CubeSmart (NYSE:CUBE) Q4 2019 Earnings Conference Call - Final Transcript

Feb 21, 2020 • 11:00 am ET

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CubeSmart (NYSE:CUBE) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day and welcome to the CubeSmart Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Josh Schutzer, Director of Financial Analysis. Please go ahead.

Executive
Josh Schutzer

Thank you, Sean. Hello everyone. Good morning from Malvern, Pennsylvania. Welcome to CubeSmart's fourth quarter 2019 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer; and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com.

The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically the Form 8-K we filed this morning, together with our earnings release filed with the Form 8-K, and the Risk Factors section of the company's Annual Report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the fourth quarter financial supplement posted on the company's website at www.cubesmart.com.

I will now turn the call over to Chris.

Executive
Christopher P. Marr

Thank you and good morning. We reported a solid quarter yesterday, in a continuously challenging operating environment. Throughout the year, in spite of the internal growth headwinds caused by the ongoing impact of new supply, we generated growth in our funds from operations through expansion of our third-party management program, the utilization of joint ventures, the lease-up of our non-stabilized portfolio and successful capital raising in both the debt and equity markets.

2020 will be a year of transition, as our industry absorbs the new supply delivered over the last several years. Our outlook for the future remains positive, as our current supply data for our top 12 markets points to 2019 being the peak year for new deliveries. Markets that experience the impact of new supply early in the cycle, are seeing a solid slowdown in expected future deliveries.

In New York City, we expect deliveries to taper off through 2020 and those expected deliveries are increasingly in sub-markets, where they will not directly compete with an existing CubeSmart store. Looking ahead, factoring in our ongoing innovations in technology, pricing and marketing, as well as assuming our current supply outlook holds and no downturn in the U.S. economy, the deceleration in our same-store revenue growth should begin to stabilize in the latter half of this year, and we are cautiously optimistic about a gradual strengthening of fundamentals in 2021.

I'll now turn the call over to Tim Martin, to walk through our information in more detail. Tim?

Executive
Timothy M. Martin

Thanks Chris and thanks to everyone on