ANNUAL REPORT
2023
About StorageVault Canada Inc.
StorageVault is Canada’s largest storage provider and is dedicated to safeguarding
the belongings of Canadian families and businesses - owning and managing 243
storage locations across Canada. StorageVault owns 212 of these locations plus
over 5,000 portable storage units representing over 11.8 million square feet of
rentable space on 686 acres of land. StorageVault is represented regionally
under the following brands: Access Storage, Sentinel Storage, Depotium Mini-
Entrepôt and Cubeit Portable Storage. StorageVault also provides last mile
storage and logistics solutions through FlexSpace Logistics and professional
records management services, such as document and media storage, imaging
and shredding services through RecordXpress.
Corporate Information
Website:
www.StorageVaultCanada.com
Email:
Phone:
ir@StorageVaultCanada.com
1-877-622-0205
Address:
100 Canadian Road, Toronto, ON, M1R 4Z5
2
ANNUAL REPORT 2023 TABLE OF CONTENTS
LETTER TO OUR SHAREHOLDERS
04
2023 HIGHLIGHTS
06
OUR NATIONAL FOOTPRINT
08
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
OUR BOARD MEMBERS
10
19
FINANCIAL STATEMENTS
20
MANAGEMENT DISCUSSION AND ANALYSIS
58
3
ANNUAL REPORT 2023 LETTER TO OUR
SHAREHOLDERS
Dear Fellow Shareholders,
Operations
As the self storage industry returned to its
Immigration continues to provide a solid
regular cadence in 2023, our business continued
tailwind for our business, even with the
to produce solid results. StorageVault acquired
substantial slowdown in housing transactions.
$94.6 million of assets in 2023, with another 3
After achieving a cumulative same store
acquisitions expected to be completed in the
NOI growth of 32.7% over the prior two
first half of 2024. We were again recognized
pandemic years, same store results were very
as one of the country’s most gender diverse
respectable with a 4.8% increase in revenues
companies and continue to support over
and 4.5% increase in NOI, and in line with our
250 charities and community organizations
long term objective of 4% to 6% average annual
throughout Canada. StorageVault has also
NOI growth. We have been very pleased with
been recognized as a Dividend Aristocrat after
the performance of our FlexSpace Logistics
5 years of consistent dividend increases. There
last mile solution platform and are excited to
have been many questions about interest
launch our MoveBuddy platform which will
rates and debt, but you can see from our
focus on Business-to-Consumer relationship.
Financial Statements that our Balance Sheet is
very healthy with 95% of our debt being fixed
Platform Strength and Scale
interest debt and our weighted average interest
We acquired 7 self storage locations and 2
rate remaining relatively flat at 4.8% compared
parcels of land (to expand an existing store) for
to 4.73% in 2022. We were more active on our
$94.6 million in 2023 and have announced 3
NCIB having accretively repurchased 4.4 million
additional acquisitions expected to close in the
shares at a cost of $21.6 million or $4.91 per
first half of 2024 for $35.5 million. Our bespoke
share in 2023 compared to issuing 4.9 million
acquisition pipeline continues to pay dividends
shares at a value of $31.3 million or $6.44 on
as we expect to complete $70 to $100 million of
acquisitions in 2022 and 2023.
acquisitions in 2024.
4
ANNUAL REPORT 2023 We expect that the $850 million of acquisitions
• Our paper
shredding and
recycling
completed over the last 4 years will provide
business, through our RecordXpress brand,
synergies, efficiencies and free cash flow growth
saved over 430,000 trees in 2023
for many years to come. While slower than we
would like, we continue to make progress on
the over 450,000 square feet of expansion
projects that are currently in development,
permitting and entitlement. These projects
will produce significant cash flows and create
substantial value going forward.
ESG
• Three time recipient of The Globe and
Mail’s Report on Business Women Lead
Here award
• Support of over 250 charities and
community programs across Canada
• The ongoing investment in our diverse
team continues to foster merit based
growth and advancement in all levels of our
StorageVault continues to be recognized for
organization, as well as tolerance, personal
having best-in-class ESG practices that focus
well being and safety
on long term sustainable environmental and
social responsibilities, which are consistent
with our sound governance policies. Some of
this year’s accomplishments are:
• Recognition as a Dividend Aristocrat
• The largest solar, motion sensor, LED lighting
and in floor radiant heating platform in the
Canadian storage industry
• Use of geothermal heating and cooling
systems - geothermal heating systems use
the earth as a heating and cooling source.
Geothermal heat pumps are among the
most energy-efficient
technologies
for
providing HVAC and water heating, using far
less energy than traditional systems
Thank you for your continued confidence and
support of our ever growing platform, we will
continue to grow cash flow and shareholder
value for many years to come.
Steven Scott
Chief Executive Officer
February 22, 2024
5
ANNUAL REPORT 2023 2023
HIGHLIGHTS
10.3%
REVENUE
10.0%
NOI
7.6%
AFFOPER SHARE
200
180
160
140
120
100
80
60
40
20
250
225
200
175
150
125
100
75
50
25
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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
)
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6
ANNUAL REPORT 2023
SQUARE
FOOTAGE
We grew to 11.8 million
sqft of rentable space in
103,000 storage units
ACQUISITIONS
$94.6 million
in acquisitions
completed in 2023
REVENUE
NOI
Revenue growth of 10.3%
to $288.7 million from
$261.8 million
NOI growth of 10.0%
to $193.6 million
from $176.0 million
OUTLOOK
Expecting
$70 - $100 million in
acquisitions in 2024
SHAREHOLDER
RETURN
1,066%
9 year total
shareholder return
7
ANNUAL REPORT 2023 OUR NATIONAL
FOOTPRINT
19
44
11
12
Brand Portfolio
122
28
7
8
9
240+ locations owned and managed
across Canada and growing!
ANNUAL REPORT 2023ANNUAL REPORT 2023 ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
10
ANNUAL REPORT 2023 At StorageVault, we consider environmental
sustainability, social
responsibility, and
commitment to strong corporate governance
practices as core values and the foundation
of what we do day-in and day-out. Our
ongoing efforts involve reducing the already
minimal environmental impact of our stores,
enhancing engagement with colleagues
and shareholders, supporting the over 100
communities in which we operate, and
upholding sound corporate governance
practices.
Together with our business
objectives, these core values ensure we
continuously deliver strong and sustainable
results for all stakeholders.
11
ANNUAL REPORT 2023 ENVIRONMENTAL
We hold the belief that sustainability and
We continually implement forward-thinking
success are intertwined, and to prosper as
energy-saving
initiatives, such as using
a business, we must contribute positively to
geothermal heating systems, rooftop solar
our communities. As a community based
panels, solar walls, motion-activated lighting
business, we recognize our responsibility to
systems, and the retrofitting of older fixtures
implement sustainable operating practices,
with modern, energy-efficient alternatives.
aiming to minimize our impact and preserve
Water usage at our properties is at very low
the environment while enhancing
the
levels. Furthermore, we source and sell packing
performance of our portfolio. Our objective
supplies made from recycled materials, and our
is to positively impact the environment, our
digital rental process has significantly reduced
communities, shareholders, the broader self
paper usage.
storage industry, and future generations.
The self storage industry has the lowest
In our commitment to energy conservation,
environmental impact for energy consumption,
we strategically offer a mix of square
water usage, and waste production when
footage,
including non-climate controlled
compared to all other real estate asset classes.
and
temperature-controlled
spaces. For
The storage industry has an inherently low
properties
with
temperature-controlled
environmental impact due to its minimal daily
storage, we regulate temperatures to ensure
activity levels compared to other commercial
the safety of stored contents while minimizing
properties dues to the limited daily client activity
energy consumption for heating or cooling.
and traffic which contribute to minimizing our
Non-climate-controlled areas have minimal
carbon footprint within our communities.
environmental effects. This not only reduces
our usage, but our expenses as well, benefiting
all stakeholders.
12
ANNUAL REPORT 2023 The self storage
industry has the lowest
environmental impact in
comparison to all the other
real estate asset classes
Energy
Consumption
(KWh/SqFt)
Water
Consumption
(L/SqFt)
Carbon
Emissions
(MT CO2E/SqFt)
Self Storage
Other
Real Estate Class*
81% less
89% less
79% less
Source: Urban Land Institute, Greenprint Performance Report, Volume 12
* Other property types include Industrial, Multifamily, Office and Retail
13
ANNUAL REPORT 2023 GREEN BUILDING
DESIGN &
CONSTRUCTION
PRACTICES
🌱 all new construction projects are
built using energy efficient windows
🌱 use of SolarWall systems or insulated
metal panels used in construction of
new and retrofitted buildings
🌱 replacing standard exterior storage
doors with energy efficient doors
🌱 insulated foundation walls to help
maintain and keep the foundation
slab warm
🌱 all proposed acquisitions are subject
to environmental site assessments
prior to the closing
ENERGY REDUCTION
& GENERATION
🌱 over 90% of all properties have
motion sensor lighting, allowing for
usage on-demand
🌱 80% of interior and 60% of exterior
lighting have been retrofitted with
LED lighting
🌱 automated and self-adjusting internal
thermostat temperature controls
🌱 use of geothermal heating and
cooling systems - geothermal heating
systems use the earth as a heating
and cooling source. Geothermal heat
pumps are among the most energy-
efficient technologies for providing
HVAC and water heating, using far
less energy than traditional systems
🌱 energy efficient HVAC systems
🌱 solar power generation using roof
top and solar walls
🌱 all new roofs installed or replaced
are reflective “cool” roofs that help
minimize energy consumption
🌱 use of in-floor radiant heating
14
ANNUAL REPORT 2023 WASTE REDUCTION
& RECYCLING
🌱 RecordXpress, our paper shredding
and recycling division, recycled over
9.89 million pounds of paper; saving
430,000 trees, diverting 96,000
cubic meters from
landfills and
pre-emptively eliminating 193,000
barrels of oil required to harvest the
raw product.
🌱 sale of moving and packaging
recycled
supplies made
from
materials
🌱 garbage and waste recycling at our
stores and corporate offices
🌱 digital rental process that reduces
paper usage through more efficient
technology options
🌱 electronic
e-waste
recycling
and
reduction
program
for decommissioned
computer
equipment that either donates
refurbished equipment to
local
charities or recycles equipment
that cannot be repurposed
WATER
REDUCTION &
CONSERVATION
🌱 one washroom per property, on
average, given low occupant levels
and client activity at our properties
🌱 low
flow and energy efficient
plumbing systems and appliances
🌱 low-water irrigation systems
🌱 landscaping using drought-tolerant
and native species
🌱 water run-off controls
🌱 storm water retention
15
ANNUAL REPORT 2023 SOCIAL
At StorageVault, our foremost commitment is to
support both our colleagues and the communities
• Change Committee – our self storage team
members have established a volunteer
in which we reside and operate. With over 800
committee that convenes monthly to offer
colleagues across more than 100 communities
feedback on presented topics or propose ideas
throughout Canada, we express gratitude for
that would benefit the organization. Some
the privilege of being a part of these diverse
successful ideas that have been implemented
locales. In 2023, we proudly supported over 250
include those related to health & safety,
community organizations; working together to
communications and training.
create meaningful and enduring impacts.
Engagement and Wellbeing
StorageVault
is dedicated to
fostering a
culture that prioritizes wellbeing, promotes
healthy practices, and supports work-life
balance. Central to our philosophy is a strong
belief in developing and retaining talented
people. We emphasize active engagement
from management at all
levels, fostering
connections between colleagues, clients, the
Board, and other stakeholders. Our conviction
is rooted in the belief that by prioritizing the
wellbeing of our colleagues, we enable our
team to reciprocate that care towards our
• Training and Career Development
- our
dedicated Corporate Training team has created
an industry leading program for our New
Hires. In addition to New Hire training, our
team hosts Monthly All-Store webinars and
offer specialized sessions for Store Managers
(teaching leadership, customer service and
wellness skills) as part of our Elite Academy
Sessions to support career development.
• We provide competitive health and insurance
benefits, employee assistance programs, paid
time off, and leave of absence and bereavement
support.
• Bonus opportunities are based on individual,
clients, our stores and our communities. 2023
store and corporate performance.
engagement and wellbeing highlights include:
• Wellness Wednesdays - a monthly webinar
for all our colleagues with topics including
finance, wellness, meditation, exercise,
mental health and hobbies.
• We organize
incentive programs such as
our Step Challenge, which encourages our
employees to meet step goals to help promote
a healthier lifestyle.
• Annual corporate events
including Family
Bowling, Pot-Luck Lunches and Christmas
parties.
16
ANNUAL REPORT 2023 Supporting our Communities
At StorageVault, we take great pride
in
fostering
long-term,
sustainable
relationships that make a difference year
over year. In 2023, our commitment to
Canadian communities was steadfast as
we aligned with not-for-profit agencies and
grassroots organizations to provide tangible
support for meaningful outcomes. With
emphasis placed on our five community
pillars: food security, healthcare, education,
sports, and the arts, we work intimately
with over 250 local, regional and national
partners to enhance their ability to support
communities. We strategically align and
leverage the power and influence of our
national partners, using their reach to
elevate our grassroots partners in need
which results in enhanced support.
As a Canadian company, our passion and
desire to be there for our colleagues, clients,
and communities has never been greater. We
are incredibly grateful to be able to support
our fellow Canadians from coast to coast.
17
ANNUAL REPORT 2023 GOVERNANCE
StorageVault’s Board and Management recognize the
importance of equality, diversity and is dedicated to
maintaining the highest governance standards, which
is exemplified through the following:
• Increased our Board of Directors from 5 to 6
members
- 66% of our directors are independent
• Diverse Board and Management team
- 50% Board Diversity (gender and race)
- 33% of our directors are female
- 52% of our senior management are female
• Annual Board review and vote to approve executive
compensation
- Code of Business Conduct (mandatory for all
employees)
- Disclosure and Confidentiality Policy
- Diversity Policy
- Insider Trading and Reporting Policy
- Majority Voting Policy
- Whistleblower Policy
For the third time, StorageVault has been recognized
by The Globe and Mail’s 2023 Report on Business
Women Lead Here. This annual editorial benchmark
identifies best-in-class gender diversity in corporate
Canada. This award recognizes and is representative
of StorageVault’s equity and inclusion that is organic
• Annual election of Directors by shareholders at
within our workplace across Canada.
StorageVault remains committed to supporting
and ensuring stability to safeguard the long-
term interests of all its stakeholders through our
disciplined corporate governance practices. In a
commitment to transparency and good governance
practices, StorageVault makes its corporate policies,
mandates, and charters publicly accessible on our
corporate website.
AGM
• Tri-annual approval of the Stock Option Plan by
shareholders at AGM
• Independent Director led Audit, Acquisition and
Governance, Nominating and Compensation
Committees
• Acquisition Committee Mandate to review, approve
and recommend transactions to the Board
• Regular review, update and reapproval by our
Board of all Corporate Governance mandates,
principles and policies:
- Charter of the Audit Committee
- Charter of the Board of Directors
- Charter of the Governance, Nominating and
Compensation Committee
18
ANNUAL REPORT 2023 OUR BOARD MEMBERS
In 1999, Ms. Fleming founded Storage For Your Life which was sold to the Corporation in September 2015. She
now serves the Corporation as a director and as a member of the Audit Committee, Acquisition Committee and
is the Chair of the Governance, Nominating and Compensation Committee. Ms. Fleming is the President and CEO
of CVL Investments Ltd., a private investment entity. Throughout her career, she has been continuously active
in private commercial real estate. She holds a Business Certificate from Capilano University received in 1991.
JAY
LYNNE
FLEMING
Director
Mr. Harris has more than 20 years of real estate investment and management experience. Mr. Harris is the
founder and CEO of Pinedale Capital Partners, a privately held investment management firm focused on
the acquisition, development and operation of industrial properties across the United States. Mr. Harris is a
graduate of Dalhousie University and the University of Kings College in Canada where he received joint Science
degrees in Economics. He also serves on the board of Rippowam Cisqua School in Bedford, NY and is on the
boards of Sonida Senior Living (NYSE:SNDA) and Outerspace Ops Inc.
BEN
HARRIS
Director
Chief Financial Officer of the Corporation. Mr. Khan is a Principal and Chief Financial Officer of The Access
Group of Companies focusing on the ownership, acquisition and development of storage, multi-residential
and commercial real estate in Canada, and prior to the internalization into the Corporation, President of
RecordXpress, a records management company. Mr. Khan is the Chief Executive Officer and a director of Parkit
Enterprise Inc. (TSX-V: PKT). He is also the Chairperson of the Canadian Self Storage Association Tax Committee.
IQBAL
KHAN
CFO & Director
Chair and Chief Executive Officer of the Corporation. Mr. Scott is currently a director and Audit Committee
Chair of Park Lawn Corporation (TSX: PLC). Mr. Scott is also a director and Chair of Parkit Enterprise Inc. (TSX-V:
PKT). Mr. Scott is a Principal and Chief Executive Officer of The Access Group of Companies focusing on the
ownership, acquisition and development of storage, multi-residential and commercial real estate in Canada. Mr.
Scott is also a Director and Treasurer of the Canadian Self Storage Association.
STEVEN
SCOTT
CEO & Director
In 2007, Mr. Simpson co-founded the Corporation and was President and Chief Executive Officer until April 2015.
He serves as a director and Acquisition Committee Chair. In 2000, Mr. Simpson co-founded Hospitality Network
Canada now operating as HealthHub Patient Engagement Solutions Inc. and was President and Chief Executive
Officer. Recently, Mr. Simpson co-founded Proton Capital Corp. (TSX-V: PTN.P), a capital pool corporation. Mr.
Simpson is also a member of the Saskatchewan Government House Board of Trustees.
AL
SIMPSON
Director
Ms. Vitug has over 30 years of capital markets experience, including 24 years at Scotiabank as a Managing
Director in Investment Banking and Equity Capital Markets. Ms. Vitug is a currently a member of the Board of
Trustees of Slate Grocery REIT and an independent member of the Private Capital Investment Committee of
Nicola Wealth. Ms. Vitug is a Chartered Professional Accountant, holds a BA in Economics from the University of
Toronto and a MBA from the Rotman School of Management.
MARY
VITUG
Director
19
ANNUAL REPORT 2023 FINANCIAL
STATEMENTS
20
ANNUAL REPORT 2023 StorageVault Canada Inc.
Financial Statements
For the Years Ended December 31, 2023 and 2022
21
ANNUAL REPORT 2023
LLP - Calgary - 112 - 4th Avenue SW
Independent Auditor's Report
To the Shareholders of StorageVault Canada Inc.:
Opinion
We have audited the financial statements of StorageVault Canada Inc. (the "Corporation"), which comprise the
statements of financial position as at December 31, 2023 and December 31, 2022, and the statements of income
(loss) and comprehensive income (loss), changes in equity and cash flows for the years then ended, and notes to the
financial statements, including a summary of material accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Corporation as at December 31, 2023 and December 31, 2022, and its financial performance and its cash flows for
the years then ended in accordance with International Financial Reporting Standards.
Basis for Opinion
We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Corporation in accordance with the ethical requirements that are
relevant to our audits of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
EEvvaalluuaattiioonn ooff tthhee aaccqquuiissiittiioonn ddaattee ffaaiirr vvaalluuee ffoorr pprrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt aanndd iinnttaannggiibbllee aasssseettss rreellaatteedd ttoo tthhee
ccuurrrreenntt yyeeaarr bbuussiinneessss aaccqquuiissiittiioonnss
Key Audit Matter Description
We draw attention to note 4 to the financial statements. Over the course of the year ended December 31, 2023, the
Corporation acquired 6 self-storage facilities and commercial properties. The Corporation recorded property, plant
and equipment (“PP&E”) of $88 million and intangible assets ("IA") of $4 million. These acquisitions have been
accounted for using the acquisition method.These acquisitions consisted of both arm's length and non-arm's length
transactions.
We identified the evaluation of the acquisition date fair value for PP&E and IA related to the business acquisitions as
a key audit matter. Significant auditor judgment was required to evaluate the results of our audit procedures
regarding the approach and significant assumptions with respect to the estimated acquisition date fair value of PP&E
and IA. In addition, specialized skills and knowledge were required in evaluating the results of our audit procedures.
MNP LLP
Suite 2000, 112 - 4th Avenue SW, Calgary AB, T2P 0H3
22
1.877.500.0792 T: 403.263.3385 F: 403.269.8450
MNP.ca
ANNUAL REPORT 2023 23
ANNUAL REPORT 2023 24
ANNUAL REPORT 2023 25
ANNUAL REPORT 2023 2023
2022
$
1,880,004,992
124,960,340
13,861,106
15,840,630
1,028,346
8,522,542
$
1,854,904,102
122,026,220
22,534,826
9,946,492
4,700,494
6,640,026
$
2,044,217,956
$
2,020,752,160
$
1,412,708,149
261,437,659
99,715,973
39,566,673
21,860,758
13,055,011
-
1,848,344,223
$
1,526,719,769
128,682,883
80,518,572
40,468,430
20,860,268
14,125,077
2,222,058
1,813,597,057
404,045,009
(29,035,979)
13,506,670
40,568,013
(233,209,980)
195,873,733
424,954,374
(24,741,001)
-
38,451,552
(231,509,822)
207,155,103
$
2,044,217,956
$
2,020,752,160
StorageVault Canada Inc.
Statement of Financial Position
As at December 31
Assets
Real estate and equipment, net (Note 5)
Goodwill and intangible assets, net (Note 6)
Cash and short term deposits
Prepaid expenses and other current assets
Unrealized fair value of derivative assets (Note 10)
Accounts receivable
Liabilities and Shareholders' Equity
Debt (Note 7)
Debentures (Note 8)
Lease liability (Note 15)
Deferred tax liability (Note 11)
Accounts payable and accrued liabilities
Unearned revenue
Unrealized fair value of derivative liabilities (Notes 7, 10)
Shareholders' Equity
Share capital (Note 9)
Dividends paid (Note 9)
Equity component of convertible debentures (Note 8)
Contributed surplus (Note 9)
Deficit
Commitments and Contingencies (Note 15)
Subsequent Events (Note 16)
The accompanying notes are an integral part of these financial statements.
Approved on behalf of the Board:
"signed" Steven Scott
Director
"signed" Iqbal Khan
Director
__________________________________________________________________________________________
26
ANNUAL REPORT 2023
StorageVault Canada Inc.
