Americold Realty Trust Announces First Quarter 2020 Results

ATLANTA–(BUSINESS WIRE)–Americold Realty Trust (NYSE: COLD) (the “Company”), the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses, today announced financial and operating results for the first quarter ended March 31, 2020.

Fred Boehler, President and Chief Executive Officer of Americold Realty Trust, stated, “The ongoing COVID-19 pandemic has highlighted the strength and resiliency of our mission-critical infrastructure, business and Associates. For the first quarter 2020, we delivered total company revenue growth and NOI growth of 23.1% and 37.2%, respectively. This growth was driven by our core warehouse segment, which demonstrated our important role in the food supply chain, the diversity of the food commodities and channels our network serves, the benefit of our strategic acquisitions, and our entire Americold team’s extraordinary efforts. Within our warehouse segment, we delivered same store revenue and NOI growth of 6.8% and 11.1%, highlighting our disciplined execution through the initial impact of the COVID-19 pandemic, where we saw higher occupancy and greater throughput across the network.”

Mr. Boehler continued, “Looking ahead, we believe we are well positioned, due to the stability of the demand drivers that underpin our business, the diversity of our customer base, and the flexibility of our network and people to respond to shifting consumer demand. Our 183 facilities serve as an indispensable part of the infrastructure that serves the food supply chain. However, we expect that the surge in demand we have seen will normalize, and given that the impacts from COVID-19 are not fully known, we remain supportive of our customers who are adapting to changing market conditions. Furthermore, our flexible balance sheet provides a foundation to support and finance Americold’s ongoing growth. Our recently completed refinancing expanded our total liquidity, including cash, revolver availability and equity forwards, to approximately $1.2 billion. Finally, we are focused on the health and safety of our team and their families, and would like to express our gratitude to all of our associates at our warehouses and behind the scenes who are committed each day to help ensure continuity in the food supply.”

First Quarter 2020 Highlights

  • Total revenue increased 23.1% to $484.1 million for the first quarter 2020.
  • Total NOI increased 37.2% to $135.4 million for the first quarter 2020.
  • Core EBITDA increased 46.5% to $104.1 million, or 47.8% on a constant currency basis, for the first quarter 2020.
  • Net income of $23.5 million, or $0.11 per diluted common share for the first quarter 2020.
  • Core FFO of $60.1 million, or $0.29 per diluted common share for the first quarter 2020.
  • AFFO of $67.2 million, or $0.33 per diluted common share for the first quarter 2020.
  • Global Warehouse segment revenue increased 31.6% to $381.1 million for the first quarter 2020.
  • Global Warehouse segment NOI increased 39.6% to $126.8 million for the first quarter 2020.
  • Global Warehouse segment same store revenue grew 5.0%, or 6.8% on a constant currency basis, with same store segment NOI improving 9.8%, or 11.1% on a constant currency basis for the first quarter 2020.
  • Completed the acquisitions of Nova Cold for CAD $338.6 million and Newport for $57.1 million, both on January 2, 2020.
  • Completed a minority investment in a joint venture with Brazil-based, Superfrio.
  • Completed the refinancing of the Senior Unsecured Credit Facility during the first quarter of 2020, increasing capacity to approximately $1.4 billion, extending final maturity to 2025 and reducing the credit spread by five basis points.

First Quarter 2020 Total Company Financial Results

Total revenue for the first quarter of 2020 was $484.1 million, a 23.1% increase from the same quarter of the prior year. This growth was driven by the incremental revenue from the 2019 and 2020 acquisitions, the initial increase in activity related to COVID-19, contractual rate escalations and growth in fixed commitment storage contracts. These factors were partially offset by the translation impact of the strengthening US dollar.

For the first quarter of 2020, the Company reported net income of $23.5 million, or $0.11 per diluted share, compared to net loss of $4.6 million, or $0.03 per diluted share, for the same quarter of the prior year.

Total NOI for the first quarter of 2020 was $135.4 million, an increase of 37.2% from the same quarter of the prior year.

Core EBITDA was $104.1 million for the first quarter of 2020, compared to $71.1 million for the same quarter of the prior year. This reflects a 46.5% increase over prior year, or 47.8% on a constant currency basis, largely impacted by increased Core EBITDA from acquisitions and organic growth. Core EBITDA margin increased by 343 basis points to 21.5%. This growth and margin improvement was driven by the previously discussed items combined with disciplined cost controls through the Americold Operating System of power and labor-related costs, partially offset by the translation impact of the strengthening US dollar, and incremental costs incurred in response to COVID-19 including sanitation, supplies and inefficiencies resulting from social distancing requirements.

