash -2.742M
YoY Change
FREE CASH FLOW
Cash From Operating Activities
Capital Expenditures
Free Cash Flow
YoY Change

Facts In Submission

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<div> <p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> <b>Note 1. Organization</b></p> <p style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Strategic Storage Trust II, Inc., a Maryland corporation (the &#x201C;Company&#x201D;), was formed on January&#xA0;8, 2013 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in self storage facilities. The Company&#x2019;s <font style="white-space:nowrap">year-end</font> is December&#xA0;31. As used in this report, &#x201C;we,&#x201D; &#x201C;us,&#x201D; &#x201C;our,&#x201D; and &#x201C;Company&#x201D; refer to Strategic Storage Trust II, Inc. and each of our subsidiaries.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Strategic Storage Holdings, LLC, a Delaware limited liability company (&#x201C;SSH&#x201D;), was the sponsor of our Offering (as defined below) through August&#xA0;31, 2014. Effective August&#xA0;31, 2014, SmartStop Self Storage, Inc. (&#x201C;SmartStop&#x201D;), entered into a series of transactions, agreements and amendments to its existing agreements and arrangements (such agreements and amendments hereinafter referred to collectively as the &#x201C;Self Administration and Investment Management Transaction&#x201D;) with SSH and its affiliates, pursuant to which, effective August&#xA0;31, 2014, SmartStop acquired the self storage advisory, asset management, property management and investment management businesses of SSH. SmartStop also acquired SSH&#x2019;s sole membership interest in SmartStop Asset Management, LLC (formerly Strategic Storage Realty Group, LLC), which owns 97.5% of the economic interests (and 100% of the voting membership interests) of Strategic Storage Advisor II, LLC (our &#x201C;Advisor&#x201D;) and owns 100% of Strategic Storage Property Management II, LLC (our &#x201C;Property Manager&#x201D;).</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On October&#xA0;1, 2015, SmartStop and Extra Space Storage Inc. (&#x201C;Extra Space&#x201D;), along with subsidiaries of each of SmartStop and Extra Space, closed on a merger transaction (the &#x201C;Extra Space Merger&#x201D;) in which SmartStop was acquired by Extra Space for $13.75 per share in cash, representing an enterprise value of approximately $1.4&#xA0;billion. At the closing of the Extra Space Merger, SmartStop Asset Management, LLC, the owner of our Property Manager and majority owner and sole voting member of our Advisor, was sold to an entity controlled by H. Michael Schwartz, our Chairman of the Board of Directors and Chief Executive Officer, and became our sponsor (our &#x201C;Sponsor&#x201D;). The former executive management team of SmartStop continues to serve as the executive management team for our Sponsor. In addition, our management team remains the same, as well as the management team of our Advisor and Property Manager.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> We have no employees. Our Advisor, a Delaware limited liability company, was formed on January&#xA0;8, 2013. Our Advisor is responsible for managing our affairs on a <font style="white-space:nowrap"><font style="white-space:nowrap">day-to-day</font></font> basis and identifying and making acquisitions and investments on our behalf under the terms of the advisory agreement we have with our Advisor (our &#x201C;Advisory Agreement&#x201D;). The officers of our Advisor are also officers of us and our Sponsor.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On August&#xA0;2, 2013, our Advisor purchased 100 shares of our common stock for $1,000 and became our initial stockholder. Our Articles of Amendment and Restatement, as amended, authorized 350,000,000 shares of Class&#xA0;A common stock, $0.001 par value per share (the &#x201C;Class&#xA0;A Shares&#x201D;) and 350,000,000 shares of Class&#xA0;T common stock, $0.001 par value per share (the &#x201C;Class&#xA0;T Shares&#x201D;) and 200,000,000 shares of preferred stock with a par value of $0.001. We offered a maximum of $1.0&#xA0;billion in common shares for sale to the public (the &#x201C;Primary Offering&#x201D;) and $95.0&#xA0;million in common shares for sale pursuant to our distribution reinvestment plan (collectively, the &#x201C;Offering&#x201D;).</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On January&#xA0;10, 2014, the Securities and Exchange Commission (&#x201C;SEC&#x201D;) declared our registration statement effective. On May&#xA0;23, 2014, we satisfied the $1.5&#xA0;million minimum offering requirements of our Offering and commenced formal operations. On September&#xA0;28, 2015, we revised our Primary Offering to offer two classes of shares of common stock: Class&#xA0;A Shares and Class&#xA0;T Shares. On January&#xA0;9, 2017, our Primary Offering terminated. We sold approximately 48&#xA0;million Class&#xA0;A Shares and approximately 7&#xA0;million Class&#xA0;T Shares for approximately $493&#xA0;million and $73&#xA0;million respectively, in our Offering. On November&#xA0;30, 2016, we filed with the SEC a Registration Statement on Form <font style="white-space:nowrap">S-3,</font> which registered up to an additional $100.9&#xA0;million in shares under our distribution reinvestment plan (our &#x201C;DRP Offering&#x201D;). The DRP Offering may be terminated at any time upon 10 days&#x2019; prior written notice to stockholders. As of March&#xA0;31, 2017, we had sold approximately 0.3&#xA0;million Class&#xA0;A Shares and approximately 50,000 Class&#xA0;T Shares for approximately $3.4&#xA0;million and $0.5&#xA0;million, respectively, in our DRP Offering.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> On April&#xA0;13, 2017, our board of directors, upon recommendation of our nominating and corporate governance committee, approved an estimated value per share of our common stock of $10.22 for our Class&#xA0;A Shares and Class&#xA0;T Shares based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding on a fully diluted basis, calculated as of December&#xA0;31, 2016. See our Current Report on Form <font style="white-space:nowrap">8-K</font> filed with the SEC on April&#xA0;18, 2017 for a description of the methodologies and assumptions used to determine, and the limitations of, the estimated value per share.