Statement of Changes in Equity
For the Years Ended December 31
Share Capital
Balance, beginning of the period
Common shares issued, net of issuance costs (Note 9)
Share options, RSU and DSU redemptions (Note 9)
Common shares repurchased (Note 9)
Balance, end of the period
Dividends Paid
Balance, beginning of the period
Dividends paid during the period (Note 9)
Balance, end of the period
Equity Component of Convertible Debentures
Balance, beginning of the period
Equity component of convertible debentures, net of deferred tax (Note 8)
Balance, end of the period
Contributed Surplus
Balance, beginning of the period
RSU and DSU redemptions (Note 9)
Stock based compensation (Note 9)
Balance, end of the period
Deficit
Balance, beginning of the period
Net loss and comprehensive loss
Balance, end of the period
The accompanying notes are an integral part of these financial statements.
2023
2022
$
424,954,374
5,691,790
(5,038,500)
(21,562,655)
404,045,009
$
406,565,894
28,829,905
184,139
(10,625,564)
424,954,374
(24,741,001)
(4,294,978)
(29,035,979)
(20,510,231)
(4,230,770)
(24,741,001)
-
13,506,670
13,506,670
38,451,552
(1,679,165)
3,795,626
40,568,013
-
-
-
26,418,718
(1,598,194)
13,631,028
38,451,552
(231,509,822)
(1,700,158)
(233,209,980)
$
(190,267,865)
(41,241,957)
(231,509,822)
$
__________________________________________________________________________________________
27
ANNUAL REPORT 2023
StorageVault Canada Inc.
Statement of Income (Loss) & Comprehensive Income (Loss)
For the Years Ended December 31
Revenue
Storage and related services
Management fees
Expenses
Operating costs
Depreciation and amortization (Notes 5,6)
Interest (Notes 7,15)
Selling, general and administrative
Acquisition and integration costs
Interest accretion on convertible debentures (Note 8)
Stock based compensation (Note 9)
Unrealized loss on derivative financial instruments (Note 7)
Realized gain on derivative financial instruments (Note 7)
Realized gain on real estate (Note 5)
Net loss and comprehensive loss before tax
Deferred tax recovery (Note 11)
Net loss and comprehensive loss after tax
Net loss per common share
Basic
Diluted
Weighted average number of common shares outstanding
Basic
Diluted
The accompanying notes are an integral part of these financial statements.
2023
2022
$
286,687,556
2,037,056
288,724,612
$
259,933,061
1,895,228
261,828,289
95,131,868
100,518,182
83,297,441
24,290,628
5,904,217
4,195,644
3,795,626
1,450,089
(3,994,356)
(15,528,115)
299,061,224
85,794,347
104,126,661
74,801,847
21,048,950
9,587,840
-
13,631,028
3,664,312
-
-
312,654,985
(10,336,612)
8,636,454
(1,700,158)
$
(50,826,696)
9,584,739
(41,241,957)
$
$
$
(0.005)
(0.004)
$
$
(0.109)
(0.105)
376,930,150
385,604,697
378,051,496
390,970,412
__________________________________________________________________________________________
28
ANNUAL REPORT 2023
StorageVault Canada Inc.
Statement of Cash Flows
For the Years Ended December 31
Cash from (used for) the following activities:
Operating activities
Net loss and comprehensive loss after tax
Adjustment for non-cash items:
Deferred tax recovery
Depreciation, amortization (Notes 5,6)
Amortization of deferred financing costs
Accretion of lease liabilities (Note 15)
Interest accretion on convertible debentures (Note 8)
Unrealized loss on derivative financial instruments (Note 7)
Stock based compensation (Note 9)
Realized gain on disposal of real estate and equipment (Note 5)
Cash flow from operations before non-cash working capital balances
Net change in non-cash working capital balances
Accounts receivable
Prepaid expenses and other current assets
Accounts payable and accrued liabilities
Unearned revenue
Cash flows from operating activities
Financing activities
Common shares issued, net of issuance costs (Note 9)
Dividends paid (Note 9)
Payments of lease liabilities (Note 15)
Debt issuance costs
Cash advances from long term debt (Note 7)
Cash repayment of long term debt (Note 7)
Cancellation of share options, RSUs/DSUs (Note 9)
Proceeds from derivative financial instruments
Proceeds from debenture issuance, net of issuance costs (Note 8)
Repurchase of common shares (Note 9)
Cash flows from financing activities
Investing activities
Cash additions to real estate and equipment (Note 5)
Cash paid in business combinations (Note 4)
Proceeds on disposal of real estate and equipment (Note 5)
Cash flows used for investing activities
Decrease in cash and short term deposits
Cash and short term deposits balance, beginning of period
Cash and short term deposits balance, end of period
The accompanying notes are an integral part of these financial statements.
2023
2022
$
(1,700,158)
$
(41,241,957)
(8,636,454)
100,518,182
2,762,685
3,668,569
4,195,644
(2,520,812)
3,795,626
(16,242,182)
85,841,100
(1,882,516)
(5,894,138)
1,000,490
(1,070,066)
77,994,870
20,059
(2,841,590)
(7,887,925)
(1,849,751)
286,760,989
(401,685,562)
(6,717,665)
3,970,902
143,990,089
(21,562,655)
(7,803,109)
(66,875,057)
(86,825,000)
74,834,576
(78,865,481)
(9,584,739)
104,126,661
2,919,741
3,035,180
-
3,664,312
13,631,028
(183,669)
76,366,557
(9,025,972)
(3,564,686)
2,352,553
1,181,477
67,309,929
448,659
(2,370,421)
(6,181,239)
(1,735,302)
610,341,010
(409,662,963)
(632,798)
-
-
(10,625,564)
179,581,382
(35,600,294)
(214,085,000)
185,209
(249,500,085)
(8,673,720)
(2,608,774)
22,534,826
25,143,600
$
13,861,106
$
22,534,826
__________________________________________________________________________________________
29
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
1. Description of Business
StorageVault Canada Inc. (the “Corporation”) is incorporated under the Business Corporations Act of Alberta and is
domiciled in Canada. Its shares are publicly traded on the Toronto Stock Exchange (“Exchange”). The address of its
registered office is 1000 – 250 2nd Street SW, Calgary, AB, T2P 0C1.
The Corporation’s primary business is owning, managing and renting self storage and portable storage space to individual
and commercial customers. The Corporation also stores, shreds, and manages documents and records for customers.
2. Basis of Presentation
These financial statements and the notes thereto present the Corporation’s financial results of operations and financial
position under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board (“IASB”) as at January 1, 2023. These financial statements as at and for the year ended December 31, 2023, were
authorized for issuance by the Board of Directors of the Corporation on February 22, 2024.
The financial statements have been prepared under the historical cost method, except for the revaluation of certain
financial assets and financial liabilities to fair value. The financial statements were prepared on a going concern basis, and
are presented in Canadian dollars, which is the Corporation’s functional currency.
3. Material Accounting Policies
Revenue Recognition
Revenue from the rendering of services and sale of goods is recognized at the fair value of consideration received or
receivable after the deduction of any trade discounts and excluding sales taxes.
The Corporation’s revenue comprises the renting of storage units to customers, information and records management,
managing storage facilities on behalf of third parties and sale of merchandise, including locks, boxes, packing supplies and
equipment.
Revenue earned from the renting of storage units is accounted for under IFRS 16 – Leases. Storage units are rented to
customers pursuant to rental agreements which provide for weekly or monthly rental terms with non-refundable rental
payments. The rental agreements may be terminated by the customer without further obligation or cost upon vacating
the storage unit. Revenue from rental agreements is recognized over the rental term pursuant to the rental agreement.
Non-refundable customer deposits, which are received to hold a unit for rent at a future date, are deferred and recognized
as revenue upon commencement of the rental agreement. Receipts of rental fees for future periods are deferred and
recognized as revenue when each respective monthly period commences.
The Corporation earns a management fee based on a percentage of gross revenues of the operations for managing
storage facilities for third parties. Revenue is recognized over time when the services are rendered.
Revenue for other storage related services is recognized in the month the respective services are provided. Receipts of
fees for other storage related services for future periods are deferred and recognized as revenue when each respective
monthly period commences. A provision is made for expected credit losses.
Revenue from the sale of merchandise, including locks, boxes, packing supplies and equipment, is recognized at the point
in time when the merchandise is delivered to the customer.
Business Combinations
All business combinations are accounted for by applying the acquisition method. Upon acquisition, the assets (including
intangible assets), liabilities and contingent liabilities acquired are measured at their fair value. The Corporation
30
Notes: 1
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
recognizes intangible assets as part of business combinations at fair value at the date of acquisition. The determination
of these fair values is based upon management’s judgment and includes assumptions on the timing and amount of future
cash flows generated by the assets acquired and the selection of an appropriate discount rate. Acquisition and integration
costs are recognized in profit or loss as incurred.
Goodwill represents the excess of the identifiable cost of an acquisition over the fair value of the Corporation's share of
the net assets acquired at the date of acquisition. If the identifiable cost of acquisition is less than the fair value of the
Corporation's share of the net assets acquired (i.e. a discount on acquisition) the difference is credited to the Statement
of Income (Loss) and Comprehensive Income (Loss) in the period of acquisition. At the acquisition date, goodwill acquired
is recognized as an asset and allocated to each cash-generating unit (“CGU”) expected to benefit from the business
combination’s synergies, and to the lowest level at which management monitors the goodwill.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Corporation reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted retrospectively during the measurement period, or additional assets or liabilities
are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognized as of that date. The measurement period is the period from
the date of acquisition to the date the Corporation obtains complete information about facts and circumstances that
existed as of the acquisition date, up to a maximum of one year.
Joint operations will be recognized and measured in accordance with IFRS 11 - Joint Arrangements. Under this standard,
the Corporation will recognize its interest in the joint operation using the proportionate consolidation method. This
involves recognizing the assets, liabilities, revenues, and expenses of the joint operation in proportion to the Corporation's
share of ownership in the operation.
Cash and Short Term Deposits
Cash and short term deposits on the Statement of Financial Position are comprised of cash at bank and on hand, and
short term, highly liquid deposits with an original maturity of three months or less. For the purpose of the Statement of
Cash Flows, cash and short term deposits are defined as above, net of outstanding bank overdrafts, except where no right
of set-off exists.
Real Estate and Equipment
Real estate and equipment are stated at historical cost less accumulated depreciation and any impairment in value.
Historical cost includes expenditures that are directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Corporation and the cost of the item
can be measured reliably. The carrying amount of a replaced part is derecognized. All other repairs and maintenance are
charged to the Statement of Income (Loss) and Comprehensive Income (Loss) during the financial period in which they
are incurred.
Once an asset is available for use in the location and condition intended by management, it is depreciated to its residual
value using the appropriate depreciation rate set forth by management. Land is not depreciated.
Depreciation is calculated using the declining balance method to depreciate the cost of real estate and equipment to their
residual values over their estimated useful lives, as follows:
Notes: 2
31
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
Land, Yards, Buildings & Improvements -
Buildings
Leasehold improvements
Business operating equipment
Fences and parking lots
Storage Containers -
Storage containers
4%
20%
10%
8%
10%
Vehicles -
Vehicles
Truck decks and cranes
30% to 40%
20%
Office and Computer Equipment -
Furniture and equipment
Computer equipment
20%
45%
The residual value and useful lives of real estate and equipment are reviewed, and adjusted if appropriate, at each
Statement of Financial Position date. An asset’s carrying value is written down to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. These impairment losses are recognized in the
Statement of Income (Loss) and Comprehensive Income (Loss). Following the recognition of an impairment loss, the
depreciation charge applicable to the asset is adjusted prospectively in order to systematically allocate the revised
carrying amount, net of any residual value, over the remaining useful life.
Goodwill and Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets and liabilities
acquired at the date of acquisition. Goodwill is carried at cost less accumulated impairment losses.
Finite life intangible assets are carried at cost less accumulated amortization and accumulated impairment losses.
Amortization begins when an asset is available for use and is calculated on a straight-line basis to allocate the cost of
assets over their estimated useful lives as follows: Tenant Relationships – 22 to 180 months, Websites – 3 years,
Trademarks – 10 years.
Indefinite life intangible assets, consisting of management contracts, are carried at cost and are not amortized. The useful
lives of indefinite life intangible assets are reviewed at each Statement of Financial Position date.
Goodwill and indefinite life intangibles are reviewed for impairment annually by assessing the recoverable amount of
each CGU to which it relates. The recoverable amount is the higher of fair value less costs of disposal, and value in use.
When the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognized. Any
impairment is recognized immediately in the Statement of Income (Loss) and Comprehensive Income (Loss). Any
impairment recognized on goodwill is not subsequently reversed.
Income Taxes
Income tax is comprised of current tax and deferred tax. Income tax is recognized in the Statement of Income (Loss) and
Comprehensive Income (Loss) except to the extent that it relates to items recognized directly in equity, in which case it is
recognized in equity.
Current tax is the tax expected to be payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the liability method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred
32
Notes: 3
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes
levied by the same tax authority on the same taxable entity, or on different taxable entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.
Stock Based Compensation
The fair value of stock options issued to directors, officers and consultants under the Corporation’s stock option plan is
estimated at the date of issue using the Black-Scholes option pricing model and charged to the Statement of Income (Loss)
and Comprehensive Income (Loss) and contributed surplus. Each tranche in an award is considered a separate award with
its own vesting period and grant date fair value. On the exercise of options, the cash consideration received and the fair
value of the option previously credited to contributed surplus are credited to share capital.
The fair value of options issued to advisors in conjunction with financing transactions is estimated at the date of issue
using the fair value of the goods and services received first, if determinable, then by the Black-Scholes option pricing
model, and charged to share capital and contributed surplus over the vesting period. On the exercise of agent options,
the cash consideration received and the fair value of the option previously credited to contributed surplus are credited
to share capital.
When stock options are cancelled, it is treated as if the stock options had vested on the date of cancellation and any
expense not yet recognized for the award is recognized immediately. However, if a new option is substituted for the
cancelled option and is designated as a replacement option on the date that it is granted, the cancelled and the new
options are treated as if they were a modification of the original option.
Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes
in these assumptions can materially affect the fair value estimate, therefore, the existing models do not necessarily
provide a reliable single measure of the fair value of the Corporation’s share purchase options. Forfeitures are estimated
for each reporting period and adjusted as required to reflect actual forfeitures that have occurred in the period.
Income (Loss) per Share
Basic income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing the net income
by the weighted average number of shares outstanding as adjusted for the potential dilution that would occur if
outstanding stock options, subordinated debentures, preferred shares or other potentially dilutive financial instruments
were exercised or converted to common shares. The weighted average number of diluted shares is calculated in
accordance with the treasury stock method. The treasury stock method assumes that the proceeds received from the
exercise of all potentially dilutive instruments are used to repurchase common shares at the average market price.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are shown in
equity as a deduction from the proceeds received.
Notes: 4
33
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
Segment Reporting
An operating segment is a component of the Corporation that engages in business activities from which it may earn
revenues and incur expenses. All operating segments’ operating results are reviewed regularly by the Corporation’s CEO
and/or CFO in order to make decisions regarding the allocation of resources to the segment. Segment results include
items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Financial Instruments
a) Financial assets - Pursuant to IFRS 9, the classification of financial assets is based on the Corporation’s assessment of
its business model for holding financial assets. The classification categories are as follows:
-
-
-
Financial assets measured at amortized cost: assets that are held within a business model whose
objective is to hold assets to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. The Corporation classifies the following financial assets as measured at amortized cost:
cash and short term deposits, and accounts receivable.
Financial assets at fair value through other comprehensive income: assets that are held within a
business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets, and its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. The Corporation has no
financial assets classified in this category.
Financial assets at fair value through profit or loss: assets that do not meet the criteria for amortized
cost or fair value through other comprehensive income. The Corporation classifies its total return swaps
as financial assets at fair value through profit or loss.
Financial assets measured at amortized cost are measured at cost using the effective interest method. When
assessing impairment of financial assets measured at amortized cost, the Corporation applied the simplified
approach and has calculated expected credit losses based on lifetime expected credit losses. Under the simplified
method the Corporation uses a provision matrix to calculate expected credit losses for accounts receivable which is
based on the Corporation’s historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment. Loss allowances for financial assets measured at amortized cost are
deducted from the gross carrying amounts of the assets and the loss is recognized in the Statement of Income (Loss)
and Comprehensive Income (Loss). When a trade receivable is uncollectible, it is written off against the allowance
for expected credit losses.
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or
when the contractual rights to those assets are transferred.
b) Financial liabilities - The classification of financial liabilities is determined by the Corporation at initial recognition.
The classification categories are as follows:
-
-
Financial liabilities measured at amortized cost: financial liabilities initially measured at fair value less
directly attributable transaction costs are subsequently measured at amortized cost using the effective
interest method. Interest expense is recognized in the Statement of Income (Loss) and Comprehensive
Income (Loss). The Corporation classifies the following financial liabilities as measured at amortized
cost: certain debt facilities, and accounts payable and accrued liabilities.
Financial liabilities measured at fair value through profit or loss: financial liabilities measured at fair
value with changes in fair value and interest expense recognized in the Statement of Income (Loss) and
Comprehensive Income (Loss). The Corporation classifies the following financial liabilities as measured
at fair value: certain debt facilities and interest rate swaps.
34
Notes: 5
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
Financial liabilities are derecognized when the obligation is discharged, cancelled or expired.
Debentures
When a contract contains an embedded derivative, the economic and risk characteristics of both the embedded derivative
and host contract are analyzed to understand whether or not they are closely related and to decide whether the
embedded derivative should be accounted for separately from the host contract.
The embedded features in the financial instrument issued by the Corporation are identified at inception. Each feature is
evaluated separately and classified either as part of the host liability, as a separate embedded liability or as an equity
instrument in accordance with the substance of the contractual arrangement.
Significant Accounting Estimates and Judgments
The preparation of the financial statements requires management to make judgments, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income, and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year include, but are not necessarily limited to:
-
-
-
-
-
Real estate and equipment - The Corporation determines the carrying value of its real estate and equipment
based on policies that incorporate estimates, assumptions, and judgments relative to the useful lives and
residual values of the assets.
Impairment of non-financial assets - Impairment exists when the carrying value of an asset or CGU exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value
less costs of disposal calculation is based on available data from binding sales transactions in an arm’s length
transaction of similar assets or observable market prices less incremental costs for the disposal of the asset. The
value in use calculation is based on a discounted cash flow model. The estimated future cash flows are derived
from management estimates, budgets, and past performance, and do not include activities to which the
Corporation is not yet committed or significant future investments that will enhance the asset’s performance in
the CGU being tested. The recoverable amount is sensitive to the discount rate used for the discounted cash
flow model as well as the expected future cash flows and the growth rate used for extrapolation purposes.
Purchase price allocations - Estimates are made in determining the fair value of assets and liabilities, including
the valuation of separately identifiable intangibles acquired as part of a business combination. These estimates
may be further based on management’s best assessment of the related inputs used in valuation models, such
as future cash flows and discount rates.
Income taxes - Income taxes are subject to measurement uncertainty due to the possibility of changes in tax
legislation or changes in the characterization of income sources.
Stock based compensation - Compensation costs accrued for stock based compensation plans are subject to the
estimation of the ultimate payout using pricing models such as the Black-Scholes model which is based on
significant assumptions such as volatility, dividend yield and expected term.
Notes: 6
35
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 3 – Continued
Management judgments that may affect reported amounts of assets and liabilities, income and expenses include but are
not necessarily limited to:
-
-
For the purpose of assessing impairment of tangible and intangible assets, assets are grouped at the lowest level
of separately identified cash inflows which make up the CGU. Determination of what constitutes a CGU is subject
to management’s judgment. Management has identified each location as a separate CGU. The asset composition
of the CGU can directly impact the recoverability of the assets included within the CGU.
The determination of which entities require consolidation is subject to management’s judgment regarding levels
of control, assumptions of risk and other factors that may ultimately include or exclude an entity from the
classification of a subsidiary or other entity requiring consolidation. For the purpose of recording asset
acquisitions, management must exercise judgment to determine if the acquisition meets the definition of a
business. Such determinations may affect the recorded amounts of specific assets and liabilities, goodwill and/or
transaction costs.
- Management has applied judgment in assessing that the management contracts acquired have an indefinite
useful life because the Corporation purchased a complete system to operationally manage its own business and
that of other self storage businesses. The Corporation has acquired substantial know-how and expertise in
managing stores owned by third parties, including long term relationships, of which the Corporation will have
the benefit for an indefinite period of time. The management contracts have therefore been deemed to have
an indefinite useful life.
36
Notes: 7
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
4. Acquisitions
During the year ended December 31, 2023, the Corporation completed the below transactions that met the definition of
a business under IFRS 3 - Business Combinations. These acquisitions have been accounted for using the acquisition
method with the results of the operations being included in the financial statements of the Corporation since the date of
acquisition. Details of the acquisitions are:
First Quarter Acquisition:
During the first quarter, the Corporation completed the acquisition of an adjacent commercial property for $7,400,000
(subject to customary adjustments). This acquisition was an arm’s length transaction. The purchase was paid for by
advances from debt, the issuance of common shares and cash on hand.
A summary of the acquisition is as follows:
Acquisition date:
Adjacent
Commercial
Property
March 29, 2023
Land, Yards, Buildings & Improvements
$
7,400,000
Deferred tax
Goodwill
Net assets acquired
Consideration paid for the net assets acquired was obtained from the following:
Issuance of common shares
Cash
Debt
Selected information for the acquisition, since its acquisition date:
Revenue
Operating costs
Amortization
Interest
Net income (loss)
(1,408,086)
1,408,086
7,400,000
2,000,000
1,402,519
3,997,481
7,400,000
275,884
-
275,884
169,511
120,502
(14,129)
$
Notes: 8
37
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 4 – Continued
Second Quarter Acquisitions:
During the second quarter, the Corporation completed the acquisitions of two self storage locations and one adjacent
commercial property for $22,725,000 (subject to customary adjustments). These acquisitions consisted of both arm’s
length and non-arm’s length transactions. The purchases were paid for by the issuance of common shares and cash on
hand.
A summary of the acquisitions are as follows:
One Self Storage
One Self Storage
Commercial
Location
Location
Property
Total
Adjacent
Acquisition date:
May 18, 2023
May 31, 2023
June 1, 2023
Land, Yards, Buildings & Improvements
Tenant Relationships
Net assets acquired
$
11,118,055
2,131,945
13,250,000
$
1,142,783
282,217
1,425,000
$
8,050,000
-
8,050,000
$
20,310,838
2,414,162
22,725,000
Consideration paid for the net assets acquired was obtained from the following:
Issuance of common shares
Cash
2,250,000
11,000,000
13,250,000
-
1,425,000
1,425,000
-
8,050,000
8,050,000
2,250,000
20,475,000
22,725,000
Selected information for the acquisitions, since their acquisition date:
Revenue
Operating costs
Amortization
Net income (loss)
974,705
336,640
638,065
730,417
(92,352)
$
120,764
35,578
85,186
84,950
236
$
335,674
8,684
326,990
125,301
201,689
$
1,431,143
380,902
1,050,241
940,668
109,573
$
38
Notes: 9
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 4 – Continued
Fourth Quarter Acquisitions:
During the fourth quarter, the Corporation completed the acquisitions of two self storage locations for $60,950,000
(subject to customary adjustments). These acquisitions consisted of both arm’s length and non-arm’s length transactions.