For the first quarter of 2020, Core FFO was $60.1 million, or $0.29 per diluted share, compared to $39.9 million, or $0.26 per diluted share, for same quarter of the prior year. The year-over-year increase is driven primarily by increased FFO as a result of acquisitions and the operating performance described above.

For the first quarter of 2020, AFFO was $67.2 million, or $0.33 per diluted share, compared to $44.3 million, or $0.29 per diluted share, for same quarter of the prior year. AFFO excludes certain expenses and income items that do not represent core expenses and income streams.

Please see the Company’s supplemental financial information for the definitions and reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures.

First Quarter 2020 Global Warehouse Segment Results

For the first quarter of 2020, Global Warehouse segment revenue was $381.1 million, an increase of $91.5 million, or 31.6%, compared to $289.6 million for the first quarter of 2019. This growth was driven by the incremental revenue from the 2019 and 2020 acquisitions as well as the same revenue growth factors mentioned above.

Warehouse segment NOI was $126.8 million for the first quarter of 2020, which reflects growth of 39.6%. Global Warehouse segment margin was 33.3% for the first quarter of 2020, an 191 basis point increase compared to the same quarter of the prior year. The year-over-year growth was driven by incremental NOI from the 2019 and 2020 acquisitions, the previously mentioned revenue trends, cost controls through the Americold Operating System of our power and labor-related costs, partially offset by the translation impact of the strengthening US dollar, the incremental costs incurred in response to COVID-19 including sanitation, supplies and inefficiencies resulting from social distancing requirements.

The following tables summarize the global warehouse and same store financial results and metrics for the quarter ended March 31, 2020 and 2019:

 

Three Months Ended March 31,

 

Change

Dollars in thousands

2020 actual

 

2020 constant

currency(1)

 

2019 actual

 

Actual

 

Constant

currency

 

 

 

 

 

 

 

 

 

 

TOTAL WAREHOUSE SEGMENT

 

 

 

 

 

 

 

 

 

Number of total warehouses

 

172

 

 

 

 

144

 

n/a

 

n/a

Global Warehouse revenue:

 

 

 

 

 

 

 

 

 

Rent and storage

$

 

162,308

 

 

$

 

163,990

 

 

$

 

126,380

 

 

28.4

%

 

29.8

%

Warehouse services

 

218,760

 

 

 

222,219

 

 

 

163,235

 

 

34.0

%

 

36.1

%

Total revenue

$

 

381,068

 

 

$

 

386,209

 

 

$

 

289,615

 

 

31.6

%

 

33.4

%

Global Warehouse contribution (NOI)

$

 

126,773

 

 

$

 

127,958

 

 

$

 

90,819

 

 

39.6

%

 

40.9

%

Global Warehouse margin

 

33.3

%

 

 

33.1

%

 

 

31.4

%

 

191 bps

 

177 bps

Units in thousands except per pallet data

 

 

 

 

 

 

 

 

 

Global Warehouse rent and storage metrics:

 

 

 

 

 

 

 

 

 

Average economic occupied pallets

 

3,256

 

 

 

n/a

 

 

2,507

 

 

29.9

%

 

n/a

Average physical occupied pallets

 

3,049

 

 

 

n/a

 

 

2,374

 

 

28.4

%

 

n/a

Average physical pallet positions

 

4,007

 

 

 

n/a

 

 

3,182

 

 

25.9

%

 

n/a

Economic occupancy percentage

 

81.3

%

 

 

n/a

 

 

78.8

%

 

247 bps

 

n/a

Physical occupancy percentage

 

76.1

%

 

 

n/a

 

 

74.6

%

 

148 bps

 

n/a

Total rent and storage revenue per economic occupied pallet

$

 

49.84

 

 

$

 

50.36

 

 

$

 

50.41

 

 

(1.1

)%

 

(0.1

)%

Total rent and storage revenue per physical occupied pallet

$

 

53.24

 

 

$

 

53.79

 

 

$

 

53.24

 

 

%

 

1.0

%

Global Warehouse services metrics:

 

 

 

 

 

 

 

 

 

Throughput pallets

 

8,199

 

 

 

n/a

 

 

6,522

 

 

25.7

%

 

n/a

Total warehouse services revenue per throughput pallet

$

 

26.68

 

 

$

 

27.10

 

 

$

 

