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Greetings and welcome to the Life Storage Second Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Diane Piegza, Vice President, Investor Relations. Thank you. You may begin.
Good morning and welcome to our second quarter 2018 conference call. Leading today’s discussion will be David Rogers, Chief Executive Officer of Life Storage along with Andy Gregoire, Chief Financial Officer.
As a reminder, the following discussion and answers to your questions contain forward-looking statements. Our actual results maybe different from those projected due to risks and uncertainties with the company’s business. Additional information regarding these factors can be found in the company’s SEC filings. A copy of our press release and quarterly supplement may be found on the Investor Relations page at lifestorage.com. As a reminder, during today’s question-and-answer session, we ask that you limit yourself to two questions to allow time for everyone who wishes to participate. Please re-queue with any follow-up questions.
At this time, I will turn the call over to Dave.
Thanks, Diane and welcome everyone to our call. Last night, we reported FFO of $1.39 for the second quarter driven by strong same store top line and NOI growth. While we admitted we benefited from a relatively easy comp over last year’s 2Q, we are very pleased with these results. We are taking advantage of the higher busy season call volume to grow street rates and push increases through to existing customers. We are seeing steady residential customer demand in almost all of our markets, so we have been able to retain high occupancy levels intangible with the rate boosts. We have also augmented that residential demand with additional penetration into the business sector. The brand transition that was completed last summer is behind us. Our web presence is where it should be and we are experiencing good success with some great advertising programs beamed around the Life Storage brand.
With regard to same-store performance, several of our markets posted double-digit NOI growth, including Las Vegas, Sacramento and Orlando. This is the second quarter that the legacy Life Storage portfolio has been included in our same-store results and the impact of that contribution on our performance reflects the successful implication of our business model. Most of Florida, Beaumont Texas, Los Angeles, Upstate New York and much of the Northeast are performing well. Houston had a nice trend, but we are anticipating some slippage there later in the year as 2Q 2017 was the last pre-Harvey quarter.
Regarding our launch markets, those where we forecast less than portfolio average growth, San Antonio, Dallas and Austin continue to fight their way through the supply issues we have talked about over the past few quarters. While Chicago and Miami are holding their own, we are keeping them on the list again due to supply issues. We don’t expect these two to take nearly the punch that Texas has though at least relating to our specific properties in those markets.
Looking at the transaction market, we see little movement in bid asset prices over the past few quarters. As witnessed by the recent Simply Self Storage sale, there is continued strong interest from both the public and private sector for storage properties of all denominations. Taking advantage of this interest and the interactive pricing for assets in secondary markets, we are working through a process whereby a group of our non-core assets are being offered to sale or maybe perhaps in the contribution to a joint venture in which we will consider holding a minority stake. We are in the early phase of these endeavors and there is no assurance that we will achieve either the pricing or the opportunity we need to pull the trigger.
Since quarter end, we have entered into contracts to acquire three stores totaling $28 million in target markets, Boston, New York and Atlanta. We are still in the due diligence process and can’t guarantee that we will be able to finalize the purchases, but we would like to add these attractive properties to our portfolio. On Tuesday, we put out a press release announcing our Rent Now initiative, a concept we are really excited about. We found that growing segment of our customers prefer to self-serve and complete the rental process completely online. One of our top priorities is to make it easy for our customers to engage with us and the Rent Now app makes this possible. We tested Rent Now at 15 of our popular stores and we are very happy with the outcome, especially with the adoption rate. It’s slowly integrated with Life Storage’s operating, security and revenue management systems and allows for real time inventory and sales management. We are expanding this initiative beyond Buffalo this month to 142 stores in the Greater New York City area, all in Texas markets, most of our Florida stores and in Richmond and St. Louis markets. We expect Rent Now to be fully integrated at all the Life Storage stores by early 2019.
Our third-party management platform, Life Storage Solutions continues its ramp up. And while only a net of 7 stores were added this quarter, we have a pipeline of owners that had entered into contracts with us for starts later in the year. Most of these are development properties, so the exact commencement dates are a bit fluid, but we remain on track to add up to 75 new stores to the program this year. So at the halfway point of this busy season, we are pleased with the progress we have made over the last 12 months and we are looking forward to the opportunities we have before us. Andy?
Thanks, Dave. As Dave mentioned last night we reported quarterly funds from operations of $1.39 per share compared to adjusted FFO of $1.33 per share for the same period in 2017. These results were above the high-end of our forecast driven by better than expected same-store performance as well as lease up store growth that continues to exceed our estimates.