The purchases were paid for by advances from debt and cash on hand.
A summary of the acquisitions are as follows:
One Self Storage
One Self Storage
Location
Location
Total
Acquisition date:
November 29, 2023
December 21, 2023
Land, Yards, Buildings & Improvements
Tenant Relationships
Deferred tax
Goodwill
Net assets acquired
$
47,089,929
360,071
47,450,000
-
-
47,450,000
$
12,730,332
769,668
13,500,000
(1,588,278)
1,588,278
13,500,000
$
59,820,261
1,129,739
60,950,000
(1,588,278)
1,588,278
60,950,000
Consideration paid for the net assets acquired was obtained from the following:
Cash
Debt
22,950,000
24,500,000
47,450,000
13,500,000
-
13,500,000
36,450,000
24,500,000
60,950,000
Selected information for the acquisitions, since their acquisition date:
Revenue
Operating costs
Amortization
Interest
Net income (loss)
207,097
82,435
124,662
195,442
187,833
(258,613)
$
86,551
1,686
84,865
27,394
-
57,471
$
293,648
84,121
209,527
222,836
187,833
(201,142)
$
Notes: 10
39
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
5. Real Estate and Equipment
Land, Yards,
Buildings &
Improvements
Storage
Containers
Intangible
Tenant
Relationships
Vehicles
Office &
Computer
Equipment
Total
COST
December 31, 2021
Additions
Disposals
Business acquisitions
December 31, 2022
Additions
Disposals
$
1,844,956,787
32,526,371
(124,645)
216,524,501
2,093,883,014
80,258,751
(57,670,257)
$
19,671,492
2,215,261
(84,180)
-
21,802,573
2,779,957
(145,898)
$
179,653,935
-
-
21,119,813
200,773,748
-
(5,573,217)
$
6,085,558
2,679,712
(197,690)
-
8,567,580
1,640,040
(108,583)
$
9,009,177
3,665,779
(28,625)
-
12,646,331
4,842,352
(79,113)
$
2,059,376,949
41,087,123
(435,140)
237,644,314
2,337,673,246
89,521,100
(63,577,068)
Business acquisitions
December 31, 2023
87,531,099
2,204,002,607
$
-
$
24,436,632
3,543,901
198,744,432
$
-
-
$
10,099,037
$
17,409,570
91,075,000
2,454,692,278
$
ACCUMULATED DEPRECIATION
$
December 31, 2021
Depreciation
Disposals
December 31, 2022
Depreciation
Disposals
December 31, 2023
NET BOOK VALUE
December 31, 2022
December 31, 2023
236,832,170
76,249,193
(21,224)
313,060,139
76,236,725
(4,889,168)
384,407,696
$
8,976,624
1,102,639
(44,216)
10,035,047
1,277,429
(102,105)
11,210,371
$
124,835,884
24,564,623
-
149,400,507
19,398,207
(3,434,573)
165,364,141
$
$
$
4,563,139
739,120
(182,351)
5,119,908
1,608,036
(92,206)
6,635,738
3,704,344
1,449,337
(138)
5,153,543
1,929,917
(14,120)
7,069,340
$
$
$
$
$
$
378,912,161
104,104,912
(247,929)
482,769,144
100,450,314
(8,532,172)
574,687,286
1,780,822,875
1,819,594,911
11,767,526
13,226,261
51,373,241
33,380,291
3,447,672
3,463,299
7,492,788
10,340,230
1,854,904,102
1,880,004,992
Included in Land, Yards, Buildings & Improvements is Land at a carrying value of $655,859,597 (December 31, 2022 -
$660,211,893).
Included in Land, Yards, Buildings & Improvements is $32,051,720 (December 31, 2022 - $31,812,900) of construction in
process that is not being depreciated.
Included in Land, Yards, Buildings & Improvements are right-of-use assets at a carrying value of $92,781,005 (December
31, 2022 - $75,282,052), net of accumulated depreciation of $16,343,082 (December 31, 2022 - $10,425,278). The
continuity of the right-of-use assets is as follows:
Self Storage Properties
Balance, December 31, 2021
Additions
Depreciation charge for the period
Balance, December 31, 2022
Additions and reassessments
Depreciation charge for the period
Balance, December 31, 2023
$
$
$
73,478,491
6,356,372
(4,552,811)
75,282,052
23,416,757
(5,917,804)
92,781,005
During the year, the corporation recognized a gain of $15,528,115 on the disposal of real estate and business related to
an expropriation by a government agency.
40
Notes: 11
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
6. Goodwill and Intangible Assets
Goodw ill
Managem ent
Contracts
$
97,527,924
$
16,300,000
Tradem arks
Website
Total
$
$
COST
December 31, 2021
Additions
Business acquisitions
December 31, 2022
Additions
Business acquisitions
December 31, 2023
-
7,792,271
105,320,195
-
2,996,364
108,316,559
$
-
-
16,300,000
-
-
$
54,880
6,080
326,868
387,828
1,091
-
$
16,300,000
$
388,919
$
$
ACCUMULATED AMORTIZATION
December 31, 2021
$
$
$
-
$
-
-
-
$
-
-
$
-
-
-
$
-
4,302
6,949
11,251
38,291
49,542
$
$
$
66,371
-
-
66,371
4,533
-
70,904
22,123
14,800
36,923
29,577
66,500
113,949,175
6,080
8,119,139
122,074,394
5,624
2,996,364
125,076,382
26,425
21,749
48,174
67,868
116,042
Amortization
December 31, 2022
Amortization
December 31, 2023
NET BOOK VALUE
December 31, 2022
December 31, 2023
105,320,195
108,316,559
16,300,000
16,300,000
376,577
339,377
29,448
4,404
122,026,220
124,960,340
At December 31, 2023, the Corporation performed its annual impairment test on goodwill and its indefinite life intangible
assets. Goodwill is allocated to the group of CGUs that benefited from the synergies of the business combination on which
the goodwill arose. The Corporation used the fair value less costs of disposal method to determine the recoverable
amount of the CGUs. Based on the impairment test performed, the Corporation concluded that no impairment exists on
its goodwill and indefinite life intangible assets.
Information regarding each impairment test is as follows:
Manitoba and Saskatchewan group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 2% which is consistent with management’s knowledge of the local market and
is lower than the CGUs recent historical growth rate.
Cash flows were discounted at a pre-tax rate of 5.18% based on management’s judgement in this geographic
region.
Kamloops, BC group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 3%. The Corporation has seven stores in the region and is able to distribute
costs and operate more efficiently.
Cash flows were discounted at a pre-tax rate of 6.83% based on management’s experience in this geographic
region and the fact that the properties are on leased land.
London, ON group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the property, with a net
operating income growth rate of 2% which is consistent with management’s knowledge of the local market.
Cash flows were discounted at a pre-tax rate of 5.05% based on management’s experience in this geographic
region.
Notes: 12
41
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 6 – Continued
Sentinel Self-Storage group of CGUs
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 3.75%.
- Given the location of the stores in this portfolio, over 20 stores in major markets and highly desirable locations
in Canada, management believes that this growth rate is sustainable, and is consistent with the CGUs historical
growth rate.
Cash flows were discounted at a pre-tax rate of 4.61% based on management’s experience and the superior
quality and location of these properties.
-
Portable Storage group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of storage containers, with a net
operating income growth rate of 3% based on management’s experience and the exclusive marketing channels
the Corporation has for this product type.
Cash flows were discounted at a pre-tax rate of 6.64% based on management’s experience in these markets.
Real Storage group of CGUs
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 4%.
- Given the location of the 38 stores in this portfolio and with the Corporation already operating in many of the
-
markets in which these stores are located, management believes that this growth rate is sustainable.
Cash flows were discounted at a pre-tax rate of 4.89% based on management’s experience and location of these
properties.
Management Division CGU
-
-
The cash flow projection includes specific estimates for five years with a terminal growth rate of 4%, which
management feels would be representative of the future indefinite cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 20% based on what management deemed appropriate for the
nature of this type of revenue stream.
RecordXpress Division CGU
-
-
The cash flow projection includes specific estimates for five years with a growth rate of 2%, which management
feels would be representative of the future cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 7.50% based on management’s experience in the records
management business.
Toronto - Danforth CGU
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 10% during the first four years and 5% thereafter, which is consistent with
management’s knowledge of the local market.
Cash flows were discounted at a pre-tax rate of 4.76% based on management’s experience in this geographic
region.
Shredding Division CGU
-
-
The cash flow projection includes specific estimates for five years with a growth rate of 2%, which management
feels would be representative of the future cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 9.20% based on management’s experience in the records
management business.
42
Notes: 13
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 6 – Continued
Dartmouth, NS CGU
- Goodwill on this CGU arose as a result of a deferred tax liability recorded on acquisition, therefore an
impairment test was not performed this period.
Quebec City, QC CGU
- Goodwill on this CGU arose as a result of a deferred tax liability recorded on acquisition, therefore an
impairment test was not performed this period.
The most sensitive inputs to the value in use model used for these groups of CGUs are the growth rate and the discount
rate:
-
-
A 1% increase or decrease in the growth rate would not result in an impairment of these groups of CGUs.
A 1% increase or decrease in the discount rate would not result in an impairment of these groups of CGUs.
Group of CGUs
Goodwill
Carrying Value
Goodwill
Carrying Value
Manitoba and Saskatchewan
$
2,621,716
$
26,465,066
$
2,621,716
$
27,238,439
December 31, 2023
December 31, 2022
Kamloops, BC
London, ON
Sentinel Self-Storage
Portable Storage
Real Storage
Management Division
RecordXpress Division
Toronto - Danforth
Shredding Division
Dartmouth, NS
Quebec City, QC
76,470
142,807
52,442,159
2,578,968
33,622,150
3,364,706
2,678,948
3,659,608
4,132,663
1,408,086
1,588,278
5,747,765
1,915,298
358,579,285
17,392,211
207,142,717
19,364,705
10,527,788
48,905,727
7,168,187
9,043,455
15,060,884
76,470
142,807
52,442,159
2,578,968
33,622,150
3,364,706
2,678,948
3,659,608
4,132,663
-
-
6,029,878
1,967,836
358,530,620
15,649,269
206,517,809
19,364,705
18,034,988
43,335,304
8,250,000
-
-
$
108,316,559
$
727,313,088
$
105,320,195
$
704,918,848
Notes: 14
43
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
7. Debt
Mortgages
At amortized cost - Fixed
December 31, 2023
Weighted
Average
Rate
Range
Balance
December 31, 2022
Weighted
Average
Rate
Range
Balance
2.84% to 9.20%
Maturity: Mar 2025 to Dec 2029
5.13%
306,666,120
2.84% to 4.98% 4.48%
Maturity: Apr 2023 to Dec 2029
251,048,897
At amortized cost - Variable
7.47% to 8.20%
7.56%
Maturity: Jan 2024 to Jul 2024
26,490,427
7.45% to 8.60% 8.08%
Maturity: Feb 2023 to Jul 2024
84,653,250
At FVTPL - Variable
- Fixed via interest rate swap
747,907,274
(15,112,904)
732,794,370
4.74%
783,891,417
(32,836,542)
751,054,875
4.31%
Maturity: Apr 2024 to Jan 2031
Maturity: Jan 2024 to Jan 2031
4.92%
1,065,950,917
4.65%
1,086,757,022
Lines of Credit and Promissory Notes
At amortized cost - Fixed
Maturity: Mar 2025
Maturity: Dec 2023
4.50%
500,000
3.50%
4,000,000
At amortized cost - Variable
7.73%
50,000,000
7.28%
140,618,468
Maturity: Dec 2024 to Feb 2025
Maturity: Jun 2023 to Oct 2025
At FVTPL - Variable
- Fixed via interest rate swap
308,871,737
(8,871,737)
300,000,000
3.88%
314,288,134
(14,288,134)
300,000,000
3.88%
Maturity: Feb 2025
Maturity: Feb 2025
4.43%
350,500,000
4.95%
444,618,468
Deferred financing costs, net of accretion
(3,742,768)
(4,655,721)
4.80%
1,412,708,149
4.73%
1,526,719,769
Reconciliation of Debt
The following table reconciles the changes in cash flows from financing activities for the Corporation's debt:
Debt, beginning of period
$
1,526,719,769
$
1,332,474,745
December 31, 2023
December 31, 2022
Advances from debt
Repayment of debt
Amounts offset against accounts receivable
Change in fair value of debt measured at FVTPL
Change in fair value of interest rate swaps
Total cash flow from debt financing activities
Change in deferred financing costs
286,760,989
(401,685,562)
-
23,140,035
(23,140,035)
(114,924,573)
912,953
610,341,010
(409,662,963)
(6,486,464)
(60,949,884)
60,949,884
194,191,583
53,441
Debt, end of period
$
1,412,708,149
$
1,526,719,769
44
Notes: 15
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 7 – Continued
The bank prime rate at December 31, 2023 was 7.20% (December 31, 2022 – 6.45%).
Mortgages are secured by a first mortgage charge on the real estate and equipment of the Corporation, general security
agreements covering all assets of the Corporation, general assignment of rents and leases, and assignments of insurance
coverage over all assets of the Corporation. The Corporation must maintain certain financial ratios to comply with the
facilities. These covenants include debt service coverage ratios, a fixed charge coverage ratio, a tangible net worth ratio,
and a loan to value ratio. As of December 31, 2023, the Corporation is in compliance with all covenants.
The deferred financing costs consist of fees and costs incurred to obtain the related mortgage financing, less accumulated
amortization.
Principal repayments on mortgages, lines of credit, and promissory notes in each of the next five years are estimated as
follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
$
$
$
$
$
$
448,302,885 (includes lines of credit and promissory note of $350.0 million)
178,944,623
45,300,549
152,308,388
387,200,322
204,394,150
The Corporation entered into interest rate swap contracts in order to fix the interest rate on $1 billion of debt at a
weighted average rate of 4.49%. On $447 million of this debt, the bank entered into interest rate swap cancellation
agreements, allowing them to cancel the original swap agreements between April 8, 2024 and October 27, 2025.
At December 31, 2023, the Corporation recognized a derivative liability of $nil (December 31, 2022 – $2.2 million). During
the year ended December 31, 2023, the Corporation recognized an unrealized loss on derivative financial instruments of
$1.5 million (December 31, 2022 – $3.7 million loss) and a realized gain on derivative financial instruments of $4.0 million
(December 31, 2022 – $nil). These derivative financial instruments mature between April 2024 and January 2031.
8. Debentures
2020 Hybrid Debentures
On July 20, 2020, $75 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture with
a term of sixty-six months, due January 31, 2026. These debentures bear a fixed interest rate of 5.75% per annum, payable
semi-annually in arrears on January 31 and July 31 of each year, commencing January 31, 2021. The intended use of the
net proceeds of the debentures is to pay down the credit facility and fund anticipated capital expenditures.
On and after January 31, 2024 and prior to January 31, 2025, the debentures will be redeemable in whole or in part from
time to time at the Corporation’s option at a redemption price equal to 102.875% of the principal amount of the
debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and
after January 31, 2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time
to time at the Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set for
redemption.
On redemption or at maturity on January 31, 2026, the Corporation may elect to, in whole or part, convert the debentures
into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000 due, that
number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date fixed for
redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
Notes: 16
45
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 8 – Continued
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $75 million net
of deferred financing costs of $3.5 million. Each embedded feature was evaluated separately and it was determined that
the economic and risk characteristics are closely related to the host contract and therefore were not accounted for as
separate financial instruments.
2021 Hybrid Debentures
On July 19, 2021, $57.5 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture
with a term of sixty-six months, due September 30, 2026. These debentures bear a fixed interest rate of 5.5% per annum,
payable semi-annually in arrears on March 31 and September 30 of each year, commencing September 30, 2021. The
intended use of the net proceeds of the debentures is to fund potential future opportunities and for general corporate
purposes.
On and after September 30, 2024 and prior to September 30, 2025, the debentures will be redeemable in whole or in part
from time to time at the Corporation’s option at a redemption price equal to 102.750% of the principal amount of the
debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and
after September 30, 2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from
time to time at the Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set
for redemption.
On redemption or at maturity on September 30, 2026, the Corporation may elect to, in whole or part, convert the
debentures into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000
due, that number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date
fixed for redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $57.5 million
net of deferred financing costs of $2.5 million. Each embedded feature was evaluated separately and it was determined
that the economic and risk characteristics are closely related to the host contract and therefore were not accounted for
as separate financial instruments.
2023 Convertible Debentures
On January 9, 2023, $150 million of convertible senior unsecured debentures were issued at a price of $1,000 per
debenture with a term of sixty-six months, due March 31, 2028. These debentures bear a fixed interest rate of 5% per
annum, payable semi-annually in arrears on March 31 and September 30 of each year, commencing March 31, 2023. The
intended use of the net proceeds of the debentures is to fund potential future opportunities and for general corporate
purposes.
On and after March 31, 2026 and prior to March 31, 2027, the debentures will be redeemable in whole or in part from
time to time by the Corporation at a redemption price equal to 125% of the principal amount of the debentures redeemed
plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and after March 31, 2027
and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time to time at the
Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set for redemption.
On redemption or at maturity on March 31, 2028, the debentures will be convertible into freely tradeable common shares
of the Corporation at the option of the holder at a conversion price of $8.65 per share.
The debentures were recorded as a financial instrument at a fair value of $150 million, net of deferred financing costs of
$6.0 million, an equity component of $18.2 million, and a deferred tax liability of $4.7 million. The equity component of
the convertible debentures relates to the portion of the debentures' value that is attributed to the conversion option,
which allows the holder to convert the debentures into common shares of the Corporation.
46
Notes: 17
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 8 – Continued
The debentures are subsequently measured at amortized cost using the effective interest method over the life of the
debenture. The balance of the debentures is:
December 31, 2023
December 31, 2022
Opening balance
Additions during period
Issuance costs
Equity component of
convertible debentures
Accretion during period
Interest payable
Debentures repurchased
Ending balance
$
128,682,883
150,000,000
(6,009,911)
(18,245,003)
5,326,643
1,871,047
(188,000)
261,437,659
$
$
127,551,885
-
-
-
1,130,998
-
$
128,682,883
9. Share Capital
Authorized: Unlimited number of common, voting shares of no par value.
Authorized: Unlimited number of preferred non-voting shares issuable in series at an issuance price of $1 per share.
Common shares issued:
Balance, December 31, 2021
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
RSU/DSU redemption
Common shares repurchased
Balance, December 31, 2022
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
Common shares repurchased
Balance, December 31, 2023
Number of Shares
Amount
374,636,443
$
406,565,894
4,171,246
306,499
661,151
94,421
(1,852,400)
27,000,000
1,829,905
(448,659)
632,798
(10,625,564)
378,017,360
424,954,374
681,601
252,145
5,000
(4,395,798)
4,250,000
1,441,790
(5,038,500)
(21,562,655)
374,560,308
$
404,045,009
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of storage
assets. Future issuances will be dependent upon financing needs, acquisition opportunities, expansion plans, equity
market conditions and transaction pricing.
The Corporation may from time to time purchase its common shares in accordance with the rules prescribed by the
Exchange or regulatory policies.
Notes: 18
47
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 9 – Continued
Dividend Reinvestment Plan
Represents common shares issued under the Corporation’s dividend reinvestment plan (“DRIP") for holders of common
shares. Under the terms of the DRIP, eligible registered holders of a minimum of 10,000 Common Shares (the
"Shareholders") may elect to automatically reinvest their cash dividends, payable in respect to the common shares, to
acquire additional common shares, which will be issued from treasury or purchased on the open market. The Corporation
may initially issue up to 5,000,000 common shares under the DRIP, which may be increased upon Board of Directors
approval, acceptance of the increase by the Exchange, and upon public disclosure of the increase.
Contributed surplus:
Opening balance
Stock based compensation
Share option, RSU/DSU redemptions
Ending balance
December 31, 2023
December 31, 2022
$
$
38,451,552
3,795,626
(1,679,165)
40,568,013
26,418,718
13,631,028
(1,598,194)
38,451,552
$
$
Stock Options
The Board of Directors of the Corporation may from time to time, at its discretion, and in accordance with the Exchange
requirements, grant to directors, officers, employees and technical consultants of the Corporation, non-transferable
options to purchase common shares provided that: i) the number of common shares reserved for issuance will not exceed
10% of the issued and outstanding common shares; ii) the options are exercisable for a period of up to 10 years from the
date of grant; iii) the number of common shares reserved for issuance to any individual director or officer will not exceed
5% of the issued and outstanding common shares; and iv) the number of common shares reserved for issuance to all
technical consultants, if any, will not exceed 2% of the issued and outstanding shares. The exercise price for purchasing
these shares cannot be less than the minimum exercise price as provided by Exchange rules.
The following table summarizes information about stock options outstanding and exercisable as at:
December 31, 2023
Weighted Average
Exercise Price
Options
December 31, 2022
Weighted Average
Exercise Price
Options
Opening
Exercised/Expired
Granted
Closing and Exercisable
36,342,000
(1,355,000)
1,600,000
36,587,000
$3.88
2.53
5.23
$3.99
30,319,650
(949,650)
6,972,000
36,342,000
$3.34
1.48
5.94
$3.88
The fair value of options granted was estimated on the date of the grant, as determined by using the Black-Scholes option
pricing model with the following assumptions:
Dividend Yield
Risk-Free Interest Rate
Expected Life of Options
Expected Volatility of the Corporation's Common Shares
2023
0.01%
3.28%
4 Years
31.73%
2022
0.01%
3.11%
4 Years
30.15%
48
Notes: 19
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 9 – Continued
Stock options exercisable and outstanding are as follows:
Exercise Price
$
0.41
$
0.50
$
1.36
$
1.78
$
2.52
$
2.90
$
3.98
$
6.31
$
5.94
$
5.23
Options exercisable and outstanding
Vesting Date
Apr. 28, 2015
Sep. 14, 2015
Dec. 21, 2016
Mar. 16, 2017
May 4, 2018
May 28, 2019
Dec. 15, 2020
Dec. 20, 2021
Dec. 19, 2022
Dec. 28, 2023
Expiry Date
Apr. 28, 2025
Sep. 14, 2025
Dec. 21, 2026
Mar. 16, 2027
May 4, 2028
May 28, 2029
Dec. 15, 2030
Dec. 20, 2031
Dec. 19, 2032
Dec. 28, 2033
December 31, 2023 December 31, 2022
1,125,500
1,480,000
2,770,000
2,795,000
2,810,000
5,764,000
5,858,000
6,767,500
6,972,000
1,125,500
1,305,000
2,620,000
2,645,000
2,660,000
5,376,500
5,515,500
6,767,500
6,972,000
1,600,000
36,587,000
-
36,342,000
Equity Incentive Plan
Under the Corporation’s Equity Incentive Plan passed on May 30, 2018 (the “Plan”), directors, employees and consultants
are eligible to receive awards, in the form of Restricted Share Units (“RSUs”), Deferred Share Units (“DSUs”) and Named
Executive Officer Restricted Share Units (“Neo RSUs”), as and when granted by the Board, at its sole discretion. The
maximum number of awards that may be issued under the Plan is 17,545,677. The maximum number of shares that may
be reserved for issuance under the Plan, together with any of the Corporation’s other share-based compensation
arrangements, may not exceed 10% of the issued shares of the Corporation.