25.03

 

 

6.6

%

 

8.3

%

 

 

 

 

 

 

 

 

 

 

SAME STORE WAREHOUSE

 

 

 

 

 

 

 

 

 

Number of same store warehouses

 

136

 

 

 

 

136

 

n/a

 

n/a

Global Warehouse same store revenue:

 

 

 

 

 

 

 

 

 

Rent and storage

$

 

125,875

 

 

$

 

127,446

 

 

$

 

120,550

 

 

4.4

%

 

5.7

%

Warehouse services

 

165,988

 

 

 

169,390

 

 

 

157,507

 

 

5.4

%

 

7.5

%

Total same store revenue

$

 

291,863

 

 

$

 

296,836

 

 

$

 

278,057

 

 

5.0

%

 

6.8

%

Global Warehouse same store contribution (NOI)

$

 

97,248

 

 

$

 

98,390

 

 

$

 

88,565

 

 

9.8

%

 

11.1

%

Global Warehouse same store margin

 

33.3

%

 

 

33.1

%

 

 

31.9

%

 

147 bps

 

129 bps

Units in thousands except per pallet data

 

 

 

 

 

 

 

 

 

Global Warehouse same store rent and storage metrics:

 

 

 

 

 

 

 

 

 

Average economic occupied pallets

 

2,490

 

 

 

n/a

 

 

2,391

 

 

4.1

%

 

n/a

Average physical occupied pallets

 

2,305

 

 

 

n/a

 

 

2,266

 

 

1.7

%

 

n/a

Average physical pallet positions

 

3,044

 

 

 

n/a

 

 

3,049

 

 

(0.2

)%

 

n/a

Economic occupancy percentage

 

81.8

%

 

 

n/a

 

 

78.4

%

 

337 bps

 

n/a

Physical occupancy percentage

 

75.7

%

 

 

n/a

 

 

74.3

%

 

140 bps

 

n/a

Same store rent and storage revenue per economic occupied pallet

$

 

50.55

 

 

$

 

51.18

 

 

$

 

50.42

 

 

0.3

%

 

1.5

%

Same store rent and storage revenue per physical occupied pallet

$

 

54.60

 

 

$

 

55.28

 

 

$

 

53.20

 

 

2.6

%

 

3.9

%

Global Warehouse same store services metrics:

 

 

 

 

 

 

 

 

 

Throughput pallets

 

6,467

 

 

 

n/a

 

 

6,296

 

 

2.7

%

 

n/a

Same store warehouse services revenue per throughput pallet

$

 

25.67

 

 

$

 

26.19

 

 

$

 

25.02

 

 

2.6

%

 

4.7

%

 

Three Months Ended March 31,

 

Change

Dollars in thousands

2020 actual

 

2020 constant

currency(1)

 

2019 actual

 

Actual

 

Constant

currency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-SAME STORE WAREHOUSE

 

 

 

 

 

 

 

 

 

Number of non-same store warehouses

 

36

 

 

 

 

8

 

n/a

 

n/a

Global Warehouse non-same store revenue:

 

 

 

 

 

 

 

 

 

Rent and storage

$

 

36,433

 

 

$

 

36,544

 

 

$

 

5,830

 

 

n/r

 

n/r

Warehouse services

 

52,772

 

 

 

52,829

 

 

 

5,728

 

 

n/r

 

n/r

Total non-same store revenue

$

 

89,205

 

 

$

 

89,373

 

 

$

 

11,558

 

 

n/r

 

n/r

Global Warehouse non-same store contribution (NOI)

$

 

29,525

 

 

$

 

29,568

 

 

$

 

2,254

 

 

n/r

 

n/r

Global Warehouse non-same store margin

 

33.1

%

 

 

33.1

%

 

 

19.5

%

 

n/r

 

n/r

Units in thousands except per pallet data

 

 

 

 

 

 

 

 

 

Global Warehouse non-same store rent and storage metrics:

 

 

 

 

 

 

 

 

Average economic occupied pallets

 

766

 

 

 

n/a

 

 

116

 

 

n/r

 

n/a

Average physical occupied pallets

 

743

 

 

 

n/a

 

 

108

 

 

n/r

 

n/a

Average physical pallet positions

 

962

 

 

 

n/a

 

 

133

 

 

n/r

 

n/a

Economic occupancy percentage

 

79.6

%

 

 

n/a

 

 

87.2

%

 

n/r

 

n/a

Physical occupancy percentage

 

77.2

%

 