As a result of this strong performance, we have increased our annual guidance, which I will review shortly. Our same-store performance is highlighted by NOI growth of 5.2%, achieved by both improved revenue growth and lower expenses, excluding real estate taxes. Specifically, revenue rose 4% over the same period last year, driven by both occupancy gains and improvement in rental rates. Same-store average quarterly occupancy was up 20 basis points and realized rates were up 3.4%. Second quarter same-store expenses, outside of property taxes, were well controlled, decreasing by 0.08%.
As we noted in the first quarter, the Life Storage brand has gained significant presence on the web and allowed us to reduce internet marketing spend by approximately 12% versus the second quarter of 2017. In addition, our store teams are doing a phenomenal job in improving efficiency at the stores we acquired in the last few years. As we anticipated, property taxes increased 6% in the second quarter, with significant increases expected this year in Houston, Austin, St. Louis and certain Florida markets. In addition to the improved performance of our same-store portfolio, we continue to see consistent growth trends at the properties that we purchased at certificate of occupancy are very early in the lease-up stage. Average occupancy for these lease-up stores increased by 410 basis points from March 31, 2018 to June 30, 2018. With average quarter occupancy of 84.6%, these lease-up stores have significant room to grow. Our overall second quarter revenue increase also reflected a 31% increase in management fee income to $2.5 million as the strength of the Life Storage brand continues to gain traction with independent owners.
Our balance sheet remains solid and we continue to have significant flexibility to capitalize on attractive investment opportunities when they meet our return requirements. At quarter end, we had cash on hand of $7.3 million and $386 million available on our line of credit. We have no debt maturities until December of 2019. Our debt service coverage ratio was a healthy 4.8x and our net debt to recurring EBITDA ratio improved to 5.4x. During the quarter, we increased our financial flexibility by filing a new $300 million ATM equity program to replace our previous program that had expired. No shares were issued during the quarter under this program.
Regarding guidance, we are encouraged by the better than expected results in Q2 and have raised our annual same-store revenue guidance ranges and our annual FFO guidance. Specifically, we significantly increased the midpoint of both our 2018 same-store revenue and NOI growth guidance and the midpoint of our 2018 FFO per share by $0.055. As we discussed last quarter, we do expect tougher comps in the second half of the year as a result of new supply and the normalization of the Houston and certain Florida markets. As you recall, Houston and portions of Florida experienced significant hurricane-driven demand starting in late third quarter of 2017.
In addition, our fourth quarter internet spend was reduced in 2017 as the Life Storage brand relevancy improved on the web, resulting in a more difficult comparable this year. Same-store revenue growth for Q3 is expected to be in the 2.75% to 3.25% range. And for the year revenue growth is now expected at 2.50% to 3.25%. Our expense guidance was also reduced slightly. As a result of the changes to our same-store guidance, we are forecasting adjusted funds from operations for the full year 2018 to be between $5.42 and $5.48 per share and between $1.40 and $1.44 per share for the third quarter of 2018.
And with that operator we can open the call for questions.
Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from the line of Jeremy Metz with BMO Capital Markets. Please proceed with your question.
Hey, guys. Good morning. You noted the lower Internet spend and the improved organic search results, I am not sure if you can but is there anyway you can dissect your revenue to give us a feeling for how much of that 4% growth this quarter benefited simply from search improvement versus may be tweaked to your operating system and revenue strategy. And maybe as a follow-on if you can kind of comment on the existing customer rate increases and the increase in letters there, any update on that front?
I think with – hi Jeremy, with regard to the first part of your question, it was difficult to know what we lost last year. We tried a bunch of metrics to measure it. We think it was somewhere between 75 bps and 90 bps of revenue on a same-store basis. I am sure we got all that back. So – but that’s about it as good as we can do there. So many moving parts, certainly we have improved a lot of the platforms across the way over the last year. I would say we lost that last year. We got it all back and maybe a little bit more this year.
And on the in-place Jeremy, rent increase letters that went out. We continue to be aggressive in that. Q2 of ‘18 on a same-store basis we did about $97,000 and last year Q2 of ‘17 we did about $41,000. So we continue to be aggressive, although now as we go through the year a number of letters we do so significantly because we like to get out ahead of the busy season with those letters. So those that do move out we can replace them.