The RSUs and DSUs granted vest in equal annual amounts over three years. The Neo RSUs vest three years after the date
of grant. RSUs, DSUs and Neo RSUs are entitled to be credited with dividend equivalents in the form of additional RSUs,
DSUs and Neo RSUs, respectively.
With certain exceptions, the Plan provides that (i) the maximum number of awards that may be granted to any one
participant together with any other share-based compensation arrangements, in any 12 month period, may not exceed
5% of the issued shares, and, in the case of any consultant, may not exceed 2% of the issued shares; and (ii) the total
value of all securities that may be issued to any non-employee director under all of the Corporation’s security based
compensation arrangements may not exceed $150,000 per annum.
The Corporation entered into Total Return Swaps (“TRS”) as economic hedges of the Corporation’s DSUs and RSUs. Under
the terms of the TRS, a bank has the right to purchase the Corporation’s shares in the marketplace as a hedge against the
returns in the TRS. At December 31, 2023, 3,486,628 TRS were outstanding at a value of $2,141,355 (December 31, 2022
– 3,081,360 TRS were outstanding at a value of $4,700,494).
At December 31, 2023, 100% of the combined DSU and RSU exposures were economically hedged. Hedge accounting is
not applied for the DSU/RSU hedging program.
During the year ended December 31, 2023, the Corporation issued 160,176 common shares at a value of $1,007,507
(December 31, 2022 – 266,268 common shares at a value of $1,786,852) under the Plan. A total of 980,328 common
shares at a value of $4,923,332 were outstanding at December 31, 2023 (December 31, 2022 – 1,123,429 common shares
at a value of $5,069,112).
Dividends
A cash dividend of $0.002831 per common share was declared on March 15, 2023, and paid to shareholders of record on
March 31, 2023.
Notes: 20
49
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 9 – Continued
A cash dividend of $0.002845 per common share was declared on June 15, 2023, and paid to shareholders of record on
June 30, 2023.
A cash dividend of $0.002859 per common share was declared on September 15, 2023, and paid to shareholders of record
on September 29, 2023.
A cash dividend of $0.002874 per common share was declared on December 14, 2023, and paid to shareholders of record
on December 29, 2023.
10. Financial Risk Management and Fair Value
The Corporation is required to disclose certain information concerning its financial instruments. The fair values of the
Corporation’s cash and short term deposits, accounts receivable and, accounts payable and accrued liabilities
approximate their carrying amount due to the relatively short periods to maturity of these financial instruments. The fair
value of the Corporation’s debt obligations is estimated based on discounted future cash flows using discount rates that
reflect current market conditions for instruments with similar terms and risks. Such fair value estimates are not necessarily
indicative of the amounts the Corporation might pay or receive in actual market transactions.
IFRS establishes a three tier fair value hierarchy to reflect the significance of the inputs used in measuring the fair value
of the Corporation’s financial instruments. The three levels are:
Level 1 – This level includes assets and liabilities measured at fair market value based on unadjusted quoted
prices for identical assets and liabilities in active markets that the Corporation can access on the measurement
date.
Level 2 – This level includes measurements based on directly or indirectly observable inputs other than quoted
prices included in Level 1. Financial instruments in this category are measured using valuation models or other
standard valuation techniques that rely on observable market inputs.
Level 3 – The measurements used in this level rest on inputs that are unobservable, unavailable, or whose
observable inputs do not justify the largest part of the fair value instrument.
The fair value of financial instruments was as follows:
December 31, 2023
December 31, 2022
Fair Value
Hierarchy
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Financial instruments:
Debt - at amortized cost
Debt - at FVTPL
Interest rate swaps
Derivative assets - at FVTPL
Derivative liabilities - at FVTPL
Level 2
Level 2
Level 2
Level 2
Level 2
(379,913,779)
(368,668,877)
(475,664,894)
(467,190,719)
(1,056,779,011)
23,984,641
1,028,346
(1,056,779,011)
23,984,641
1,028,346
-
-
(1,098,179,551)
47,124,676
4,700,494
(2,222,058)
(1,098,179,551)
47,124,676
4,700,494
(2,222,058)
Financial instruments may expose the Corporation to a number of financial risks including interest rate risk, credit risk
and environmental risk.
a) Interest rate risk – Interest rate risk arises from changes in market interest rates that may affect the fair
value of future cash flows from the Corporation’s financial assets or liabilities. Interest rate risk may be
partially mitigated by holding both fixed and floating rate debt, or by staggering the maturities of fixed rate
50
Notes: 21
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 10 – Continued
debt. The Corporation is exposed to interest rate risk primarily relating to its long term debt. The
Corporation will manage interest rate risk by utilizing fixed interest rates on its mortgages where possible,
entering into interest rate swap contracts, staggering maturities over a number of years to mitigate
exposure to any single year, and by attempting to ensure access to diverse sources of funding. There is
interest rate risk associated with variable rate mortgages and lines of credit as interest expense is impacted
by changes in the prime rate. The impact on the Statement of Income (Loss) and Comprehensive Income
(Loss) if interest rates on variable rate debt had been 1% higher or lower for the year ended December 31,
2023 would have been approximately $764,904 (December 31, 2022 - $2,252,717).
b) Credit risk – Credit risk arises from the possibility that customers may experience financial difficulty and be
unable to fulfill their financial obligations to the Corporation. The risk of incurring bad debts often arises if
storage customers relocate and cannot be found to enforce payment, or if storage customers abandon their
possessions. The extent of bad debts can be mitigated by quickly following up on any unpaid amounts
shortly after the due date, enforcing late fees, denying access to any customers with delinquent accounts,
and ultimately seizing the possessions of the customer. Additionally, the Corporation typically rents to
numerous customers, each of which constitutes significantly less than 1% of the Corporation’s monthly
revenue. This diversification in the customer base reduces credit risk from any given tenant.
The Corporation has $1,030,000 of receivables from related parties at December 31, 2023 (December 31,
2022 - $847,000). Management believes there is low credit risk associated with related party balances due
to the nature of the relationships and the historical loss rates.
Change in the Corporation’s allowance for expected credit losses is as follows:
Balance December 31, 2021
Charges or adjustments during the period
Balance December 31, 2022
Charges or adjustments during the period
Balance December 31, 2023
$
735,396
(235,860)
499,536
-
$
499,536
The creation and release of the allowance for expected credit losses has been included in operating costs
in the Statement of Income (Loss) and Comprehensive Income (Loss). Amounts charged to the allowance
account are generally written off when there is no expectation of recovering additional cash.
c) Liquidity risk – Liquidity risk is the risk that the Corporation will be unable to meet its financial obligations
as they fall due. The Corporation manages liquidity risk through cash flow forecasting and regular
monitoring of cash requirements including anticipated investing and financing activities. Typically, the
Corporation ensures that it has sufficient cash or liquid investments available to meet expected operating
expenses for a period of 30 days, excluding the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters. For the foreseeable future, the Corporation anticipates
that cash flows from operations, working capital, and other sources of financing will be sufficient to meet
its operating requirements, debt repayment obligations and will provide sufficient funding for anticipated
capital expenditures. It is the Corporation’s intention to renew any debt coming due in the next fiscal year.
The maturities of long term financial liabilities are summarized in Note 7.
d) Environmental risk – Environmental risk is inherent in the ownership of property. Various municipal,
provincial, and federal regulations can result in penalties or potential liability for remediation should
hazardous materials enter the environment. The presence of hazardous substances could also impair the
Corporation’s ability to finance or sell the property, or it may expose the Corporation to civil lawsuits. To
mitigate such risk, the Corporation will procure recent or updated environmental reports for all acquisitions.
Notes: 22
51
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 10 – Continued
It also prohibits the storage of hazardous substances as a condition of the rental contract signed by
customers.
Unless otherwise noted, it is management’s opinion that the Corporation is not exposed to significant currency risk.
11.
Income Tax
2023
2022
Loss before taxes
Combined federal and provincial statutory income tax rate
(10,336,612)
26.50%
(50,826,696)
26.50%
Income tax recovery calculated at statutory rate
(2,739,202)
(13,469,074)
Non-deductible items
Change in estimate
Change in tax rate and other items
Income tax expense (recovery)
848,127
(6,584,653)
(160,726)
(8,636,454)
3,549,770
-
334,565
(9,584,739)
Movements in deferred tax assets (liabilities) related to temporary differences during the year are as follows:
December 31,
2022
Recognized
in earnings
Recognized in
Equity
Acquired in
Business
Combinations
December 31,
2023
(129,957,336)
11,054,825
(2,206,483)
(645,430)
20,968,522
1,839,574
58,477,898
(40,468,430)
(1,842,696)
3,151,162
65,689
378,363
4,928,295
698,089
1,257,552
8,636,454
-
-
(2,814,949)
(181,415)
(4,738,333)
-
-
-
-
-
-
-
-
-
(4,738,333)
(2,996,364)
(134,614,981)
14,024,572
(6,879,127)
(267,067)
25,896,817
2,537,663
59,735,450
(39,566,673)
Property, plant and equipment
Goodwill and intangible assets
Debt
Unrealized fair value of derivatives
Lease liability
Deferred financing costs
Non-capital loss carry forwards
Deferred tax asset (liability)
12. Related Party Transactions
The Corporation holds a Master Franchise Agreement from Canadian PUPS Franchises Inc. (CPFI) which provides the
Corporation with the exclusive Canadian franchise rights for the development and operation of portable storage
throughout Canada. CPFI is a corporation related to Iqbal Khan and Steven Scott who are directors of the Corporation.
The Corporation pays a monthly royalty of 3.5% on the gross sales. During the year ended December 31, 2023, the
Corporation paid $382,400 (December 31, 2022 - $405,196) for royalties and $3,054,716 (December 31, 2022 -
$3,046,665) for storage containers and other equipment under the Master Franchise Agreement.
Included in accounts payable and accrued liabilities, relating to the previously noted transactions, at December 31, 2023
was $52,758 (December 31, 2022 - $58,225) payable to CPFI.
52
Notes: 23
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 12 – Continued
The Corporation has management agreements with Access Self Storage Inc. and related companies (“Access Group”).
These companies are related to Iqbal Khan and Steven Scott who are directors of the Corporation. The Corporation
invoices the Access Group for management fees as well as additional services it provides as part of the management
agreements. The Access Group will also invoice the Corporation for construction, maintenance and other services related
to its day-to-day operations.
During the year ended December 31, 2023, the Corporation received $6,017,053 (December 31, 2022 - $8,471,116) in
payments and reimbursements related to the management agreements. During the year ended December 31, 2023, the
Corporation also incurred $50,583,697 (December 31, 2022 - $32,508,783) in expenditures related to construction,
maintenance and other services related to its day-to-day operations.
Included in accounts payable and accrued liabilities as at December 31, 2023 was $2,790,800 (December 31, 2022 -
$522,072) payable to the Access Group. Included in accounts receivable as at December 31, 2023 was $1,030,452
(December 31, 2022 - $846,587) receivable from the Access Group.
Key management personnel are those persons having authority and responsibility for planning, directly and indirectly
directing, and controlling the activities of the Corporation. Key management personnel are defined as officers and
Directors of the Corporation. The remuneration of key management personnel for employment services rendered are as
follows:
December 31, 2023
December 31, 2022
Wages, management fees, bonuses and directors fees
Stock based compensation
13. Capital Risk Management
$
$
1,324,495
1,047,580
2,372,075
$
$
610,212
6,065,672
6,675,884
The Corporation’s objectives when managing capital are to safeguard the Corporation’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation defines capital
as shareholders’ equity excluding contributed surplus and long term debt. The Corporation manages the capital structure
and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying
assets. To maintain or adjust the capital structure, the Corporation may attempt to issue new shares, issue new debt,
acquire or dispose of assets, and adjust the amount of cash and short term deposits. The Board of Directors does not
establish a quantitative return on capital criteria, but rather promotes year over year sustainable growth.
The Corporation reviews and assesses its capital structure on an ongoing basis. The Corporation determines the
appropriate mortgage debt to be placed on properties at the time a particular property is acquired or when an existing
mortgage financing matures. Consideration is given to various factors including, but not limited to: interest rates,
financing costs, the term of the mortgage and the strength of cash flow arising from the underlying asset. Mortgage debt
is usually only secured by the underlying asset. The Corporation monitors its capital using a debt to fair value ratio. Except
for the debt covenants described in Note 7, the Corporation is not subject to any externally imposed capital requirements.
Notes: 24
53
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
14. Segmented Information
The Corporation operates three reportable business segments. Each segment is a component of the Corporation for which
separate discrete financial information is available for evaluation by the chief operating decision makers of the
Corporation.
-
-
Self Storage – involves the customer leasing space at the Corporation’s property for short or long term storage.
Self storage also includes customers utilizing space for inventory storage for last mile delivery, small commercial
operations, and vehicles.
Portable Storage – involves delivering a portable storage unit to the customer. The customer can opt to keep
the portable storage unit at their location, or have it moved to another location for further storage.
- Management Division – involves revenues generated from the management of stores owned by third parties.
The Corporation evaluates performance and allocates resources based on earnings before interest, taxes, depreciation
and amortization, and stock based compensation. Corporate costs are not allocated to the segments and are shown
separately.
For the Year Ended December 31, 2023
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
Revenue
Operating costs
Net operating income
$
276,116,878
$
10,570,678
$
2,037,056
$
-
$
288,724,612
87,901,374
188,215,504
7,230,494
3,340,184
-
2,037,056
-
-
95,131,868
193,592,744
Acquisition and integration
Selling, general and admin.
Stock based compensation
-
-
-
-
-
-
Depreciation and amortization
97,665,700
1,951,873
Interest
83,297,441
Accretion of interest on
convertible debentures
Realized gain on real estate
Realized gain on derivative
financial instruments
Unrealized loss on derivative
financial instruments
Deferred tax recovery
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,904,217
5,904,217
24,290,628
24,290,628
3,795,626
3,795,626
900,609
100,518,182
-
83,297,441
4,195,644
4,195,644
(15,528,115)
(15,528,115)
(3,994,356)
(3,994,356)
1,450,089
1,450,089
(8,636,454)
(8,636,454)
Net income (loss)
$
7,252,363
$
1,388,311
$
2,037,056
$
(12,377,888)
$
(1,700,158)
Additions:
Real estate and equipment
173,119,868
5,814,306
-
1,661,926
180,596,100
54
Notes: 25
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 14 – Continued
For the Year Ended December 31, 2022
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
Revenue
Operating costs
Net operating income
$
248,624,166
$
11,308,895
$
1,895,228
$
-
$
261,828,289
78,000,948
170,623,218
7,793,399
3,515,496
-
1,895,228
-
-
85,794,347
176,033,942
Acquisition and integration
Selling, general and admin.
Stock based compensation
-
-
-
-
-
-
Depreciation and amortization
101,624,227
1,658,206
Interest
74,801,847
Unrealized loss on derivative
financial instruments
Deferred tax recovery
-
-
-
-
-
-
-
-
-
-
-
-
9,587,840
9,587,840
21,048,950
21,048,950
13,631,028
13,631,028
844,228
104,126,661
-
74,801,847
3,664,312
3,664,312
(9,584,739)
(9,584,739)
Net income (loss)
$
(5,802,856)
$
1,857,290
$
1,895,228
$
(39,191,619)
$
(41,241,957)
Additions:
Real estate and equipment
275,662,009
2,797,573
-
271,855
278,731,437
Total Assets
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
As at December 31, 2022
$
1,963,914,228
$
18,003,918
$
16,564,940
$
22,269,074
$
2,020,752,160
As at December 31, 2023
$
1,887,649,008
$
20,767,600
$
16,587,785
$
119,213,563
$
2,044,217,956
15. Commitments and Contingencies
Lease Liabilities
The Corporation leases buildings and land in British Columbia, Alberta, Manitoba, Ontario and Quebec. The leases expire
between 2026 and 2057, with the leases expiring in 2024 and 2027 having up to 5 years and 20 years of renewals,
respectively, which are expected to be exercised by the Corporation.
The lease liabilities are measured at the present value of the lease payments that are not paid at the balance sheet date.
Lease payments are apportioned between interest expense and a reduction of the lease liability using the Corporation’s
incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liability.
For the year ended December 31, 2023, the Corporation recognized $3,668,569 (December 31, 2022 - $3,035,180) in
interest expense related to its lease liabilities.
Notes: 26
55
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
Note 15 – Continued
A reconciliation of the lease liabilities associated with self storage properties is as follows:
December 31, 2023
December 31, 2022
Balance, beginning of period
Additions and reassessments
Cash payments
Interest
Capitalized interest
Balance, end of period
$
80,518,572
23,416,757
(7,887,925)
3,668,569
$
99,715,973
-
$
$
77,094,742
6,356,372
(6,181,239)
3,035,180
213,517
80,518,572
Contingency
The Corporation has no legal contingency provisions at December 31, 2023 or December 31, 2022.
16. Subsequent Events
On February 22, 2024, the Corporation approved an increase to the quarterly dividend for Q1 2024 by 0.5% to $0.002888
per common share.
56
Notes: 27
ANNUAL REPORT 2023
StorageVault Canada Inc.
Notes to the Financial Statements
For the Years Ended December 31, 2023 and 2022
StorageVault Canada Inc.
OFFICERS
Steven Scott
Chief Executive Officer
Iqbal Khan
Chief Financial Officer
DIRECTORS
Jay Lynne Fleming
Vancouver, BC
Ben Harris
Bedford, NY
Iqbal Khan
Toronto, ON
Steven Scott
Toronto, ON
Alan Simpson
Regina, SK
Mary Vitug
Toronto, ON
LEGAL COUNSEL
AUDITORS
DLA Piper (Canada LLP)
Livingston Place
1000, 250 2nd St. S.W.
Calgary, AB T2P 0C1
Telephone 403-296-4470
Facsimile 403-296-4474
MNP LLP
2000, 112 4th Ave S.W.
Calgary, AB T2P 0H3
Telephone 403-263-3385
Facsimile 403-269-8450
HEAD OFFICE
REGISTRAR & TRANSFER AGENT
StorageVault Canada Inc.
100 Canadian Rd.
Toronto, ON M1R 4Z5
Telephone 1-877-622-0205
Email: ir@storagevaultcanada.com
TSX LISTING:
SVI
TSX Trust
300 – 5th Ave. S.W., 10th Floor
Calgary, AB T2P 3C4
Telephone 403-218-2800
Facsimile 403-265-0232
Notes: 28
57
ANNUAL REPORT 2023
MANAGEMENT
DISCUSSION AND
ANALYSIS
58
ANNUAL REPORT 2023 59
ANNUAL REPORT 2023 StorageVault Canada Inc.
(the “Corporation”)
Form 51-102F1
Management’s Discussion and Analysis
For the Three Months and Fiscal Year Ended December 31, 2023
The following Management’s Discussion and Analysis (“MD&A”) provides a review of corporate and market developments,
results of operations and the financial position of StorageVault Canada Inc. (“SVI” or “the Corporation”) for the three months
and fiscal year ended December 31, 2023. This MD&A should be read in conjunction with the audited fiscal 2023 financial
statements and accompanying notes contained therein, which have been prepared in Canadian dollars and in accordance
with International Financial Reporting Standards (“IFRS”). This MD&A is based on information available to Management as
of February 22, 2024.
FORWARD LOOKING STATEMENTS
This MD&A contains forward-looking information. All statements, other than statements of historical fact, included in this
MD&A, may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-
looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and
phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might
occur or be achieved. In particular, forward-looking information included in this MD&A includes statements with respect to:
the Corporation’s outlook as to the market for self storage and portable storage; economic conditions; the availability of
credit; the expectation of cash flows; the Corporation’s strategic objectives, growth strategies, goals and plans; potential
sources of financing including issuing additional common shares as a source of financing, generally, and as a source of
financing for potential acquisitions; future expansion of existing SVI Stores; the size of potential future acquisitions the
Corporation may make in 2024; the annualized net operating income (NOI), a non-IFRS measure, and annualized funds from
operations (FFO), a non-IFRS measure, assumes acquisitions that occurred in fiscal 2023 were purchased on January 1, 2023;
and the general outlook for the Corporation. This forward-looking information is contained in “Nature of Business”, “Business
and General Corporate Strategy”, “Outlook”, “Financial Results Overview” and “Working Capital, Long Term Debt and Share
Capital” and other sections of this MD&A.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of the Corporation to be materially different from those
expressed or implied by such forward-looking information. Certain of such risks are discussed in the “Risks and Uncertainties”
section of this MD&A.
Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking information, there may be other factors that cause actions, events
or results to be not as anticipated, estimated or intended. There can be no assurance that forward-looking information will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on forward-looking information. The factors identified above are not
intended to represent a complete list of the factors that could affect the Corporation.
The forward-looking information in this MD&A should not be relied upon as representing the Corporation’s views as of any
date subsequent to the date of this MD&A. Such forward-looking information is based on a number of assumptions which
may prove to be incorrect, including, but not limited to: the ability of the Corporation to obtain sufficient or necessary
financing, satisfy conditions under previously announced acquisition agreements, or satisfy any requirements of the TSX with
respect to these acquisitions and any related private placement; the level of activity in the storage business and the economy
generally; consumer interest in the Corporation’s services and products; competition and SVI’s competitive advantages;
trends in the storage industry, including, increased growth in self storage, portable storage and management segments; the
availability of attractive and financially competitive asset acquisitions in the future; the revenue from acquisitions completed
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in fiscal 2023 being extrapolated to the entire period for 2023 and being consistent with, and reproducible as, revenue in
future periods; and anticipated and unanticipated costs. A description of additional assumptions used to develop such
forward-looking information and a description of additional risk factors that may cause actual results to differ materially from
forward-looking information can be found in the Corporation’s disclosure documents on the SEDAR website at
www.sedarplus.ca. The Corporation undertakes no obligation to publicly update or review any forward-looking information,
except in accordance with applicable securities laws. Historical results of operations and trends that may be inferred from
this MD&A may not necessarily indicate future results from operations.