</p> <p style="font-size:1px;margin-top:12px;margin-bottom:0px"> &#xA0;</p> <p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> As a result of the calculation of our estimated value per share, effective in May 2017, shares sold pursuant to our distribution reinvestment plan are sold at the estimated value per share of $10.22 for both Class&#xA0;A Shares and Class&#xA0;T Shares.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Our operating partnership, Strategic Storage Operating Partnership II, L.P., a Delaware limited partnership (our &#x201C;Operating Partnership&#x201D;), was formed on January&#xA0;9, 2013. During 2013, our Advisor purchased limited partnership interests in our Operating Partnership for $200,000 and on August&#xA0;2, 2013, we contributed the initial $1,000 capital contribution we received to our Operating Partnership in exchange for the general partner interest. In conjunction with the Toronto Merger (as defined in Note 7) we issued an aggregate of approximately 483,197 Class&#xA0;A Units of our Operating Partnership to the common stockholders of SS Toronto, consisting of Strategic 1031, LLC (&#x201C;Strategic 1031&#x201D;), a subsidiary of our Sponsor, and SS Toronto REIT Advisors, Inc., an affiliate of our Sponsor. Our Operating Partnership owns, directly or indirectly through one or more special purpose entities, all of the self storage properties that we have acquired and the self storage properties we will acquire in the future. As of March&#xA0;31, 2017, we owned approximately 99.1% of the common units of limited partnership interests of our Operating Partnership. The remaining approximately 0.9% of the common units are owned by our Advisor, Strategic 1031, and SS Toronto REIT Advisors, Inc. As the sole general partner of our Operating Partnership, we have the exclusive power to manage and conduct the business of our Operating Partnership. We conduct certain activities through our taxable REIT subsidiary, Strategic Storage TRS II, Inc., a Delaware corporation (the &#x201C;TRS&#x201D;), which is a wholly-owned subsidiary of our Operating Partnership.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Our Property Manager was formed on January&#xA0;8, 2013 to manage our properties. Our Property Manager derives substantially all of its income from the property management services it performs for us. Our Property Manager may enter into <font style="white-space:nowrap">sub-property</font> management agreements with third party management companies and pay part of its management fee to such <font style="white-space:nowrap">sub-property</font> manager. At the closing of the Extra Space Merger, we entered into new property management agreements with our Property Manager and our Property Manager entered into <font style="white-space:nowrap">sub-property</font> management agreements with an affiliate of Extra Space for the management of our properties in the United States. Furthermore, Extra Space acquired the rights to the &#x201C;SmartStop<sup style="font-size:85%; vertical-align:top">&#xAE;</sup> Self Storage&#x201D; brand in the United States through the Extra Space Merger and we could no longer utilize this brand in the United States. The properties we owned were <font style="white-space:nowrap">re-branded</font> under the Extra Space name subsequent to the Extra Space Merger. However, any properties owned or acquired in Canada are managed by a subsidiary of our Sponsor and continue to be branded using the SmartStop<sup style="font-size:85%; vertical-align:top">&#xAE;</sup> Self Storage brand.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Our dealer manager was Select Capital Corporation, a California corporation (our &#x201C;Dealer Manager&#x201D;). Our Dealer Manager was responsible for marketing our shares offered pursuant to our Primary Offering. Our Chief Executive Officer owned, through a wholly-owned limited liability company, a 15% <font style="white-space:nowrap">non-voting</font> equity interest in our Dealer Manager through August&#xA0;31, 2014. Effective August&#xA0;31, 2014, SmartStop indirectly owned the 15% <font style="white-space:nowrap">non-voting</font> equity interest in our Dealer Manager pursuant to the Self Administration and Investment Management Transaction. Effective October&#xA0;1, 2015, in connection with the Extra Space Merger, the 15% <font style="white-space:nowrap">non-voting</font> equity interest in our Dealer Manager is now owned by our Sponsor. An affiliate of our Dealer Manager continues to own a 2.5% <font style="white-space:nowrap">non-voting</font> membership interest in our Advisor.</p> <p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"> As we accepted subscriptions for shares of our common stock, we transferred all of the net offering proceeds to our Operating Partnership as capital contributions in exchange for additional units of interest in our Operating Partnership. However, we were deemed to have made capital contributions in the amount of gross proceeds received from investors, and our Operating Partnership was deemed to have simultaneously paid the sales commissions and other costs associated with the Offering. In addition, our Operating Partnership is structured to make distributions with respect to limited partnership units that are equivalent to the distributions made to holders of common stock. Finally, a limited partner in our Operating Partnership may later exchange his or her limited partnership units in our Operating Partnership for shares of our common stock at any time after one year following the date of issuance of their limited partnership units, subject to certain restrictions outlined in our Operating Partnership&#x2019;s limited partnership agreement (the &#x201C;Operating Partnership Agreement&#x201D;). Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as it is acting as our Advisor pursuant to our Advisory Agreement.</p> </div>
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