Got it. And then just second one for me and I asked about this a little bit last quarter, but if I look at the same-store revenue results it seem to imply about a 70 basis points increases in square footage of the same-store pull or about 250,000 feet, which is the expansions you have been doing, I know these are bunch of small additions 5,000, 10,000, 20,000 square feet. But can you talk about the typical occupancy or revenue trajectory for these additions, I mean they get out into the pool at zero occupancy in revenue and then fill up so is it 12 months to stabilization, what’s the typical trajectory?
There is a couple of things in the play there Jeremy. One is yes we do add space, but remember we are knocking down spaces to add that space. So we are constantly knocking down some single storey, non-climate to put up climate control. So as we take down spaces, new space come on in a different store, it does – it’s usually 12 months to 18 months. We see the physical occupancy of those additions come up, so we do physically sell them up. But they are at discounted rate, so it does holdback our rate growth year-over-year on the same-store. And then it holds back our occupancy growth because we are putting in spaces with zero occupancy. So there is a double edged sword there and that it holds back some of our rate growth because it’s usually incentives we take to fill them up quickly. And then after that 12 months to 18 months, then we will start putting in place increases in – on those customers and improving the street rate.
So we found Jeremy that looking at this on a whole given the fact that we are adding say 35 additions last year, we are tearing down 25 stores this year, let’s say, we have got 60 stores in play here for the addition of small – very small percentage of dollars [ph]. We think the impact of last 2 years or 3 years has been about 30 bps to 35 bps of increase to same-store results – same-store top line growth, to take out 60 stores to avoid that, that contribution seems pretty draconian. So yes there is a push, no question. Where you would see an outside push, is if we did – is one we would start. If we go through in this year we had $50 million worth of expansions and enhancements and get the benefit for that starting next busy season. It’s offset a lot by the stuff we are going to do next year. If we were not to do anything next year we would get an outsized pot and I guess we don’t have any plans for that. We got a lot of stuff in the queue to continue to do our E&Es. I don’t see any slowdown. So I don’t think the impact is going to be that great, but when we do stop if that day ever comes, then we will raise the flag and say hey you know what, 100 basis points of our top line same-store growth is due to expansions and enhancements and not offset by anything. But otherwise we have just been given the machinations of 60 stores or 70 stores to bring in and take out of the same-store pool for a 20 bps or 30 bps benefit just doesn’t make sense.
And so it does sound like just based on that 12 months to 18 months and you increased the spend this year to $40 million to $50 million – $45 million to $50 million versus last year, now we should see that boost actually go up a little bit next year, just because you are going to have more from the higher spend this year coming in, that’s the right way to think about just – even if on the margin?
It is unless we of course do a lot more next year. If we do $70 million next year offsetting this $50 million, it would be – but yes that’s a good way to think about it.
Got it. Thanks guys.
Thank you. The next question is coming from the line of Smedes Rose with Citi. Please proceed with your question.
Hi. Thanks. You talked about potentially putting some non-core assets into a JV or selling and I think you talked about that a little bit on your first quarter call as well, so can you – as you further down the road maybe with that could you maybe quantify how much NOI you are thinking about there and maybe the number of properties and I assume that this potential sale or JV is not contemplated in current guidance?
It’s not contemplated in current guidance. It probably won’t have an impact on 2018. We have not identified a partner. We have talked to a few people. We will be talking to a few more. It’s a fluid process, means in the sense that we have got anywhere from 30 stores to 60 stores that we would be willing to contribute our outright sell. We have talked to three parties more or less exclusively over the past two months. If we don’t see much progress in the very, very near future, we will probably open it up. So we don’t have a fish on the line. We don’t have a partner in the queue. But the process is in place and we fully expect to execute, but it probably won’t be such a time that it impacts 2018 results.
And what sort of the range of NOI for that 30 properties to 60 properties you are thinking about?
Anywhere from $10 million to $15 million would be a good range. But again that’s very fluid. That could change as we speak through these different potential buyers.
Okay. And then I just wanted to ask you about the guidance, just given the kind of better trajectory that you have reported year-to-date and the implied guidance for the fourth quarter just seems like a pretty steep decline, relative to what you are looking at for the third quarter and I was just wondering if you could maybe talk about that a little bit more or you are just being conservative or is that kind of Houston related or…?