The amount of potential future acquisitions by the Corporation in fiscal 2024 and revenue and NOI growth for 2024 may be
considered a financial outlook, as defined by applicable securities legislation, contained in this MD&A and the accompanying
news release. Such information and any other financial outlooks or future-oriented financial information has been approved
by management of the Corporation as of the date hereof. Such financial outlook or future-oriented financial information is
provided for the purpose of presenting information about management's current expectations and goals relating to the future
business of the Corporation. Readers are cautioned that reliance on such information may not be appropriate for other
purposes.
Additional information relating to StorageVault Canada Inc. can be found at www.sedarplus.ca.
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ANNUAL REPORT 2023
TABLE OF CONTENTS
GLOSSARY OF TERMS
NATURE OF OUR BUSINESS
BUSINESS AND GENERAL CORPORATE STRATEGY
OUTLOOK
DESCRIPTION OF OUR OPERATIONS
FINANCIAL RESULTS OVERVIEW
WORKING CAPITAL, DEBT AND SHARE CAPITAL
CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
RELATED PARTY TRANSACTIONS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ACQUISITION COMMITTEE AND ACQUISITION COMMITTEE MANDATE
ACCOUNTING POLICIES
RISKS AND UNCERTAINTIES
CORPORATE CONTACT INFORMATION
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64
65
67
68
70
77
82
83
83
86
87
88
91
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GLOSSARY OF TERMS
The following abbreviated terms are used in the Management’s Discussion & Analysis and have the following respective
meanings:
“AFFO” means FFO plus acquisition and integration costs. Acquisition and integration costs are one time in nature to the
specific assets purchased or pending and are expensed under IFRS. AFFO is a non-IFRS measure – see Accounting Policies
Non-IFRS Measures;
“Existing Self Storage” means stabilized stores that the Corporation has owned or leased since the beginning of the previous
fiscal year; Existing Self Storage is a non-IFRS measure – see Accounting Policies Non-IFRS Measures;
“FFO” means net income (loss) excluding gains or losses from the sale of depreciable real estate, plus depreciation and
amortization, stock based compensation expenses, realized gains or losses on real estate, realized and unrealized gains or
losses on interest rate swaps, interest accretion on convertible debentures, realized and unrealized gains or losses on
derivative financial instruments and deferred income taxes; and after adjustments for equity accounted entities and non-
controlling interests;
“IFRS” means International Financial Reporting Standards;
“MD & A” means this Management’s Discussion and Analysis disclosure document;
“New Self Storage” means non-stabilized stores that have not been owned or leased continuously since the beginning of the
previous fiscal year; New Self Storage is a non-IFRS measure – see Accounting Policies Non-IFRS Measures;
“NOI” means net operating income, calculated as revenue from storage and related services less related property operating
costs; NOI is a non-IFRS measure – see Accounting Policies Non-IFRS Measures;
“Non-IFRS Measures” means operating and performance metrics that are not always calculated with reference to IFRS, but
are used commonly in the storage industry to measure operating results for assets owned or leased;
“Q1, Q2, Q3 or Q4” means a three month fiscal quarter of the Company, ending on March 31, June 30, September 30 and
December 31 respectively;
“Revenue Management” means the operating principle of achieving optimal revenue through a combination of rental rate
increases on existing customers (increases the existing revenue base and rent per square foot) and dynamic pricing of
available inventory;
“Store” means self storage property or location or facility or site;
“Subsequent Events” means material transactions that have occurred from January 1, 2024 to February 22, 2024;
“SVI” means StorageVault Canada Inc.;
“The Company” or “The Corporation” or “We” or “Our” or “StorageVault” means StorageVault Canada Inc.
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ANNUAL REPORT 2023
NATURE OF OUR BUSINESS
Business Overview
The Corporation’s primary business is owning, managing and renting self storage and portable storage space to individuals
and commercial customers. The Corporation also stores, shreds, and manages documents and records for customers. The
common shares of the Company are publicly traded on the TSX under the symbol ‘SVI’.
As of December 31, 2023, SVI owned 212 stores and 5,015 portable storage units across Canada, for a total of 11,776,218
square feet of rentable storage space in 103,349 rental units. The stores operate under the Access Storage, Depotium Mini-
Entrepots and Sentinel Storage brands. Our portable storage business operates under the Cubeit and PUPS brands. Our
records management business operates under the RecordXpress brand.
In addition to our owned stores, SVI manages 31 stores that are owned by third parties for a management fee, bringing the
total number of stores owned and managed to 243.
We are able to leverage our national storage presence to offer last-mile storage solutions, such as personal protective
equipment handling for health care organizations across the country. Through our portable storage and records management
businesses, we offer mobilization solutions to move items from our locations directly to the end user.
SVI’s objective is to own and manage storage assets in Canada’s top markets. The Corporation will focus on acquiring storage
assets with strong existing cash flows, in strategic markets, preferably with excess capacity and land allowing for future
development and expansion of our self, portable and information and records management storage businesses. Financing
for this growth is intended to come from a combination of free cash flow from operations, mortgage financing and the
issuance of debt or equity securities.
The Storage Landscape
The significant growth in demand for storage space in Canada over the past decade has largely been driven by the following
factors: population growth, immigration, change of circumstances, smaller living areas and workspaces, business incubation,
e
mile solutions, lack of warehouse space, downsizing, renovations, moving, death, divorce, insurance, etc.
We expect these trends to continue in 2024 and beyond.
‐
commerce, last
‐
Market Size
The Canadian storage market is estimated to be 90 million square feet across 3,000 stores, with the top 10 operators owning
less than 15% of these stores; by comparison, the US market is estimated at over 2 billion square feet across 51,000 plus
stores, suggesting that Canada is an under-stored nation.
The market fragmentation of the Canadian storage industry combined with the low square foot per capita provides significant
opportunities for consolidation, expansion and development. Our existing platform, relationships, reputation and knowledge
of the storage industry allows us to identify and take advantage of accretive and strategic acquisition opportunities.
Pricing and Occupancy
A store’s rental rates and level of occupancy are dependent upon factors such as lead generation, population density and
growth, the local economy, pricing, customer service and curb appeal. We believe in managing our inventory (units) through
pricing. Since our rentals are either weekly or monthly, we are able to react to market demand and inflationary pressures
quickly. Our objective is to maximize revenue by increasing rent per square foot first, and maximizing occupancy second.
Competition
New development in a market impacts the occupancy and the ability to raise rates at existing stores until the market absorbs
the new space. New entrants tend to offer significant move-in specials to achieve rapid occupancy gains. Once the new space
has leased up, promotions are reduced or eliminated and the focus switches to maximizing revenue through demand and
supply pricing strategies. This can result in short term fluctuations in occupancy and revenue per square foot at existing
stores.
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Seasonality
The storage business is subject to seasonality. There is naturally more activity in the warmer months and less activity in the
colder months. As a result, occupancies and revenue per square foot tend to be highest in Q2 and Q3 and lowest in Q1 and
Q4. This trend is consistent with what is experienced in the Northern US. This seasonality is more significant in the portable
storage business as all of our portable units are non-climate controlled. Also, operating costs tend to be higher during the
winter months in Canada due to heating and snow removal costs resulting in lower NOI margins in Q1 and Q4 versus Q2 and
Q3.
BUSINESS AND GENERAL CORPORATE STRATEGY
SVI owns and manages storage locations offering both self storage and portable storage for rent on a weekly or monthly
basis, for personal and commercial use. We are focused on owning and operating locations in the top markets in Canada
with a plan to have multiple stores, where possible, in each market we operate.
Growth Strategies
Our growth strategy is described in the following six segments: acquisitions, organic growth through improved performance
of existing stores, expansion of our existing stores to meet pent up demand, expansion of our portable storage, records
management and FlexSpace Logistics business segments.
Acquisitions
The combination of our corporate platform, our track record of closing transactions, our industry relationships and our
storage experience provides SVI with a unique advantage in the Canadian marketplace. This advantage allows us to identify
accretive and strategic purchasing opportunities at attractive prices that provide synergies in operations, marketing and
revenue maximization.
We intend to be a disciplined purchaser, with a focus on Canada’s top markets. As there is more competition to acquire
existing stores, especially from US purchasers, we may find it difficult to acquire assets that meet our criteria.
Organic Growth
Scale is important and the increased size of SVI provides a significant advantage in negotiating better rates on: marketing,
insurance, software, moving and storage supplies, merchant services, technical support and long distance transport of
portable units. These economies of scale translate into improved margins and better results.
Efficiencies are also gained through the cross promotion and marketing of the self storage and portable storage platforms,
and our records management services due to our national footprint, and offering different but complementary product
choices at various price points to our customers.
The most significant evolution in the storage industry has been in the area of revenue management. Revenue management
is the principle of achieving optimal revenue through a combination of rental rate increases on existing customers (increases
the existing revenue base and rent per square foot) and dynamic pricing of available inventory so that we are selling the right
space, to the right customer, at the right time, for the right price. With a focus on providing the best value to the customer,
stores are able to achieve significant top and bottom line growth, even when occupancies are stable.
Existing Store Expansion
There is over 1,500,000 square feet of development potential on excess land currently owned and operated by SVI. When
market conditions are suitable and high occupancies and leads indicate pent up demand, we expect to expand a number of
our existing locations. In fiscal 2023, we completed 40,000 square feet of expanded and renovated space and currently expect
to complete 50,000 square feet of expanded and renovated space by the end of the fiscal year 2024. In addition, we have
another 450,000 rentable square feet of expansions projects in the entitlement and permitting stage.
Expansion of Portable Storage Business
The portable storage business continues to complement our overall business, providing additional synergies and efficiencies
to our platform. While margins in portable storage are not as high as they are in self storage, they are still very attractive, and
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ANNUAL REPORT 2023
with the larger geographic and operating footprint achieved through our growth strategy, we believe that margins will
continue to improve.
Expansion of Information and Records Management Business
The records management business is a complementary vertical in the storage space, much like portable storage, and fills up
excess space, delivering strong "sticky" cash flows. RecordXpress is one of the largest records management companies in
Canada and is the only Canadian owned company that can provide a national platform. This provides a significant competitive
advantage as government organizations, such as hospitals and charities, do not want their confidential information under
foreign ownership.
Expansion of FlexSpace Logistics Business
The FlexSpace Logistics business is a platform that focuses on providing end to end solutions for business clients with our
storage, logistics, and inventory management offerings. Services are provided across Canada through SVI’s existing portfolio
of businesses and our extensive network of partners, allowing us to offer everything from warehousing and storage to last
mile delivery to inventory management. A true one-stop shop for businesses, especially small to medium sized companies
who were previously underserved in the space.
Financing Strategy
We anticipate funding the capital requirements of our growth strategy through excess operating cash flow, utilization of
suitable leverage and from the issuance of equity and debt securities.
Financing With Secured Debt and Lines of Credit
The Corporation will partially fund the purchase of storage assets with debt. A number of factors are considered when
evaluating the level of debt in our capital structure, as well as the amount of debt that will be fixed or variable rate. In making
financing decisions, the factors that we consider include, but are not limited to: interest rate, amortization period, covenants
and restrictions, security requirements, prepayment rights and costs, overall debt level, maturity date in relation to existing
debt, overall percentage of fixed and variable rate debt and expected store performance.
Issuance of Common Shares
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of storage
assets or pay down debt. SVI will consider issuances of additional common shares for cash proceeds or as consideration in
the purchase of storage assets in the upcoming fiscal year if accretive to shareholders. Future issuances will be dependent
upon financing needs, acquisitions and expansion, equity market conditions at the time and transaction pricing.
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OUTLOOK
The Corporation’s outlook for acquisitions, share capital, results from operations and subsequent events are:
Acquisitions
In 2024, we expect to acquire and complete $70 million to $100 million of assets.
Historically we have been successful in meeting our acquisition targets; however, as there is uncertainty in the Canadian
economy, and more competition to acquire existing stores, we may not be able to find acquisitions that meet our criteria.
Share Capital
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of storage
assets. With the significant cash flow retained by the Corporation, future issuances will be dependent upon financing needs,
acquisition opportunities, expansion plans, equity market conditions and transaction pricing.
The Corporation may from time to time purchase its’ common shares in accordance with the rules prescribed under the TSX
or regulatory policies.
Results from Operations
We expect continued growth in revenue and NOI in 2024 as we execute on our revenue management system and as we
continue to control costs. We also expect contributions from the acquisitions made in 2023, in fiscal 2022, and as well as
those we completed in fiscal 2021 that are now stabilizing.
The Corporation may use discounts in select markets to match competitive forces and retain its customer base as a result of
competitors trying to jump-start their lease up periods by offering significant discounts to new customers. This can result in
short term fluctuations in occupancy and rent per square foot at existing stores. The effect on overall revenues is not expected
to be significant, but it may be enough to slow the rate of growth in revenues experienced in past years.
Subsequent Events
The following item(s) have been announced by the Corporation:
On February 22, 2024, approved the increase to the quarterly dividend for Q1 2024 by 0.5% to $0.002888 per
common share.
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ANNUAL REPORT 2023
DESCRIPTION OF OUR OPERATIONS
As at December 31, 2023, the Corporation owned the following self storage and portable storage operations:
Location
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
Nova Scotia
Portable Storage Units
Acres
Number of
Stores
Units
Rentable Square
Feet
46
154
34
40
347
43
22
19
44
11
12
97
22
7
10,179
22,153
2,715
4,846
46,444
10,107
1,890
5,015
1,027,489
2,543,417
356,554
490,057
5,507,499
1,029,038
249,035
573,129
Total
686
212
103,349
11,776,218
Management is focused on increasing NOI and value as follows:
Revenue Management
Revenue per square foot is the greatest driver in increasing NOI and shareholder value. Our management platform has
intelligent software, supported by dedicated personnel, that understands the nuances of each local market. Our in-depth
knowledge of our customer base and the competition allows us to implement strategic rate increases and optimize proven
promotions to attract clientele that will become long-term customers, repeat renters and strong referral sources.
Professional Management
The management team at SVI has extensive experience in all aspects of the storage industry including:
delivering superior results
management of over 240 storage locations throughout Canada
acquisition, development and management of over 17 million square feet of storage space
over 200 years of combined experience in the storage industry by senior management
Marketing
We implement specific marketing plans for the different localities, stages and seasons of our business with emphasis on
maximizing return on investment for every dollar spent. Our strategies to attract customers include strong search engine
marketing, user friendly online presence and no-contact “self serve” rental processes, community connection programs and
development of large national accounts to fulfill their last-mile storage needs. We conduct specific store and market analysis
to determine how, when and where to focus our marketing dollars with the goal of efficiently and consistently increasing the
value of our stores.
Costco Supplier
Our storage business is the exclusive supplier to Costco Wholesale Canada Ltd. (Costco) members across Canada. This
relationship provides exclusive access to Costco’s vast membership base as a marketing channel.
Reservation Centre
Our management platform includes a Reservation Centre (call centre) that provides call management services designed to
increase reservations and move-ins, increase productivity at the store level and improve our corporate image through
professionalism, consistency of messaging and willingness to resolve issues. Our Reservation Centre agents have training in
the storage business and understand the need to introduce and greet professionally, establish rapport with customers, build
trust, listen, ask the right questions, ask for the business and close the sale. The overall result is an increased close rate
leading to improved financial performance.
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ANNUAL REPORT 2023
Technology and Software
SVI stores utilize modern and intelligent software, technology and security systems. We work with vendors and developers,
who have knowledge of the storage business, to take advantage of developing trends, including: (i) exception reports that
allow management to monitor key performance and indicators ensuring that management’s time is more effectively spent
preventing and resolving issues than identifying them; and (ii) web-based software reporting that allows authorized
individuals to view specific store information in real time. The user can choose to see daily rental rates achieved and the
number of customers moving-in or moving-out. This tool allows us to adjust quickly to opportunities and threats in each
marketplace.
Economies of Scale
The size and scope of our management platform, combined with the growing size of our own operations, translates into
higher gross margins through the centralization of many functions such as revenue management, property management,
employee compensation and benefits programs, as well as the development and documentation of standardized operating
procedures and best practices.
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ANNUAL REPORT 2023
FINANCIAL RESULTS OVERVIEW
As of December 31, 2023, SVI acquired 7 locations plus 2 adjacent parcels of land for $94.6 million. There are 3 additional
locations totaling $35.5 million announced in fiscal 2023 that are expected to close in 2024. In fiscal 2022, SVI acquired 10
stores, 1 adjacent property and 3 records management operations for $241.1 million. The timing of these acquisitions affects
the comparative results.
Selected Financial Information
(unaudited)
Three Months Ended December 31
(audited)
Fiscal
2023
2022
$
%
2023
2022
$
Change
Change
Storage revenue and related services
$
73,750,304
$
68,605,992
$
5,144,312
Management fees
Operating costs
Net operating income 1
Less:
518,609
74,268,913
24,336,840
49,932,073
483,861
69,089,853
23,068,991
46,020,862
34,748
5,179,060
1,267,849
3,911,211
Acquisition and integration costs
Selling, general and administrative
1,959,784
6,300,966
1,666,565
5,461,630
293,219
839,336
Interest
20,809,179
21,321,051
(511,872)
7.5%
7.2%
7.5%
5.5%
8.5%
17.6%
15.4%
-2.4%
Stock based compensation
2,944,323
12,587,262
(9,642,939)
-76.6%
87,689
(23,454)
-
-
87,689
(23,454)
-
-
$
286,687,556
$
259,933,061
$
26,754,495
2,037,056
1,895,228
141,828
288,724,612
261,828,289
26,896,323
95,131,868
85,794,347
9,337,521
193,592,744
176,033,942
17,558,802
%
10.3%
7.5%
10.3%
10.9%
10.0%
5,904,217
24,290,628
83,297,441
3,795,626
(15,528,115)
(3,994,356)
9,587,840
(3,683,623)
-38.4%
21,048,950
74,801,847
3,241,678
8,495,594
15.4%
11.4%
13,631,028
(9,835,402)
-72.2%
-
-
(15,528,115)
(3,994,356)
-
-
Realized (gain) loss on real estate
Realized (gain) loss on derivative
financial instruments
Unrealized (gain) loss on derivative
financial instruments
Interest accretion on convertible
debentures
Depreciation and amortization
18,458,800
(422,566)
18,881,366
-4468.3%
1,450,089
3,664,312
(2,214,223)
-60.4%
4,195,644
-
4,195,644
-
4,195,644
-
4,195,644
-
25,278,530
34,124,962
(8,846,432)
-25.9%
100,518,182
104,126,661
(3,608,479)
-3.5%
80,011,461
74,738,904
5,272,557
7.1%
203,929,356
226,860,638
(22,931,282)
-10.1%
Net income (loss) before taxes
(30,079,388)
(28,718,042)
(1,361,346)
-4.7%
(10,336,612)
(50,826,696)
40,490,084
79.7%
Deferred tax (expense) recovery
2,292,414
5,452,549
(3,160,135)
-58.0%
8,636,454
9,584,739
(948,285)
-9.9%
Net income (loss)
$
(27,786,974)
$
(23,265,493)
$
(4,521,481)
-19.4%
$
(1,700,158)
$
(41,241,957)
$
39,541,799
95.9%
1 Non-IFRS Measure.
Weighted average number of common shares outstanding
Basic
Diluted
374,749,506
377,962,879
(3,213,373)
383,424,053
390,881,796
(7,457,743)
-0.9%
-1.9%
376,930,150
385,604,697
378,051,496
(1,121,346)
390,970,412
(5,365,715)
-0.3%
-1.4%
Net income (loss) per common share
Basic
Diluted
$
(0.074)
$
(0.062)
$
(0.072)
$
(0.060)
$
(0.005)
$
(0.109)
$
(0.004)
$
(0.105)
Storage revenue and related services
For the three months ended December 31, 2023, the Corporation had revenues of $73.8 million (December 31, 2022 - $68.6
million), an increase of 7.5% for the quarter and contributing to a $26.8 million or 10.3% increase over fiscal 2022. This
increase is attributable to mainly to incremental revenue from organic revenue growth and from the stores acquired in the
prior fiscal year. For additional information, see “Segmented, Existing and New Self Storage and Portable Storage Results.”
Management fees
For the three months ended December 31, 2023, management fees increased by 7.2% over the same prior year period
resulting in a 7.5% increase for the fiscal year. The increase in management fees, while muted by the acquisition of managed
stores, is mainly a result of increases in revenue from managed stores.
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ANNUAL REPORT 2023
As of December 31, 2023, SVI acquired 7 locations plus 2 adjacent parcels of land for $94.6 million. There are 3 additional
locations totaling $35.5 million announced in fiscal 2023 that are expected to close in 2024. In fiscal 2022, SVI acquired 10
stores, 1 adjacent property and 3 records management operations for $241.1 million. The timing of these acquisitions affects
FINANCIAL RESULTS OVERVIEW
the comparative results.