Sure, there is a few things that play there Smedes. First, I mean obviously, we are pleased with the performance of the platforms in the first half of the year, especially the legacy life that were added to the same-store. So we are very pleased with what we have seen. But Q3 and Q4 last year benefited from the hurricanes in our two biggest markets, right, Florida and Texas. So we are going to have difficult comps on the revenue side there. New supply in the short-term is still the concern. We are still – it is affecting the entire sector. We did see some delays in the few properties we thought would come online here during the year, but that was months delayed. They will still come online this year and we expect them again in fact free rent mostly, but that hurts in the short-term. And our improved organic search happened at the end of last year. So our Internet spend last Q4 was down, that’s going to be a tough comp as we compare year-over-year on the expense side.
I think in summary we have a pretty easy 3Q comp, but a pretty tough 4Q comp given where we are right now.
Okay, thank you. I appreciate it.
Thank you. The next question is coming from the line of Juan Sanabria with Bank of America/Merrill Lynch. Please proceed with your question.
Hi, this is actually Shirley Wu coming in with Juan Sanabria, so congrats on a great quarter. And I wanted to ask on your Rent Now initiative, can you discuss the impact on your customer capture rates and how that automated this process and how should we think about the benefit to occupancy in same-store revenue moving forward?
First of all, the main focus of this was we saw – we are seeing as many people do in many industries, pretty big shift in customer habits and everybody wants to do this in a touch less way. The rental car companies, hotels and Amazon all of its skip the counter, skip the personal context. So, we thought that we are part of the consumer process, let’s do it. And so we have been working on it for the last 9 to 10 months and as far as metrics go, in terms of economic impact, we expect to see a better capture rate certainly. We expect down the line to probably see a difference in our staffing needs shifting from one way to another, maybe call center to more customer service support, but there will be – right now with a 15 store test market, we have seen very good penetration in just the 60 days we have been doing it. Yesterday was the rollout for the 142 stores. So I think, it’s early to talk about the economic impact other than we expect to be a leader in this industry. We expect to be a leader in this process and we can tell when people are on our website, we don’t lose them. We have the capture rate. So we are not here to talk or we are not ready to talk about economic impact, but we certainly are very excited about the idea that we are giving customers what they want and they get it. We didn’t even advertise in New Buffalo, we just put it on the website, we didn’t do a thing and we had three customers in four days with that just did it on their own. It was remarkable. So it’s a great asset for us to be a leader in the sector and giving our consumers and tenants what they want.
Great. So shifting to supply, what are your views on 2019 relative to ‘18 and on a 3-year rolling basis versus 2016 maybe?
Yes. We haven’t seen much of a shift the last couple of quarters. There is different markets have speed up. Mostly there has been construction delays that is usually in our case. Anecdotally we have heard a few stores falling off due to construction cost increases or finally just especially in the case of say CBD Miami or even a little bit Dallas where a couple have fallen off, but really the supply outlook I don’t think has changed very much. In our particular markets within a 5-mile radius, we have 152 stores that are in construction right now. I think that’s changed by just a couple of stores since last quarter, pretty consistent. So no change from what we’ve been talking about the last 2 quarters or so. I think at ‘19 from all indications again you can – we are only halfway through ‘18. So things are going to happen in ‘19, but right now, we are not seeing much of an uptick, but not necessarily a slowdown either. So I think what we have seen the last 2 years is what we are going to continue to see for the next 2 years.
Great.
Thank you. The next question is coming from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.
Hi, thanks. Good morning. Just first question a quick follow-up on the joint venture disposition. So, the language was pulled from the guidance discussion in the earnings release last quarter, was that previously embedded in guidance?
No, it was not. We have never included acquisitions or dispositions in our guidance.
Okay. And then just circling back to the balance of the year here, so the deceleration that you are anticipating in the second half of the year, I guess primarily the fourth quarter, just based on the third quarter guidance, the fourth quarter doesn’t seem like it will experience that dramatic of a deceleration, but your commentary maybe suggests a little bit otherwise. And so you talked about the Internet spend, but can you provide some additional detail around some of the other factors that might impact the fourth quarter, specifically whether rental rates or discounts and maybe occupancy?
Sure. As you would expect because we had the uptick in occupancy in the fourth quarter of ‘17 from the hurricane stat, we are going to see especially in Houston, occupancy 400 to 500 bps lower this year than last year. So, that’s one heck of comp we are going to have in 4Q. Couple of other things in play, free rent, with the new supply coming online, we do expect free rent to remain high. So, I think in Q2 we are about 3% of rents was our concession level, that might uptick to 3% to 3.5% second half of the year. And some of that new supply we have been tracking, it was delayed. We even saw so far in July quite a bit come on. So, it was delayed just a few months and we expect that to continue to affect the whole industry.
Okay. In the Houston, specifically just given it’s 8.5% of the same-store, are you expecting with that occupancy comp, are you expecting revenue growth to be negative in the fourth quarter, can you just provide maybe an update on what’s in the model or what you are expecting for that market specifically?
Yes, based on the fact that occupancy will have that GAAP, we would expect – we are very pleased with the 3% – I think 3%, 4% we did in the – 3.4% revenue growth we did in Houston. We would expect that to push towards the negative end.
Okay. And just one last question for me, Dave one of your competitors discussed a view around commercial customers, saying that they have a little more negotiating power, they drive harder bargains on some level relative to individual renters and you touched on this in your prepared remarks and I know you have had a strong effort targeting commercial and business users, can you just talk about that segment of the portfolio, maybe provide some insight on your thoughts there and I am curious if that commercial segment, how they – where they are relative to individual renters in terms of rates and rent increases and whether or not they take insurance and things of that nature?
We love our commercial customer rates. We have worked for the last 4 years, put some serious effort into technology and some platforms and we built a network of preferred providers under the umbrella of an entity, we call Warehouse Anywhere. So we reach out to national accounts and service them. If they need 250 locations, 150 feet per a location, we reach out and we say we got it. And of those 150, Life Storage might only have 100, but we will find the other 50 through our preferred provider network that we vetted. We have gone to the trade shows. We have lassoed in. I think it’s 5,500 operators, almost 9,000 stores that we can tap into and say, hey you Mr. Accountant rep at NCR or D-Bolt [ph] or Allergan or Michael Kors or Red Bull, you need all these spaces, we got them for you. We are going to give you one bill, you pay us and here is your 150 spaces. And we have worked it such that it’s not a loss leader, which most of us did during the downturn, but coming out of the downturn, we saw the opportunity to help these logistics departments to help these transportation departments at all of these larger national accounts. And not only not via discounted service, but we actually get to charge a premium as well as the handling fee, a service fee. So we love the commercial accounts, especially at the national or regional level. We also worked pretty deep and I won’t get into it now on the local level with the typical contractors and retailers and so forth. But mainly when we are talking about national accounts, we see an opportunity to ramp this up pretty good in the next 2 years to 3 years and really drive home Warehouse Anywhere at high margins, get good rates. Yes, the insurance we pretty much forfeit, given that these are – our commercial accounts are insured, but aside from that as far as rates, as far as renewals, as far as the ability to push rates and the ability to get these management fees for handling the process for these guys, we love it. We think it’s great.
And Todd, there is annual escalators built into those national contracts. So it works very well for us.
Okay, great. Thank you.
Thank you. The next question is coming from the line of George Hoglund with Jefferies. Please proceed with your question.
Hey, good morning guys, I was just wondering if you can – I guess I have two questions, one can you comment on July performance in terms of occupancy and discounting?
Sure George. The occupancy as it typically does July higher than June, but it was 30 bps below last year’s July. So as we go through the year, we would expect our occupancy, especially when we push up against the hurricane demand we had last year that occupancy would go below last year, but we are very comfortable. Rates are holding nicely, specials are up – the concessions are up slightly, but overall in pretty good shape.
Okay. And then second question, your data partnership with the union real time, just on the development data and then also their inputs into your revenue management, can you just comment on kind of how that’s working out in terms of – what benefits are you seeing from using their data and has there been any kind of noticeable change to revenue management?
The benefits we see are more data on non-REIT, non-big regional players. So we have got some more data on the mom and pops that union real time helps us pull into our system. So we are getting more stores than we had before we started using them. On the supply data both going back and forth, we are giving them data, they had not previously had and they are giving us data we had not had. Not only in the markets we are in, but they are giving us data in the markets that we may want to be in, which we didn’t have that data before. So that adds to our ability to go and look at some new markets.
Okay. Thanks. I appreciate the color.
Thank you. [Operator Instructions] Our next question is coming from the line of Eric Frankel with Green Street Advisors. Please proceed with your question.