Selected Financial Information
Storage revenue and related services
$
73,750,304
$
68,605,992
$
5,144,312
$
286,687,556
$
259,933,061
$
26,754,495
(unaudited)
Three Months Ended December 31
(audited)
Fiscal
2023
2022
$
%
2023
2022
$
Change
Change
518,609
74,268,913
24,336,840
49,932,073
483,861
69,089,853
23,068,991
46,020,862
34,748
5,179,060
1,267,849
3,911,211
2,037,056
1,895,228
141,828
288,724,612
261,828,289
26,896,323
95,131,868
85,794,347
9,337,521
193,592,744
176,033,942
17,558,802
Management fees
Operating costs
Net operating income 1
Less:
Acquisition and integration costs
Selling, general and administrative
1,959,784
6,300,966
1,666,565
5,461,630
293,219
839,336
Interest
20,809,179
21,321,051
(511,872)
Stock based compensation
2,944,323
12,587,262
(9,642,939)
-76.6%
Realized (gain) loss on real estate
Realized (gain) loss on derivative
financial instruments
Unrealized (gain) loss on derivative
financial instruments
Interest accretion on convertible
debentures
87,689
(23,454)
87,689
(23,454)
-
-
-
5,904,217
24,290,628
83,297,441
3,795,626
(15,528,115)
(3,994,356)
9,587,840
(3,683,623)
-38.4%
21,048,950
74,801,847
3,241,678
8,495,594
15.4%
11.4%
13,631,028
(9,835,402)
-72.2%
(15,528,115)
(3,994,356)
-
-
-
18,458,800
(422,566)
18,881,366
-4468.3%
1,450,089
3,664,312
(2,214,223)
-60.4%
4,195,644
4,195,644
4,195,644
4,195,644
Depreciation and amortization
25,278,530
34,124,962
(8,846,432)
-25.9%
100,518,182
104,126,661
(3,608,479)
-3.5%
80,011,461
74,738,904
5,272,557
7.1%
203,929,356
226,860,638
(22,931,282)
-10.1%
Net income (loss) before taxes
(30,079,388)
(28,718,042)
(1,361,346)
-4.7%
(10,336,612)
(50,826,696)
40,490,084
79.7%
Deferred tax (expense) recovery
2,292,414
5,452,549
(3,160,135)
-58.0%
8,636,454
9,584,739
(948,285)
-9.9%
Net income (loss)
$
(27,786,974)
$
(23,265,493)
$
(4,521,481)
-19.4%
$
(1,700,158)
$
(41,241,957)
$
39,541,799
95.9%
%
10.3%
7.5%
10.3%
10.9%
10.0%
-
-
-
7.5%
7.2%
7.5%
5.5%
8.5%
17.6%
15.4%
-2.4%
-
-
-
1 Non-IFRS Measure.
Weighted average number of common shares outstanding
Basic
Diluted
Basic
Diluted
Net income (loss) per common share
Storage revenue and related services
374,749,506
377,962,879
(3,213,373)
383,424,053
390,881,796
(7,457,743)
-0.9%
-1.9%
376,930,150
385,604,697
378,051,496
(1,121,346)
390,970,412
(5,365,715)
-0.3%
-1.4%
$
(0.074)
$
(0.062)
$
(0.072)
$
(0.060)
$
(0.005)
$
(0.109)
$
(0.004)
$
(0.105)
For the three months ended December 31, 2023, the Corporation had revenues of $73.8 million (December 31, 2022 - $68.6
million), an increase of 7.5% for the quarter and contributing to a $26.8 million or 10.3% increase over fiscal 2022. This
increase is attributable to mainly to incremental revenue from organic revenue growth and from the stores acquired in the
prior fiscal year. For additional information, see “Segmented, Existing and New Self Storage and Portable Storage Results.”
Management fees
For the three months ended December 31, 2023, management fees increased by 7.2% over the same prior year period
resulting in a 7.5% increase for the fiscal year. The increase in management fees, while muted by the acquisition of managed
stores, is mainly a result of increases in revenue from managed stores.
Operating costs
Operating costs for the three months ended December 31, 2023 were $24.3 million (December 31, 2022 - $23.1 million)
resulting in a fiscal year increase of $9.3 million or 10.9% over fiscal 2022. The increase relate to stores acquired in 2022 and
mainly increases to costs in advertising, property taxes, repairs and maintenance and wages.
Net income (loss)
Our net loss of $27.8 million for the three months ended December 31, 2023 results from non-cash items of $25.3 million of
depreciation and amortization, $2.9 million in stock based compensation, $18.5 million of unrealized loss on derivative
financial instruments, $4.2 million of interest accretion on convertible debentures and $2.3 million of deferred tax recovery.
Net operating income
For the three months ended December 31, 2023, the Corporation had net operating income (NOI), a non-IFRS measure, of
$49.9 million (December 31, 2022 - $46.0 million), an increase of $3.9 million or 8.5% for the quarter and contributing to a
$17.6 million or 10.0% increase over fiscal 2022. The increase was achieved from increased rates through our revenue
management systems, controlling costs, NOI from assets purchased throughout fiscal 2023 and 2022 and from streamlining
and integration of operations.
Acquisition and integration costs
Acquisition and integration costs include costs and professional fees incurred to identify, qualify, close and integrate the
assets purchased and pending, as well as transactions that were not completed or we elected not to pursue. SVI completed
$94.6 million of acquisitions and announced an additional $35.5 million of transactions that we expect to close in 2024,
following completing $241.1 million of acquisitions in fiscal 2022 and $270.2 million of acquisitions in fiscal 2021.
Selling, general and administrative
Selling, general and administrative expenses include all expenses not related to the stores including corporate office overhead
and payroll, operations platform innovation and professional fees. These costs have increased as a result of increased activity
associated with the growth and anticipated future growth and changes in our business.
Stock based compensation
Relates RSUs, DSUs and to stock options issued to directors, officers and consultants under the Corporation’s stock option
plan and expense is estimated at the date of issue using the Black-Scholes option pricing model as detailed in Note 9 of the
accompanying notes to our audited fiscal 2023 financial statements.
Interest
Interest expense increased due to an increase in interest rates, on both fixed and variable rate debt. As at December 31,
2023, our debt was $1.4 billion compared to $1.5 billion at December 31, 2022. The decrease in debt is as result of the
issuance of $150 million 5.00% Convertible Senior Unsecured Debentures on January 9, 2023.
Interest accretion on convertible debentures
The convertible senior unsecured debentures are measured at the amortized cost, using the effective interest method until
extinguished upon conversion or at the instrument’s maturity date. The effective interest less the actual interest expense is
classified as interest accretion expense in the statement of income (loss) and comprehensive income (loss).
Depreciation and amortization
The slight decrease in depreciation and amortization expense is primarily due to the declining balance method of depreciating
assets and lower acquisitions in fiscal 2023 compared to fiscal 2022 and 2021.
Realized gain on real estate
The Corporation recognized a gain on the disposal of real estate and business related to an expropriation by a government
agency.
Realized and Unrealized (gain) loss on derivative financial instruments
The realized and unrealized (gain) loss on derivative financial instruments occurs as result of both the Interest Rate Swaps
and the Total Return Swaps which are held to hedge the Corporation’s debt; and DSUs, RSUs and Options, respectively. A
realized gain or loss is recorded when the Interest Rate Swaps or Total Return Swaps are terminated. An unrealized gain or
loss is recorded as a result of the fluctuations in the market interest rates and the Corporation’s share price.
11
12
71
ANNUAL REPORT 2023
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
FFO and AFFO are non-IFRS measures. They allow management and investors to evaluate the financial results of an entity
without taking into consideration the impact of non-cash items and non-recurring acquisition and integration costs and
realized gains or losses on real estate on the Statement of Income (Loss) and Comprehensive Income (Loss). Net income
(loss) assumes that the values of our assets diminish over time through depreciation and amortization, irrespective of the
value of our real estate assets in the open market. Other non-cash and non-recurring capital items include stock based
compensation costs, deferred income tax expenses (recoveries), realized and unrealized gain or loss on interest rate swap
contracts, realized and unrealized gain or loss on derivative financial instruments, interest accretion on convertible
debentures and acquisition and integration costs, if any. Acquisition and integration costs, adjusted for in our AFFO, are one
time in nature to the specific assets purchased or pending. While the specific acquisition and integration costs may vary from
period to period, given that the Corporation is planning to continue to complete acquisitions as part of its growth strategy,
these costs will continue to be included as an adjustment in determining AFFO (i.e. the amount of the costs are "non-
recurring" but the actual adjustment for these types of costs is "recurring" and relate to acquisitions pursued and completed).
FFO for the three months ended December 31, 2023 was $20.9 million versus $17.6 million for the same period in 2022, an
18.7% increase or 19.7% increase per basic common share outstanding. AFFO for the three months ended December 31,
2023 was $22.8 million versus $19.2 million for the same period in 2022, an 18.6% increase or 19.6% increase per basic
common share outstanding. The increases is a result of increase in NOI.
For the fiscal year, while we achieved $17.6 million or 10.0% in overall NOI growth, FFO growth of $9.5 million or 13.5% and
AFFO growth of $5.8 million or 7.3%, our fiscal 2023 FFO and AFFO results were muted by higher interest expense of $8.5
million compared to the same prior year period.
The FFO and AFFO for the three months and fiscal year ended December 31, 2023 and 2022 are:
(unaudited)
Three Months Ended December 31
(audited)
Fiscal
2023
2022
Change
2023
2022
Change
$
%
$
%
$
(27,786,974)
$
(23,265,493)
$
(4,521,481)
-19.4%
$
(1,700,158)
$
(41,241,957)
$
39,541,799
95.9%
Net income (loss)
Adjustments:
Stock based compensation
2,944,323
12,587,262
(9,642,939)
-76.6%
3,795,626
13,631,028
(9,835,402)
-72.2%
Interest accretion on convertible
debentures
Realized (gain) loss on real estate
Realized (gain) loss on derivative
financial instruments
Unrealized (gain) loss on derivative
financial instruments
4,195,644
87,689
(23,454)
-
-
-
4,195,644
87,689
(23,454)
-
-
-
4,195,644
(15,528,115)
(3,994,356)
-
-
-
4,195,644
(15,528,115)
(3,994,356)
-
-
-
18,458,800
(422,566)
18,881,366
-4468.3%
1,450,089
3,664,312
(2,214,223)
-60.4%
Deferred tax (expense) recovery
(2,292,414)
(5,452,549)
3,160,135
-58.0%
(8,636,454)
(9,584,739)
948,285
-9.9%
Depreciation and amortization
25,278,530
34,124,962
(8,846,432)
-25.9%
100,518,182
104,126,661
(3,608,479)
-3.5%
48,649,118
40,837,109
7,812,009
19.1%
81,800,616
111,837,262
(30,036,646)
-26.9%
FFO 1
Adjustments:
$
20,862,144
$
17,571,616
$
3,290,528
18.7%
$
80,100,458
$
70,595,305
$
9,505,153
13.5%
Acquisition and integration costs
1,959,784
1,666,565
293,219
17.6%
5,904,217
9,587,840
(3,683,623)
-38.4%
AFFO 1
1 Non-IFRS Measure.
$
22,821,928
$
19,238,181
$
3,583,747
18.6%
$
86,004,675
$
80,183,145
$
5,821,530
7.3%
FFO and AFFO Per Basic Common Share Outstanding
FFO
AFFO
$
0.056
$
0.046
$
0.009
19.7%
$
0.213
$
0.187
$
0.026
13.8%
$
0.061
$
0.051
$
0.010
19.6%
$
0.228
$
0.212
$
0.016
7.6%
72
13
ANNUAL REPORT 2023
Annualized Net Operating Income and Funds from Operations
The Company completed the purchase of 7 locations and 2 adjacent parcels of land and the revenues and operating expenses
from each acquisition are reflected in the statements from the date of acquisition forward for these stores. To understand a
full year of operations with the acquired assets, utilizing historical data, the following is an annualized NOI, FFO and AFFO (all
non-IFRS measures) statement annualizing the revenues and expenses as if the stores purchased in fiscal 2023, were
purchased as of January 1, 2023 and owned for the entire 12-month period.
The results of this annualized statement show that NOI, FFO and AFFO would be higher by $4.0 million, $3.7 million and $3.7
million, respectively. NOI would have been $197.6 million, FFO would be $83.8 million and the AFFO would be $89.7 million.
For the Year Ended December 31, 2023
Actual
Annualized Results
Incremental
Notes
Storage revenue and related services
$
286,687,556
$
292,222,963
$
5,535,407
Management fees
Property operating costs
Net operating income
Adjustments:
Acquisition and integration costs
Selling, general and administrative
Interest
2,037,056
288,724,612
95,131,868
193,592,744
5,904,217
24,290,628
83,297,441
113,492,286
2,037,056
294,260,019
96,652,357
197,607,662
5,904,217
24,512,044
83,389,579
113,805,840
-
5,535,407
1,520,489
4,014,918
-
221,416
92,138
313,554
Funds from Operations
80,100,458
83,801,822
3,701,364
Adjustment:
Acquisition and integration costs
5,904,217
5,904,217
-
Adjusted Funds from Operations
$
86,004,675
$
89,706,039
$
3,701,364
1
1
2
3
4
2
Note 1 – the results from all stores acquired in fiscal 2023, have been adjusted as if the purchase occurred on January 1, 2023.
For revenues, we assumed achieved occupancies and rent per square foot were repeated from the period prior to acquisition.
Information regarding expenses incurred during 2023 and prior to acquisition, has been sourced from due diligence materials
received during the acquisition process to determine a full year of operating costs.
Note 2 – these costs are one time in nature and do not change based on acquisition date.
Note 3 – based on existing scale and management infrastructure.
Note 4 – annualized amount determined based on interest rate and debt outstanding at December 31, 2023.
14
73
ANNUAL REPORT 2023
Segmented, Existing and New Self Storage and Portable Storage Results
The Corporation operates three reportable business segments - self storage, portable storage and management fees. Self
storage involves customers renting space at the Corporation’s property for short or long term storage. Portable storage
involves delivering a storage unit to the customer. The customer can choose to keep the portable storage unit at their location
or have it moved to one of our locations. Management fees are revenues generated from the management of stores owned
by third parties.
Revenue, operating costs and net operating income
(unaudited)
Three Months Ended December 31
(audited)
Fiscal
2023
2022
Change
2023
2022
Change
$
%
$
%
$
56,114,074
$
53,412,184
$
2,701,890
5.1%
$
220,710,547
$
210,510,124
$
10,200,423
Revenue
Existing Self Storage 1
New Self Storage 1
15,211,762
12,562,310
2,649,452
Total Self Storage
71,325,836
65,974,494
5,351,342
Portable Storage
Management Fees
2,424,468
518,609
2,631,498
(207,030)
483,861
34,748
Combined
74,268,913
69,089,853
5,179,060
Operating Costs
Existing Self Storage
16,876,711
16,063,929
New Self Storage
5,738,487
5,111,720
812,782
626,767
Total Self Storage
22,615,198
21,175,649
1,439,549
Portable Storage
1,721,642
1,893,341
(171,699)
Combined
24,336,840
23,068,990
1,267,850
Net Operating Income 1
Existing Self Storage
39,237,363
37,348,255
1,889,108
New Self Storage
9,473,275
7,450,590
2,022,685
Total Self Storage
48,710,638
44,798,845
3,911,793
Portable Storage
Management Fees
702,826
518,609
738,157
483,861
(35,331)
34,748
Combined
$
49,932,073
$
46,020,863
$
3,911,210
1 Non -IFRS Measure.
55,406,331
38,114,042
17,292,289
276,116,878
248,624,166
27,492,712
10,570,678
11,308,895
2,037,056
1,895,228
(738,217)
141,828
4.8%
45.4%
11.1%
-6.5%
7.5%
288,724,612
261,828,289
26,896,323
10.3%
66,062,969
21,838,405
87,901,374
62,523,396
3,539,573
15,477,552
6,360,853
78,000,948
9,900,426
7,230,494
7,793,399
(562,905)
95,131,868
85,794,347
9,337,521
154,647,578
147,986,728
6,660,850
33,567,926
22,636,490
10,931,436
188,215,504
170,623,218
17,592,286
3,340,184
2,037,056
3,515,496
1,895,228
(175,312)
141,828
$
193,592,744
$
176,033,942
$
17,558,802
5.7%
41.1%
12.7%
-7.2%
10.9%
4.5%
48.3%
10.3%
-5.0%
7.5%
10.0%
21.1%
8.1%
-7.9%
7.2%
7.5%
5.1%
12.3%
6.8%
-9.1%
5.5%
5.1%
27.1%
8.7%
-4.8%
7.2%
8.5%
Existing Self Storage
For the three months ended December 31, 2023, revenue and NOI increased by 5.1% and 5.1%, respectively, over the same
prior year period, resulting in a full year same store revenue and NOI growth of 4.8% and 4.5%. Revenue and NOI increases
are a result of continued execution of our revenue management program, despite lower period over period occupancies. For
operating costs, we continue to control costs through operational efficiencies, however we experienced increases in
advertising, property taxes, repairs and maintenance and wages.
New Self Storage
Increase is a result of our 2023 and 2022 acquisitions and non-stabilized acquisitions throughout 2021 resulting in revenue,
operating costs and NOI growth as we commenced reporting results.
Portable Storage
Revenue and NOI are lower due to lower period over period occupancies.
74
15
ANNUAL REPORT 2023
Segmented, Existing and New Self Storage and Portable Storage Results
The Corporation operates three reportable business segments - self storage, portable storage and management fees. Self
storage involves customers renting space at the Corporation’s property for short or long term storage. Portable storage
involves delivering a storage unit to the customer. The customer can choose to keep the portable storage unit at their location
or have it moved to one of our locations. Management fees are revenues generated from the management of stores owned
by third parties.
Revenue, operating costs and net operating income
(unaudited)
Three Months Ended December 31
(audited)
Fiscal
2023
2022
Change
2023
2022
Change
$
%
$
%
Revenue
Existing Self Storage 1
New Self Storage 1
$
56,114,074
$
53,412,184
$
2,701,890
5.1%
$
220,710,547
$
210,510,124
$
10,200,423
15,211,762
12,562,310
2,649,452
55,406,331
38,114,042
17,292,289
Total Self Storage
71,325,836
65,974,494
5,351,342
276,116,878
248,624,166
27,492,712
Portable Storage
Management Fees
2,424,468
518,609
2,631,498
(207,030)
483,861
34,748
10,570,678
11,308,895
2,037,056
1,895,228
(738,217)
141,828
Combined
74,268,913
69,089,853
5,179,060
288,724,612
261,828,289
26,896,323
10.3%
Operating Costs
Existing Self Storage
16,876,711
16,063,929
New Self Storage
5,738,487
5,111,720
812,782
626,767
Total Self Storage
22,615,198
21,175,649
1,439,549
66,062,969
21,838,405
87,901,374
62,523,396
3,539,573
15,477,552
6,360,853
78,000,948
9,900,426
Portable Storage
1,721,642
1,893,341
(171,699)
7,230,494
7,793,399
(562,905)
Combined
24,336,840
23,068,990
1,267,850
95,131,868
85,794,347
9,337,521
Net Operating Income 1
Existing Self Storage
39,237,363
37,348,255
1,889,108
154,647,578
147,986,728
6,660,850
New Self Storage
9,473,275
7,450,590
2,022,685
33,567,926
22,636,490
10,931,436
Total Self Storage
48,710,638
44,798,845
3,911,793
188,215,504
170,623,218
17,592,286
Portable Storage
Management Fees
702,826
518,609
738,157
483,861
(35,331)
34,748
3,340,184
2,037,056
3,515,496
1,895,228
(175,312)
141,828
Combined
$
49,932,073
$
46,020,863
$
3,911,210
$
193,592,744
$
176,033,942
$
17,558,802
1 Non -IFRS Measure.
Existing Self Storage
New Self Storage
Portable Storage
For the three months ended December 31, 2023, revenue and NOI increased by 5.1% and 5.1%, respectively, over the same
prior year period, resulting in a full year same store revenue and NOI growth of 4.8% and 4.5%. Revenue and NOI increases
are a result of continued execution of our revenue management program, despite lower period over period occupancies. For
operating costs, we continue to control costs through operational efficiencies, however we experienced increases in
advertising, property taxes, repairs and maintenance and wages.
Increase is a result of our 2023 and 2022 acquisitions and non-stabilized acquisitions throughout 2021 resulting in revenue,
operating costs and NOI growth as we commenced reporting results.
Revenue and NOI are lower due to lower period over period occupancies.
21.1%
8.1%
-7.9%
7.2%
7.5%
5.1%
12.3%
6.8%
-9.1%
5.5%
5.1%
27.1%
8.7%
-4.8%
7.2%
8.5%
4.8%
45.4%
11.1%
-6.5%
7.5%
5.7%
41.1%
12.7%
-7.2%
10.9%
4.5%
48.3%
10.3%
-5.0%
7.5%
10.0%
15
Quarterly net operating income
The Corporation’s quarterly results are affected by the timing of acquisitions, both in the current year and prior year. The
Corporation also incurs non-recurring initial expenses when a new location is acquired. These costs may include labor,
severance, training, travel, advertising and or office expenses.
The storage business is subject to seasonality. There is naturally more activity in the warmer months and less activity in the
colder months. Operating costs are higher during the winter months due to heating and snow removal costs resulting in
lower NOI margins in Q1 and Q4, versus Q2 and Q3. This is consistent with results experienced in the Northern US.
Fiscal 2023 ('000)
Fiscal 2022 ('000)
Q4
Q3
Q2
Q1
Total
Q4
Q3
Q2
Q1
Total
NOI 1
Existing Self Storage
$
39,237
$
42,290
$
38,650
$
34,471
$
154,648
$
37,348
$
40,400
$
37,809
$
32,429
$
147,987
New Self Storage
9,473
8,723
8,222
Total Self Storage
48,711
51,013
46,871
Portable Storage
Management Fees
703
519
1,149
515
1,011
529
7,150
41,621
477
474
33,568
188,216
3,340
2,037
7,451
44,799
738
484
6,836
47,236
1,326
481
5,061
42,871
959
517
3,288
22,636
35,718
170,623
493
413
3,515
1,895
$
49,932
$
52,678
$
48,411
$
42,572
$
193,593
$
46,021
$
49,043
$
44,346
$
36,624
$
176,034
1 Non-IFRS Measure
Existing Self Storage
The increase in Q4 2023 over Q4 2022 was driven from continued execution of our revenue management program and
controlling costs through operational efficiencies.
New Self Storage
SVI has acquired 7 locations plus 2 adjacent parcels of land in fiscal 2023 and 10 stores, 1 adjacent property and 3 records
management operations in fiscal 2022 and 29 stores in fiscal 2021. These additions have resulted in NOI growth quarter over
quarter as we commenced reporting results.
Portable Storage
NOI is lower due to lower period over period occupancies.