Thank you. I just wanted to discuss the Life Storage integration, especially the same-store pool this year and I guess but maybe want to understand re-branding efforts better, so when you contribute the Life Storage portfolio, the same-store pools you look they can contribute about 120 basis points worth of NOI growth, can you explain why that is especially if the re-branding efforts would more negatively affect the legacy Uncle Bob’s properties and/or that’s more market specific of where the Life Storage portfolio is approximated? Thank you.
Eric, so the Life Storage legacy portfolio, which was purchased mid-2016 and we had operated that for some 18 months before we do it in the same-store pool come this January. It’s performing very well with occupancy up significantly, revenue on that portfolio – that mature portion of that portfolio excluding the C of O or early lease up properties. The revenue on the matures was up 6.2% and the NOI up 8.4%. So you can see the power of the platforms on an acquisition and how they play out, even some 18 months, 2 years after an acquisition. So we are happy with that and it’s about 70 basis points to our revenue growth and 120 basis points to our NOI.
Do you think the extra growth was it all market specific or do you think it was just the integration into your financial system?
I think it’s yes, it is pretty widespread. So it’s really the platforms doing what we know they can do over time as we put these on our system. It’s the revenue management, it’s the call center, it’s our store operations, it’s everybody doing what we do day-to-day.
And some of the markets certainly have popped Vegas and Sacramento certainly, but we have also had to carry, I think there were 19 Houston, Dallas – 19 Texas stores and a big bunch of Chicago stores too, which are performing out better than our pool. So yes, platforms have a lot to do with it.
Okay. Thanks. Just a final question with this contemplated JV or sale of pretty large chunk of assets, do you have a planned use of proceeds?
Well, yes, to a degree. We are looking at a lot of properties. There has been a fair amount of transactions or properties that have come on the market. We have the opportunity to stay in as a JV partner, at least the way we want to structure this. And we have more E&Es to do. And so yes, I am not going – I can’t tell you the exact properties we will be doing. We have got probably going to park some of it is a 1031 if it happens very soon. But yes, we would mainly do what I would think we have got more acquisitions beyond the 28 that we announced, so we will have some fire power there. And then we have got some other JV opportunities to go into, not seated with our properties and that we would be pretty excited about as well. So we are looking basically to roll out of smaller markets that have basically hindered our growth a little bit. Good properties, but aren’t at the same rate of growth as our existing bigger market stores and deploy that capital into the assets similar to which we have been buying for the last 4 years or 5 years.
Okay, great. Thank you very much.
Thank you. The next question is coming from the line of Ki Bin Kim with SunTrust Robinson Humphrey. Please proceed with your question.
Hey, good morning everyone. Dave, did you guys already talk about the spot rate and promotions in the quarter and what you saw in July?
I don’t think we touched on the quarter. I think street rates were up over 4%, they are 4.2%. Concessions were up, I take that – brings that net effect to about 3% during the quarter. Subsequent to the quarter end, we are about 2% net effective.
Okay. And so what was the concept of net effective to drop a little bit?
Don’t quite follow you there, Ki Bin.
You said that net effective was up 4.2% in the quarter and then – and up 2% in July, is that what you said?
Correct. Up 4.2%, but net 3%.
Yes, net 3% and net effective.
Okay. And given that your cost of capital has improved pretty significantly over the past few months, how does that make you think about capital deployment and things that maybe perhaps you weren’t able to do a few months ago that maybe you can pursue now?
We are still not there with our minds as to NAV and share price. We are getting there, but we are not there, but we expect to have fairly considerable proceeds from the sale or contribution of 30 to 60 stores. So we are talking somewhere in the range of $150 million to $300 million there, which would be possible, but challenging to deploy within the 10/31 period of time. So I don’t – you never know what’s going to come across, there’s all kinds of stuff that can happen. And obviously, over the last 3 or 4 years there have been some big deals, but we are sort of – we are not displeased by what’s happened. We have got a whole different outlook than we did at the beginning of the year when our share price was around 70, but nonetheless, I think we are going to be able to generate some capital to turn assets from some of our legacy stores into the larger market, larger – higher margin stores that we have been doing the last few years. And I don’t think we are looking at – even though we put the ATM in that really is just to keep alive and at this point, I don’t think we are thinking equity issuance.
Okay, thank you.
Thank you. We have reached the end of our question-and-answer session. So, I would like to pass the floor back over to Mr. Rogers for any additional concluding comments.
Well, we thank you everyone for their support and their interest in our company. Enjoy the nice August coming up and we look forward to seeing you at the shows and conferences in September, October and November. Take care.