16
75
ANNUAL REPORT 2023
Summary of Quarterly Results (unaudited)
Net Income /
(Loss) per
share
($0.074)
Fully diluted
Net Income /
(Loss) per share
($0.072)
Period
2023 – Q4
2023 – Q3
2023 – Q2
2023 – Q1
Total 2023
2022 – Q4
2022 – Q3
2022 – Q2
2022 – Q1
Total 2022
2021 – Q4
2021 – Q3
2021 – Q2
2021 – Q1
Total 2021
2020 - Q4
2020 - Q3
2020 - Q2
2020 - Q1
Revenue
$74,268,913
$75,745,468
$71,292,759
$67,417,472
Net Income /
(Loss)
($27,786,974)
$16,378,937
$12,612,251
($2,904,372)
$288,724,612
($1,700,158)
$69,089,853
($23,265,493)
$69,323,716
($2,120,375)
$65,959,444
($7,278,364)
$57,455,276
($8,577,725)
$0.043
$0.033
($0.008)
N/A
($0.062)
($0.006)
($0.019)
($0.023)
$261,828,289
($41,241,957)
N/A
$56,845,289
$56,854,002
$51,701,291
($13,005,460)
($4,286,770)
($7,172,789)
$43,260,095
($11,400,073)
($0.035)
($0.012)
($0.019)
($0.031)
$208,660,678
($35,865,092)
N/A
$42,150,289
$40,053,371
$37,425,908
$35,834,354
($9,987,848)
($6,276,846)
($8,651,142)
($8,366,386)
($0.027)
($0.017)
($0.024)
($0.023)
Total 2020
$155,463,922
($33,282,222)
N/A
2019 - Q4
2019 - Q3
2019 - Q2
2019 - Q1
$37,174,365
$37,310,765
$34,255,855
$26,222,055
($11,563,878)
($9,399,776)
($16,310,988)
($8,843,827)
($0.032)
($0.026)
($0.045)
($0.025)
Total 2019
$134,963,040
($46,118,469)
N/A
2018 - Q4
2018 - Q3
2018 - Q2
2018 - Q1
$26,562,429
$25,733,852
$23,173,856
$20,913,462
($843,810)
($6,355,654)
($9,158,368)
($7,793,463)
($0.002)
($0.018)
($0.026)
($0.022)
Total 2018
$96,383,599
($24,151,295)
N/A
2017 - Q4
2017 - Q3 1
2017 - Q2
2017 - Q1 1
Total 2017
2016 - Q4
2016 - Q3
2016 - Q2
2016 - Q1
$20,744,110
$18,453,960
$12,557,306
$10,133,138
$15,343,505
($15,402,377)
($2,995,895)
($10,797,865)
$0.044
($0.046)
($0.010)
($0.037)
$61,888,514
($13,852,632)
N/A
$8,900,182
$7,307,070
$6,320,322
$5,296,970
($18,657,288)
($537,379)
($663,764)
($1,331,005)
($0.070)
($0.022)
($0.004)
($0.008)
Total 2016
$27,824,544
($21,189,436)
N/A
2015 - Q4
2015 - Q3
2015 - Q2
2015 - Q1
$4,795,266
$3,137,527
$2,111,281
$1,096,513
($2,702,281)
($821,330)
($677,127)
($374,472)
($0.026)
($0.012)
($0.012)
($0.010)
Total 2015
$11,140,587
($4,575,210)
N/A
Total Assets
$2,044,217,956
$1,997,703,262
$1,988,295,493
$2,019,426,187
Total Liabilities
$1,848,344,223
$1,783,807,524
$1,778,917,293
$1,819,889,288
N/A
N/A
$2,020,752,160
$1,813,597,057
$2,014,223,967
$1,793,844,969
$2,019,833,429
$1,793,878,037
Dividends
$1,076,487
$1,073,547
$1,075,022
$1,069,922
$4,294,978
$1,064,875
$1,059,674
$1,055,547
$1,874,780,768
$1,640,438,694
$1,050,674
N/A
N/A
$4,230,770
$1,836,156,209
$1,710,707,686
$1,693,800,047
$1,610,798,998
$1,613,949,693
$1,503,314,182
$1,487,413,665
$1,403,279,361
N/A
N/A
$1,587,379,939
$1,354,801,560
$1,369,097,150
$1,371,022,824
$1,377,204,772
$1,149,197,801
$1,155,700,318
$1,151,432,603
$1,034,371
$1,021,120
$1,012,517
$1,002,868
$4,070,876
$991,452
$978,240
$973,985
$966,317
N/A
N/A
$3,909,994
$1,392,865,962
$1,377,237,690
$1,385,491,977
$1,044,914,091
$1,162,117,984
$1,134,721,033
$1,132,963,923
$794,584,280
$961,654
$958,230
$952,321
$930,288
N/A
N/A
$3,802,493
$1,022,791,417
$990,262,630
$959,256,102
$922,656,903
$761,864,860
$731,939,098
$694,025,713
$661,214,665
$925,235
$920,981
$920,562
$889,786
N/A
N/A
$3,656,564
$895,496,381
$839,525,204
$400,216,946
$404,743,767
$627,421,264
$585,777,091
$237,005,503
$238,025,850
$880,328
$879,376
$765,016
$749,946
N/A
N/A
$3,274,666
$342,803,581
$253,955,856
$179,885,223
$176,728,097
$187,115,587
$131,931,530
$118,343,352
$114,010,014
$724,931
$630,309
$440,398
-
N/A
N/A
$1,795,638
$171,486,477
$108,865,822
$54,449,748
$27,910,360
N/A
$112,922,559
$85,594,955
$25,372,609
$25,033,929
N/A
-
-
-
-
-
$0.040
$0.030
($0.008)
N/A
($0.062)
($0.006)
($0.019)
($0.023)
N/A
($0.035)
($0.012)
($0.019)
($0.031)
N/A
($0.027)
($0.017)
($0.024)
($0.023)
N/A
($0.032)
($0.026)
($0.045)
($0.025)
N/A
($0.002)
($0.018)
($0.026)
($0.022)
N/A
$0.044
($0.046)
($0.010)
($0.037)
N/A
($0.070)
($0.022)
($0.004)
($0.008)
N/A
($0.026)
($0.012)
($0.012)
($0.010)
N/A
Note 1:
The Corporation reversed $12,420,000 of goodwill impairment taken in Q1 2017 and Q3 2017.
The Q1 2017 goodwill impairment that was recorded was $5,361,176, and as a result, Q1 2017 previously reported net loss of $10,797,865, would have been $5,436,689 without such goodwill impairment.
The Q3 2017 goodwill impairment that was recorded was $7,058,823, and as a result, Q3 2017 reported net loss of $15,402,377 would have been $8,343,553 without such goodwill impairment.
The previously reported Total Assets for Q1 2017 of $404,743,767 would have been $410,104,943. The previously reported Total Assets for Q2 2017 of $400,216,946 would have been $405,578,122. The
previously reported Total Assets for Q3 2017 of $839,525,204 would have been $851,945,204.
76
17
ANNUAL REPORT 2023
WORKING CAPITAL, DEBT AND SHARE CAPITAL
Working Capital
Cash provided by operating activities was $85.8 million for fiscal 2023, compared to $76.4 million for fiscal 2022. The increase
arises from increased rates through our revenue management systems, continued streamlining and integration of operations
and controlling costs.
As at December 31, 2023, the Corporation had $13.9 million of cash compared to $22.5 million at December 31, 2022. The
decrease in cash is due to managing cash flow to minimize interest expense, acquisitions, expansions, capital improvements
and the repurchase of the Corporation’s common shares. The Corporation expects its cash flow from operations to continue
to increase as we continue to execute our operational plans and the full benefit of recently purchased stores are realized. In
addition, the Corporation will borrow against existing assets to fund acquisitions and its expansion plans.
Debt
As at December 31, 2023 and December 31, 2022, the Corporation held the following debt:
December 31, 2023
Weighted
Average
Rate
Range
Balance
December 31, 2022
Weighted
Average
Rate
Range
Balance
Mortgages
At amortized cost - Fixed
2.84% to 9.20%
Maturity: Mar 2025 to Dec 2029
5.13%
306,666,120
2.84% to 4.98% 4.48%
Maturity: Apr 2023 to Dec 2029
251,048,897
At amortized cost - Variable
7.56%
7.47% to 8.20%
Maturity: Jan 2024 to Jul 2024
26,490,427
7.45% to 8.60% 8.08%
Maturity: Feb 2023 to Jul 2024
84,653,250
At FVTPL - Variable
- Fixed via interest rate swap
747,907,274
(15,112,904)
732,794,370
4.74%
783,891,417
(32,836,542)
751,054,875
4.31%
Maturity: Apr 2024 to Jan 2031
Maturity: Jan 2024 to Jan 2031
4.92%
1,065,950,917
4.65%
1,086,757,022
Lines of Credit and Promissory Notes
At amortized cost - Fixed
Maturity: Mar 2025
Maturity: Dec 2023
4.50%
500,000
3.50%
4,000,000
At amortized cost - Variable
7.73%
50,000,000
7.28%
140,618,468
Maturity: Dec 2024 to Feb 2025
Maturity: Jun 2023 to Oct 2025
At FVTPL - Variable
- Fixed via interest rate swap
308,871,737
(8,871,737)
300,000,000
3.88%
314,288,134
(14,288,134)
300,000,000
3.88%
Maturity: Feb 2025
Maturity: Feb 2025
4.43%
350,500,000
4.95%
444,618,468
Deferred financing costs, net of accretion
(3,742,768)
(4,655,721)
4.80%
1,412,708,149
4.73%
1,526,719,769
18
77
ANNUAL REPORT 2023
Reconciliation of Debt
The following table reconciles the changes in cash flows from financing activities for the Corporation's debt:
Debt, beginning of period
$
1,526,719,769
$
1,332,474,745
December 31, 2023
December 31, 2022
Advances from debt
Repayment of debt
Amounts offset against accounts receivable
Change in fair value of debt measured at FVTPL
Change in fair value of interest rate swaps
Total cash flow from debt financing activities
Change in deferred financing costs
286,760,989
(401,685,562)
-
23,140,035
(23,140,035)
-
(114,924,573)
912,953
610,341,010
(409,662,963)
(6,486,464)
(60,949,884)
60,949,884
194,191,583
53,441
Debt, end of period
$
1,412,708,149
$
1,526,719,769
The bank prime rate at December 31, 2023 was 7.20% (December 31, 2022 - 6.45%). The weighted average cost of debt at
December 31, 2023 is 4.80% (December 31, 2022 - 4.73%). The Corporation’s variable interest rate exposure is limited with
only 5.40% of debt being variable and the balance being fixed interest rate debt.
The weighted years to maturity, excluding lines of credit, at December 31, 2023 is 4.00 years (December 31, 2022 – 4.26
years).
Mortgages are secured by a first mortgage charge on the real estate and equipment of the Corporation, general security
agreements, assignment of rents and leases and assignments of insurance coverages. The Corporation must maintain certain
financial ratios to comply with the facilities. These covenants include debt service coverage ratios, a tangible net worth ratio,
and a loan to value ratio. As of December 31, 2023 and December 31, 2022, the Corporation is in compliance with all
covenants.
The deferred financing costs are made up of fees and costs incurred to obtain the related mortgage financing, less
accumulated amortization into income of these costs.
Principal repayments on mortgages, lines of credit and promissory notes in each of the next five years are estimated as
follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
$
$
$
$
$
$
448,302,885 (includes lines of credit and promissory note of $350.0 million)
178,944,623
45,300,549
152,308,388
387,200,322
204,394,150
Of the repayments shown in Year 1, $23.8 million are required under our amortizing term debt mortgages, $74.5 million
relates to loans due in the upcoming twelve months that are expected to be refinanced, and $350.0 million relates to our
lines of credit. Our lines of credit are covenant based (debt service coverage ratios, tangible net worth ratios, and loan to
value ratios) and do not require repayment as long as the covenants are met. As of December 31, 2023 and December 31,
2022, the Corporation is in compliance with all covenants.
The Corporation terms out assets on our lines of credit when deemed appropriate, which includes determination that the
Corporation has been able to implement its operating systems to increase the value of the assets and that the Corporation
has an appropriate mix of assets supporting our lines of credit. The Corporation’s detailed debt maturity profile as at
December 31, 2023 is:
78
19
ANNUAL REPORT 2023
Contractual Mortgage Maturities and Interest Rates
Year of Debt
Maturity
2024
2025
2026
2027
2028
Thereafter
Mortgages Payable
$
74,502,885
156,441,283
23,498,716
141,738,557
428,483,814
241,285,662
1,065,950,917
$
Weighted
Average
Interest
Rate
5.20%
5.78%
3.54%
4.92%
4.84%
4.56%
4.92%
Lines of Credit
$
43,000,000
307,500,000
-
-
-
-
$
350,500,000
Weighted
Average
Interest Rate
7.72%
3.97%
0.00%
0.00%
0.00%
0.00%
4.43%
$
Total Debt
117,502,885
463,941,283
23,498,716
141,738,557
428,483,814
241,285,662
1,416,450,917
$
Weighted
Average
Interest
Rate
6.12%
4.58%
3.54%
4.92%
4.84%
4.56%
4.80%
Deferred financing costs net of accretion
Balance
(3,742,768)
$
1,412,708,149
The Corporation entered into interest rate swap contracts in order to fix the interest rate on $1 billion of debt at a weighted
average rate of 4.49%. On $447 million of this debt, the bank entered into interest rate swap cancellation agreements,
allowing them to cancel the original swap agreements between April 8, 2024 and October 27, 2025.
Debentures
2020 Hybrid Debentures
On July 20, 2020, $75 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture with a
term of sixty-six months, due January 31, 2026. These debentures bear a fixed interest rate of 5.75% per annum, payable
semi-annually in arrears on January 31 and July 31 of each year, commencing January 31, 2021. The intended use of the net
proceeds of the debentures is to pay down the credit facility and fund anticipated capital expenditures.
On and after January 31, 2024 and prior to January 31, 2025, the debentures will be redeemable in whole or in part from time
to time at the Corporation’s option at a redemption price equal to 102.875% of the principal amount of the debentures
redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and after January 31,
2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time to time at the
Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set for redemption.
On redemption or at maturity on January 31, 2026, the Corporation may elect to, in whole or part, convert the debentures
into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000 due, that number
of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date fixed for redemption or
maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $75 million net of
deferred financing costs of $3.5 million. Each embedded feature was evaluated separately and it was determined that the
economic and risk characteristics are closely related to the host contract and therefore were not accounted for as separate
financial instruments.
2021 Hybrid Debentures
On July 19, 2021, $57.5 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture with a
term of sixty-six months, due September 30, 2026. These debentures bear a fixed interest rate of 5.5% per annum, payable
semi-annually in arrears on March 31 and September 30 of each year, commencing September 30, 2021. The intended use
of the net proceeds of the debentures is to fund potential future opportunities and for general corporate purposes.
On and after September 30, 2024 and prior to September 30, 2025, the debentures will be redeemable in whole or in part
from time to time at the Corporation’s option at a redemption price equal to 102.750% of the principal amount of the
debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and after
20
79
ANNUAL REPORT 2023
September 30, 2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time to time
at the Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set for redemption.
On redemption or at maturity on September 30, 2026, the Corporation may elect to, in whole or part, convert the debentures
into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000 due, that number
of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date fixed for redemption or
maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $57.5 million net
of deferred financing costs of $2.5 million. Each embedded feature was evaluated separately and it was determined that the
economic and risk characteristics are closely related to the host contract and therefore were not accounted for as separate
financial instruments.
2023 Convertible Debentures
On January 9, 2023, $150 million of convertible senior unsecured debentures were issued at a price of $1,000 per debenture
with a term of sixty-six months, due March 31, 2028. These debentures bear a fixed interest rate of 5% per annum, payable
semi-annually in arrears on March 31 and September 30 of each year, commencing March 31, 2023. The intended use of the
net proceeds of the debentures is to fund potential future opportunities and for general corporate purposes.
On and after March 31, 2026 and prior to March 31, 2027, the debentures will be redeemable in whole or in part from time
to time by the Corporation at a redemption price equal to 125% of the principal amount of the debentures redeemed plus
accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and after March 31, 2027 and prior
to the maturity date, the debentures will be redeemable, in whole or in part, from time to time at the Corporation’s option
at par plus accrued and unpaid interest, if any, up to but excluding the date set for redemption.
On redemption or at maturity on March 31, 2028, the debentures will be convertible into freely tradeable common shares of
the Corporation at the option of the holder at a conversion price of $8.65 per share.
The debentures were recorded as a financial instrument at a fair value of $150 million, net of deferred financing costs of $6.0
million, an equity component of $18.2 million, and a deferred tax liability of $4.7 million. The equity component of the
convertible debentures relates to the portion of the debentures' value that is attributed to the conversion option, which
allows the holder to convert the debentures into common shares of the Corporation.
The debentures are subsequently measured at amortized cost using the effective interest method over the life of the
debenture. The balance of the debentures is:
December 31, 2023
December 31, 2022
Opening balance
Additions during period
Issuance costs
Equity component of
convertible debentures
Accretion during period
Interest payable
Debentures repurchased
Ending balance
$
128,682,883
150,000,000
(6,009,911)
(18,245,003)
5,326,643
1,871,047
(188,000)
261,437,659
$
$
127,551,885
-
-
-
1,130,998
-
$
128,682,883
80
21
ANNUAL REPORT 2023
Share Capital
The common shares issued are:
Balance, December 31, 2021
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
RSU/DSU redemption
Common shares repurchased
Balance, December 31, 2022
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
Common shares repurchased
Balance, December 31, 2023
Number of Shares
Amount
374,636,443
$
406,565,894
4,171,246
306,499
661,151
94,421
(1,852,400)
27,000,000
1,829,905
(448,659)
632,798
(10,625,564)
378,017,360
424,954,374
681,601
252,145
5,000
(4,395,798)
4,250,000
1,441,790
(5,038,500)
(21,562,655)
374,560,308
$
404,045,009
Dividend Reinvestment Plan
Represents common shares issued under the Corporation’s dividend reinvestment plan (“DRIP") for holders of common
shares. Under the terms of the DRIP, eligible registered holders of a minimum of 10,000 Common Shares (the "Shareholders")
may elect to automatically reinvest their cash dividends, payable in respect to the common shares, to acquire additional
common shares, which will be issued from treasury or purchased on the open market. The Corporation may initially issue up
to 5,000,000 common shares under the DRIP, which may be increased upon Board of Directors approval, acceptance of the
increase by the Exchange, and upon public disclosure of the increase.
Stock Options
A total of 36,587,000 options were outstanding as at December 31, 2023 (December 31, 2022 – 36,342,000). Of the
outstanding amount, 36,587,000 options were exercisable (December 31, 2022 – 36,342,000). The details are as follows:
Exercise Price
$
0.41
$
0.50
$
1.36
$
1.78
$
2.52
$
2.90
$
3.98
$
6.31
$
5.94
$
5.23
Options exercisable and outstanding
Vesting Date
Apr. 28, 2015
Sep. 14, 2015
Dec. 21, 2016
Mar. 16, 2017
May 4, 2018
May 28, 2019
Dec. 15, 2020
Dec. 20, 2021
Dec. 19, 2022
Dec. 28, 2023
Expiry Date
Apr. 28, 2025
Sep. 14, 2025
Dec. 21, 2026
Mar. 16, 2027
May 4, 2028
May 28, 2029
Dec. 15, 2030
Dec. 20, 2031
Dec. 19, 2032
Dec. 28, 2033
December 31, 2023 December 31, 2022
1,125,500
1,480,000
2,770,000
2,795,000
2,810,000
5,764,000
5,858,000
6,767,500
6,972,000
1,125,500
1,305,000
2,620,000
2,645,000
2,660,000
5,376,500
5,515,500
6,767,500
6,972,000
1,600,000
36,587,000
-
36,342,000
The Board of Directors of the Corporation may from time to time, at its discretion, and in accordance with the Exchange
requirements, grant to directors, officers, employees and consultants of the Corporation, non-transferable options to
purchase common shares.
Equity Incentive Plan
Under the Corporation’s Equity Incentive Plan passed on May 30, 2018 (the “Plan”), directors, employees and consultants are
eligible to receive awards, in the form of Restricted Share Units (“RSUs”), Deferred Share Units (“DSUs”) and Named Executive
Officer Restricted Share Units (“Neo RSUs”), as and when granted by the Board, at its sole discretion. The maximum number
of awards that may be issued under the Plan is 17,545,677. The maximum number of shares that may be reserved for issuance
22
81
ANNUAL REPORT 2023
under the Plan, together with any of the Corporation’s other share-based compensation arrangements, may not exceed 10%
of the issued shares of the Corporation.
The RSUs and DSUs granted vest in equal annual amounts over three years. The Neo RSUs vest three years after the date of
grant. RSUs, DSUs and Neo RSUs are entitled to be credited with dividend equivalents in the form of additional RSUs, DSUs
and Neo RSUs, respectively.
With certain exceptions, the Plan provides that (i) the maximum number of awards that may be granted to any one participant
together with any other share-based compensation arrangements, in any 12 month period, may not exceed 5% of the issued
shares, and, in the case of any consultant, may not exceed 2% of the issued shares; and (ii) the total value of all securities that
may be issued to any non-employee director under all of the Corporation’s security based compensation arrangements may
not exceed $150,000 per annum.
The Corporation entered into Total Return Swaps (“TRS”) as economic hedges of the Corporation’s DSUs and RSUs. Under
the terms of the TRS, a bank has the right to purchase the Corporation’s shares in the marketplace as a hedge against the
returns in the TRS. At December 31, 2023, 3,486,628 TRS were outstanding at a value of $2,141,355 (December 31, 2022 –
3,081,360 TRS were outstanding at a value of $4,700,494).
At December 31, 2023, 100% of the combined DSU and RSU exposures were economically hedged. Hedge accounting is not
applied for the DSU/RSU hedging program.
During the year ended December 31, 2023, the Corporation issued 160,176 common shares at a value of $1,007,507
(December 31, 2022 – 266,268 common shares at a value of $1,786,852) under the Plan. A total of 980,328 common shares
at a value of $4,923,332 were outstanding at December 31, 2023 (December 31, 2022 – 1,123,429 common shares at a value
of $5,069,112).
CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
Lease Liabilities
The Corporation leases buildings and land in British Columbia, Alberta, Manitoba, Ontario and Quebec. The leases expire
between 2026 and 2057, with the leases expiring in 2024 and 2027 having up to 5 years and 20 years of renewals, respectively,
which are expected to be exercised by the Corporation.
The lease liabilities are measured at the present value of the lease payments that are not paid at the balance sheet date.
Lease payments are apportioned between interest expense and a reduction of the lease liability using the Corporation’s
incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liability.
For the year ended December 31, 2023, the Corporation recognized $3,668,569 (December 31, 2022 - $3,035,180) in interest
expense related to its lease liabilities.
A reconciliation of the lease liabilities associated with self storage properties is as follows:
December 31, 2023
December 31, 2022
Balance, beginning of period
Additions and reassessments
Cash payments
Interest
Capitalized interest
Balance, end of period
$
80,518,572
23,416,757
(7,887,925)
3,668,569
$
99,715,973
-
$
$
77,094,742
6,356,372
(6,181,239)
3,035,180
213,517
80,518,572
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Contingency
The Corporation has no legal contingency provisions at December 31, 2023 or December 31, 2022.
Off-Balance Sheet Arrangements
The Corporation is not party to any industry contracts or arrangements other than those disclosed in the financial statements.
RELATED PARTY TRANSACTIONS
The Corporation holds a Master Franchise Agreement from Canadian PUPS Franchises Inc. (CPFI) which provides the
Corporation with the exclusive Canadian franchise rights for the development and operation of portable storage throughout
Canada. CPFI is a corporation related to Iqbal Khan and Steven Scott who are directors of the Corporation. The Corporation
pays a monthly royalty of 3.5% on the gross sales. During the year ended December 31, 2023, the Corporation paid $382,400
(December 31, 2022 - $405,196) for royalties and $3,054,716 (December 31, 2022 - $3,046,665) for storage containers and
other equipment under the Master Franchise Agreement.
Included in accounts payable and accrued liabilities, relating to the previously noted transactions, at December 31, 2023 was
$52,758 (December 31, 2022 - $58,225) payable to CPFI.
The Corporation has management agreements with Access Self Storage Inc. and related companies (“Access Group”). These
companies are related to Iqbal Khan and Steven Scott who are directors of the Corporation. The Corporation invoices the
Access Group for management fees as well as additional services it provides as part of the management agreements. The
Access Group will also invoice the Corporation for construction, maintenance and other services related to its day-to-day
operations.
During the year ended December 31, 2023, the Corporation received $6,017,053 (December 31, 2022 - $8,471,116) in
payments and reimbursements related to the management agreements. During the year ended December 31, 2023, the
Corporation also incurred $50,583,697 (December 31, 2022 - $32,508,783) in expenditures related to construction,
maintenance and other services related to its day-to-day operations.
Included in accounts payable and accrued liabilities as at December 31, 2023 was $2,790,800 (December 31, 2022 - $522,072)
payable to the Access Group. Included in accounts receivable as at December 31, 2023 was $1,030,452 (December 31, 2022
- $846,587) receivable from the Access Group.
Key management personnel are those persons having authority and responsibility for planning, directly and indirectly
directing, and controlling the activities of the Corporation. Key management personnel are defined as officers and Directors
of the Corporation. The remuneration of key management personnel for employment services rendered are as follows:
December 31, 2023
December 31, 2022
Wages, management fees, bonuses and directors fees
Stock based compensation
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
$
$
1,324,495
1,047,580
2,372,075
$
$
610,212
6,065,672
6,675,884
At StorageVault, we consider environmental sustainability, social responsibility, and commitment to strong corporate
governance practices as core values and the foundation of what we do day-in and day-out. Our ongoing efforts involve
reducing the already minimal environmental impact of our stores, enhancing engagement with colleagues and shareholders,
supporting the over 100 communities in which we operate, and upholding sound corporate governance practices. Together
with our business objectives, these core values ensure we continuously deliver strong and sustainable results for all
stakeholders.
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ANNUAL REPORT 2023
Environmental
We hold the belief that sustainability and success are intertwined, and to prosper as a business, we must contribute positively
to our communities. As a community-based business, we recognize our responsibility to implement sustainable operating
practices, aiming to minimize our impact and preserve the environment while enhancing the performance of our portfolio.
Our objective is to positively impact the environment, our communities, shareholders, the broader self-storage industry, and
future generations.
In our commitment to energy conservation, we strategically offer a mix of square footage, including non-climate controlled
and temperature-controlled spaces. For properties with temperature-controlled storage, we regulate temperatures to ensure
the safety of stored contents while minimizing energy consumption for heating or cooling. Non-climate-controlled areas have
minimal environmental effects. This not only reduces our usage, but our expenses as well, benefiting all stakeholders.
We continually implement forward-thinking energy-saving initiatives, such as using geothermal heating systems, rooftop
solar panels, solar walls, motion-activated lighting systems, and the retrofitting of older fixtures with modern, energy-efficient
alternatives. Water usage at our properties is at very low levels. Furthermore, we source and sell packing supplies made from
recycled materials, and our digital rental process has significantly reduced paper usage.
The self-storage industry has the lowest environmental impact for energy consumption, water usage, and waste production
when compared to all other real estate asset classes. The storage industry has an inherently low environmental impact due
to its minimal daily activity levels compared to other commercial properties dues to the limited daily client activity and traffic
which contribute to minimizing our carbon footprint within our communities.
Energy Reduction and Generation
over 90% of all properties have motion sensor lighting, allowing for usage on-demand
80% of interior and 60% of exterior lighting have been retrofitted with LED lighting
automated and self-adjusting internal thermostat temperature controls
use of geothermal heating and cooling systems - geothermal heating systems use the earth as a heating and cooling
source; geothermal heat pumps are among the most energy-efficient technologies for providing HVAC and water
heating, using far less energy than traditional systems
energy efficient HVAC systems
solar power generation using roof top and solar walls
all new roofs installed or replaced are reflective “cool” roofs that help minimize energy consumption
use of in-floor radiant heating
Green Building Design and Construction Practices
all new construction projects are built using energy efficient windows
use of SolarWall systems or insulated metal panels used in construction of new and retrofitted buildings
replacing standard exterior storage doors with energy efficient doors
insulated foundation walls to help maintain and keep the foundation slab warm
proposed acquisitions are subject to environmental site assessments prior to the closing
Waste Reduction and Recycling
RecordXpress, our paper shredding and recycling division, recycled over 9.89 million pounds of paper; saving 430,000
trees, diverting 96,000 cubic meters from landfills and pre-emptively eliminating 193,000 barrels of oil required to
harvest the raw product
sale of moving and packaging supplies made from recycled materials
garbage and waste recycling at our stores and corporate offices
digital rental process that reduces paper usage through more efficient technology options
electronic recycling and e-waste reduction program for decommissioned computer equipment that either donates
refurbished equipment to local charities or recycles equipment that cannot be repurposed
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ANNUAL REPORT 2023
Water Reduction and Conservation
one washroom per property, on average, given low occupant levels and client activity at our properties
low flow and energy efficient plumbing systems and appliances
low-water irrigation systems
landscaping using native and drought-tolerant species
water run-off controls
storm water retention
Social
At StorageVault, our foremost commitment is to support both our colleagues and the communities in which we reside and
operate. With over 800 colleagues across more than 100 communities throughout Canada, we express gratitude for the
privilege of being a part of these diverse locales. In 2023, we proudly supported over 250 community organizations; working
together to create meaningful and enduring impacts.
Engagement and Wellbeing
StorageVault is dedicated to fostering a culture that prioritizes wellbeing, promotes healthy practices, and supports work-life
balance. Central to our philosophy is a strong belief in developing and retaining talented people. We emphasize active
engagement from management at all levels, fostering connections between colleagues, clients, the board, and other
stakeholders. Our conviction is rooted in the belief that by prioritizing the wellbeing of our colleagues, we enable our team
to reciprocate that care towards our clients, our stores and our communities. Engagement and Wellbeing Highlights include:
Wellness Wednesdays - a monthly webinar for all our colleagues with topics including finance, wellness, meditation,
exercise, mental health and hobbies.
Change Committee – our self storage team members have established a volunteer committee that convenes
monthly to offer feedback on presented topics or propose ideas that would benefit the organization. Some
successful ideas that have been implemented include those related to health & safety, communications and training.
Training and Career Development - our dedicated Corporate Training team has created an industry leading program
for our New Hires. In addition to New Hire training, our team hosts Monthly All-Store webinars and offer specialized
sessions for Store Managers (teaching leadership, customer service and wellness skills) as part of our Elite Academy
Sessions to support career development.
We provide competitive health and insurance benefits, employee assistance programs, paid time off, and leave of
absence and bereavement support.
Bonus opportunities are based on individual, store and corporate performance.
We organize incentive programs such as our Step Challenge, which encourages our employees to meet step goals to
help promote a healthier lifestyle.
Annual corporate events including Family Bowling, Pot-Luck Lunches and Christmas parties
Supporting our Communities
At StorageVault, we take great pride in fostering long-term, sustainable relationships that make a difference year over year.
In 2023, our commitment to Canadian communities was steadfast as we aligned with not-for-profit agencies and grassroots
organizations to provide tangible support for meaningful outcomes. With emphasis placed on our five community pillars:
food security, healthcare, education, sports, and the arts, we work intimately with over 250 local, regional and national
partners to enhance their ability to support communities. We strategically align and leverage the power and influence of our
national partners, using their reach to elevate our grassroots partners in need which results in enhanced support.
As a Canadian company, our passion and desire to be there for our colleagues, clients, and communities has never been
greater. We are incredibly grateful to be able to support our fellow Canadians from coast to coast.
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ANNUAL REPORT 2023
Governance
StorageVault’s Board and Management recognize the importance of equality, diversity and is dedicated to maintaining the
highest governance standards, which is exemplified through the following:
Increased our Board of Directors from 5 to 6 members
o 66% of our directors are independent
Diverse Board and Management team
o 50% Board Diversity (gender and race)
o 33% of our directors are female
o 52% of our senior management are female
Annual Board review and vote to approve executive compensation
Annual election of Directors by shareholders at AGM
Acquisition Committee Mandate to review, approve and recommend transactions to the Board
Regular review, update and re-approval by our Board of all Corporate Governance mandates, principles and policies:
Tri-annual approval of the Stock Option Plan by shareholders at AGM
Independent Director led Audit, Acquisition and Governance, Nominating and Compensation Committees
o Charter of the Audit Committee
o Charter of the Board of Directors
o Charter of the Governance, Nominating and Compensation Committee
o Code of Business Conduct (mandatory for all employees)
o Disclosure and Confidentiality Policy
o Diversity Policy
o
o Majority Voting Policy
o Whistleblower Policy
Insider Trading and Reporting Policy
We are extremely proud to once again have been recognized in The Globe and Mail’s 2023 Report on Business Women Lead
Here list. This annual editorial benchmark identifies best-in-class executive gender diversity in corporate Canada. This award
recognizes StorageVault’s shared vision for equity and inclusion among the other honorees. It is StorageVault’s continued
desire to promote strong leadership in our workplace and within communities across Canada.
With StorageVault’s graduation to the TSX in 2022, we have adopted more stringent compliance requirements which include
but are not limited to additional audit scrutiny and testing to ensure that our corporate policies, practices and accounting
standards are met. To ensure good governance practices and transparency for all our stakeholders, StorageVault’s corporate
policies, mandates and charters are publicly accessible on our corporate website.
StorageVault is committed to supporting and providing stability to assure the long-term interests of all stakeholders through
strong corporate governance practices.
ACQUISITION COMMITTEE AND ACQUISITION COMMITTEE MANDATE
The Corporation may, from time to time, purchase assets from parties related to the Corporation, and in particular, assets or
shares owned or controlled by management of the Corporation or Access Self Storage Inc. (Access) or any of its subsidiaries
or affiliates. To govern such potential related party transactions, the Corporation has established an Acquisition Committee
and an Acquisition Committee Mandate.
The Acquisition Committee is comprised of six voting members, four members being independently appointed and
independent of management and two of which are appointed by Access. Acquisition Committee members who are deemed
to be in a conflict of interest position with respect to related party transactions are required to abstain from voting on such
related party transactions.
The mandate of the Corporation’s Acquisition Committee is to review, evaluate, and approve the terms of proposed
acquisitions in the context of the current strategic direction of the Corporation. In particular, and with respect to related party
property acquisitions, the Acquisition Committee has the authority to appoint appraisers, environmental consultants, and
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professional advisors to evaluate and report to the Acquisition Committee on the suitability of such transactions. Thereafter,
the Acquisition Committee provides its recommendation as to whether the Board of Directors should approve an acquisition.
The Board of Directors of the Corporation must accept the recommendations that the Acquisition Committee makes with
respect to any related party transaction, and in particular, an acquisition involving assets or shares of Access or any of its
subsidiaries or affiliates.
ACCOUNTING POLICIES
The Corporation’s significant accounting policies are summarized in Note 3 to the December 31, 2023 annual audited financial
statements. There has been no change in significant accounting policies from the Corporation’s audited annual audited
financial statements from December 31, 2022. In addition, there has been no change in the Company’s financial instrument
risks.
Non-IFRS Financial Measures
Management uses both IFRS and Non-IFRS measures to assess the Corporation’s operating performance. In this MD&A,
management uses the following terms and ratios which do not have a standardized meaning under IFRS and are unlikely to
be comparable to similar measures presented by other companies:
i.
ii.
iii.
iv.
Net Operating Income (“NOI”) – NOI is defined as storage and related services less operating costs. NOI does not
include interest expense or income, depreciation and amortization, selling, general and administrative costs,
acquisition and integration costs, stock based compensation costs or taxes. NOI assists management in assessing
profitability and valuation from principal business activities.
Funds from Operations (“FFO”) – FFO is defined as net income (loss) excluding gains or losses from the sale of
depreciable real estate, plus depreciation and amortization, realized gains or losses on real estate, realized and
unrealized gains or losses on interest rate swaps, interest accretion on convertible debentures, realized and
unrealized (gain) or loss on derivative financial instruments, stock based compensation expenses, and deferred
income taxes; and after adjustments for equity accounted entities and non-controlling interests. FFO should not be
viewed as an alternative to cash from operating activities, net income, or other measures calculated in accordance
with IFRS. The Corporation believes that FFO can be a beneficial measure, when combined with primary IFRS
measures, to assist in the evaluation of the Corporation’s ability to generate cash and evaluate its return on
investments as it excludes the effects of real estate amortization and gains and losses from the sale of real estate,
all of which are based on historical cost accounting and which may be of limited significance in evaluating current
performance.
Adjusted Funds from Operations (“AFFO”) – AFFO is defined as FFO plus acquisition and integration costs.
Acquisition and integration costs are one time in nature to the specific assets purchased in the current period or
pending and are expensed under IFRS.
Existing Self Storage and New Self Storage performance – “Existing Self Storage” are stabilized stores that the
Corporation has owned or leased at least since the beginning of the previous fiscal year. “New Self Storage” are
non-stabilized stores that have not been owned or leased continuously since the beginning of the previous fiscal
year. We believe the use of this metric combined with primary IFRS measures is beneficial in understanding the full
operating performance of our operations during a growth period. Comparative figures for the New Self Storage and
Existing Self Storage categories may differ from amounts reported in previous MD&A reports.
Recent and Future Accounting Pronouncements
The IASB and the International Financial Reporting Interpretations Committee have issued a number of new or revised
standards or interpretations that will become effective for future periods and have a potential implication for the
Corporation. There have been no pronouncements in addition to those disclosed in the December 31, 2023 annual audited
financial statements.
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ANNUAL REPORT 2023
Disclosure Controls and Procedures
Pursuant to National Instrument 52-109, which requires certification of disclosure in an issuer’s annual and interim filings,
the Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of the Corporation’s internal
disclosure controls and procedures for the three months and fiscal year ended December 31, 2023, including the design of
internal controls over financial reporting, to provide reasonable assurance regarding the reliability of financial reporting in
accordance with IFRS. These officers have concluded that the Corporation’s disclosure controls and procedures are designed
effectively to ensure that information required to be disclosed in reports that are filed or submitted under Canadian securities
legislation are recorded, processed and reported within the time specified in those rules.
There have been no changes in the Corporation’s internal controls over financial reporting that have materially affected or
are reasonably likely to affect the Corporation’s internal controls over financial reporting for the three months and fiscal year
ended December 31, 2023.
RISKS AND UNCERTAINTIES
As our primary business consists of owning and operating storage real estate, we are exposed to risks related to such
ownership and operations that can adversely impact our business and financial position. The following is a brief overview of
some of the potential risks and the potential impacts these risks and uncertainties may have on the operations of the
Corporation:
Real Estate Industry
Real estate investments are subject to varying degrees of risk depending on the nature of each property. Such investments
are affected by general economic conditions, local real estate markets, supply and demand for rental space, competition from
others with similar developments, the perceived “attractiveness” of a given property and various other factors.
Liquidity Risk
Liquidity risk is the risk that the Corporation will be unable to meet its financial obligations as they fall due. The Corporation
manages liquidity risk through cash flow forecasting and regular monitoring of cash requirements including anticipated
investing and financing activities. Typically, the Corporation ensures that it has sufficient cash or liquid investments available
to meet expected operating expenses for a period of 30 days, excluding the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters. For the foreseeable future, the Corporation anticipates that cash
flows from operations, working capital, and other sources of financing will be sufficient to meet its operating requirements,
debt repayment obligations and will provide sufficient funding for anticipated capital expenditures.
Refinancing Risk
There is no certainty that financing will be available upon the maturity of any existing mortgage at terms that are as favorable
as the expiring mortgage, or at all. If the Corporation is unable to refinance an existing indebtedness on favorable terms, the
Corporation may need to dispose of one or more properties on disadvantageous terms. Prevailing interest rates, limited
availability of credit or other factors at the time of refinancing could increase interest expense and ultimately decrease the
return to investors.
Interest Rate Risk
Interest rate risk arises from changes in market interest rates that may affect the fair value of future cash flows from the
Corporation’s financial assets or liabilities. Interest rate risk may be partially mitigated by holding both fixed and floating rate
debt, or by staggering the maturities of fixed rate debt. The Corporation is exposed to interest rate risk primarily relating to
its long term debt. The Corporation will manage interest rate risk by utilizing fixed interest rates on its mortgages where
possible, entering into floating-to-fixed interest rate swaps, staggering maturities over a number of years to mitigate exposure
to any single year, and by attempting to ensure access to diverse sources of funding.
Economic Conditions
Even though storage is less susceptible to changes in the local economy as storage space is often needed during times of both
growth and recession, downturns in a local economy could negatively affect our revenues and NOI. A significant portion of
storage customers use storage during periods of moving from one residence to another or when a residence is being
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renovated. In times of economic downturn, the level of activity in housing sales and housing renovation could decrease,
thereby decreasing storage rental demand.
Contagious Diseases
Outbreaks of highly infectious or contagious diseases, such as the COVID-19 pandemic, may impact demand for our storage
space and ancillary products and services, which can result in potential decreases in occupancy, rental rates and
administrative fees, and increases in expenses, which could adversely affect our results.
Environmental Risk
Environmental risk is inherent in the ownership of property. Various municipal, provincial and federal regulations can result
in penalties or potential liability for remediation, to the extent that hazardous materials enter the environment. The presence
of hazardous substances could also impair the Corporation’s ability to finance or sell the property, and might expose the
Corporation to civil lawsuits. To mitigate such risk, the Corporation procures recent or updated environmental reports for all
acquisitions to ascertain the risk, if any, that exist at a property. It also prohibits the storage of hazardous substances as a
condition of the user agreement signed by customers.
Credit Risk
Credit risk arises from the possibility that customers may experience financial difficulty and be unable to fulfill their financial
obligations to the Corporation. The risk of incurring bad debts often arises if storage customers relocate and cannot be found
to enforce payment, or if storage customers abandon their possessions. The extent of bad debts can be mitigated by quickly
following up on any unpaid amounts shortly after the due date, enforcing late fees, denying access to any customers with
delinquent accounts, and ultimately seizing the possessions of the customer. Additionally, the Corporation typically rents to
numerous customers, each of which constitutes significantly less than 5% of the Corporation’s monthly revenue. This
diversification in the customer base reduces credit risk from any given customer.
Other Self Storage Operators or Storage Alternatives
The Corporation competes with other individuals, corporations and institutions which currently own, or are anticipating
owning a similar property in a given region. Competitive forces could have a negative effect on occupancy levels, rental rates
or operating costs such as marketing.
Acquisition of Future Locations
Competition also exists when the Corporation attempts to grow through acquisitions of storage locations. An increase in the
availability of investment funds in the general market, and a subsequent increase in demand for storage locations would have
a tendency to increase the price for future acquisitions of storage locations and reduce the yields thereon.
Anticipated Results from New Acquisitions
The realization of anticipated results and value from acquisitions can be jeopardized from unexpected circumstances in
integrating stores into our existing operations, from situations we did not detect during our due diligence, or from increased
property tax following reassessment of newly acquired locations.
Increase in Operating Costs
Our operating margins can be negatively impacted from increases in operating costs such as property tax, staffing costs,
insurance premiums, repairs and maintenances costs, utility costs and others due to various factors such as the need for
governments to raise funds, natural disasters, and energy prices.
Climate and Natural Disasters
The storage industry in Canada can be cyclical. Due to the climate, demand for storage is generally weaker in winter months
with an increase in operating costs resulting in potentially lower NOI during Q1 and Q4.
Natural disasters, such as floods, wildfires, earthquakes or severe winter storms may result in damage and business
interruption losses that are greater than the aggregate limits of our insurance coverage. We maintain a comprehensive
insurance policy to cover such events, however some insurance coverage may be or become unavailable or cost prohibitive.
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ANNUAL REPORT 2023
Litigation
Legal claims may arise from the ordinary course of our business. Resolution of these claims would divert resources from the
Corporation such as cash to pay expenses and damages and the diversion of management’s time and attention from the
Corporation’s business. The impact and results from litigation cannot be predicted with certainty and can have a material
adverse effect on the business.
Use and Dependency on Information Technology Systems
Our business is heavily dependent on the use of information technology, with the majority of our new customers
communicating and transacting with us electronically or over the phone. Commerce over the internet and the nature of our
business requires us to retain private information about our customers. Significant aspects of these systems are centrally
managed, such as our financial information and some are managed by third party vendors. These systems may be subject
to telecommunication failures, cyber-attacks, computer worms and viruses and other disruptive security breaches, all of
which could materially impact our operations, resulting in additional costs and or in legal action either by government
agencies or private individuals.
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ANNUAL REPORT 2023
StorageVault Canada Inc.
OFFICERS
Steven Scott
Chief Executive Officer
Iqbal Khan
Chief Financial Officer
DIRECTORS
Jay Lynne Fleming
Vancouver, BC
Ben Harris
Bedford, NY
Iqbal Khan
Toronto, ON
Steven Scott
Toronto, ON
Alan Simpson
Regina, SK
Mary Vitug
Toronto, ON
LEGAL COUNSEL
AUDITORS
DLA Piper (Canada) LLP
Livingston Place
1000 – 250 2nd St S.W.
Calgary, AB T2P 0C1
Telephone 403-296-4470
Facsimile 403-296-4474
MNP LLP
2000, 112 4th Ave S.W.
Calgary, AB T2P 3G4
Telephone 403-263-3385
Facsimile 403-269-8450
HEAD OFFICE
REGISTRAR & TRANSFER AGENT
StorageVault Canada Inc.
100 Canadian Rd
Toronto, ON M1R 4Z5
Telephone 1-877-622-0205
Email: ir@storagevaultcanada.com
TSX Trust
300-5th Ave S.W., 10th Floor
Calgary, AB T2P 3C4
Telephone 403-218-2800
Facsimile 403-265-0232
TSX LISTING:
SVI
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