 

n/a

 

 

81.2

%

 

n/r

 

n/a

Non-same store rent and storage revenue per economic occupied pallet

$

 

47.57

 

 

$

 

47.71

 

 

$

 

50.25

 

 

(5.3

)%

 

(5.1

)%

Non-same store rent and storage revenue per physical occupied pallet

$

 

49.01

 

 

$

 

49.16

 

 

$

 

54.00

 

 

(9.2

)%

 

(9.0

)%

Global Warehouse non-same store services metrics:

 

 

 

 

 

 

 

 

 

Throughput pallets

 

1,732

 

 

 

n/a

 

 

225

 

 

n/r

 

n/a

Non-same store warehouse services revenue per throughput pallet

$

 

30.47

 

 

$

 

30.51

 

 

$

 

25.45

 

 

19.7

%

 

19.9

%

(1)

The adjustments from our U.S. GAAP operating results to calculate our operating results on a constant currency basis are the effect of changes in foreign currency exchange rates relative to the comparable prior period.

(n/a = not applicable)
(n/r = not relevant)

Fixed Commitment Rent and Storage Revenue

As of March 31, 2020, $258.5 million of the Company’s annualized rent and storage revenue were derived from customers with fixed commitment storage contracts. This compares to $251.1 million at the end of the fourth quarter of 2019 and $221.6 million at the end of the first quarter of 2019. The Company’s recent acquisitions had a lower percentage of fixed committed contracts as a percentage of rent and storage revenue. On a combined pro forma basis, assuming a full twelve months of acquisitions revenue, 40.1% of rent and storage revenue were generated from fixed commitment storage contracts.

Economic and Physical Occupancy

Contracts that contain fixed commitments are designed to ensure the Company’s customers have space available when needed. For the first quarter of 2020, economic occupancy for the total warehouse segment was 81.3% and warehouse segment same store pool was 81.8%, representing a 518 basis point and 607 basis point increase above physical occupancy, respectively. For the first quarter of 2020, physical occupancy for the total warehouse segment was 76.1% and warehouse segment same store pool was 75.7%.

Real Estate Portfolio

As of March 31, 2020, the Company’s portfolio consists of 183 facilities, five more than what was reported as of the year ended 2019. The Company ended the first quarter of 2020 with 172 facilities in its Global Warehouse segment portfolio and 11 facilities in its Third-party managed segment. During the first quarter, the Company acquired four sites from the Nova Cold acquisition and one site from the Newport acquisition, all of which were added to the non-same store category. The same store population consists of 136 facilities for the quarter ended March 31, 2020. The remaining 36 non-same store Warehouse facilities include the 31 facilities that were acquired since the beginning of 2019, and five legacy facilities.

Balance Sheet Activity and Liquidity

At March 31, 2020, the Company had total liquidity of approximately $1.2 billion, including cash and capacity on its revolving credit facility and $135.1 million of net proceeds available from its September 2018 equity forward. Total debt outstanding was $2.0 billion (inclusive of $177.2 million of financing leases/sale lease-backs and exclusive of unamortized deferred financing fees), of which 77% was in an unsecured structure. The Company has no material debt maturities until 2023. At quarter end, its net debt to pro forma Core EBITDA was approximately 4.2x. Of the Company’s total debt outstanding, $1.8 billion relates to real estate debt, which excludes sale-leaseback and capitalized lease obligations. The Company’s real estate debt has a remaining weighted average term of 6.5 years and carries a weighted average contractual interest rate of 3.89%. As of March 31, 2020, 86% of the Company’s total debt outstanding was at a fixed rate, inclusive of interest rate swaps.

Dividend

On March 5, 2020, the Company’s Board of Trustees declared a dividend of $0.21 per share for the first quarter of 2020, which was paid on April 15, 2020 to common shareholders of record as of March 31, 2020.

2020 Outlook

The Company is maintaining its AFFO per share guidance of $1.22 to $1.30 for 2020. However, certain components are updated as follows:

  • Current income tax expense of $8 to $10 million.
  • Deferred income tax benefit of $2 to $3 million.
  • Please refer to its supplemental for currency translation rates embedded in this guidance.

The Company’s guidance is provided for informational purposes based on current plans and assumptions as is subject to change. The ranges for these metrics do not include the impact of acquisitions, dispositions, or capital markets activity beyond that which has been previously announced.

Investor Webcast and Conference Call

The Company will hold a webcast and conference call on Thursday, May 7, 2020 at 5:00 p.m. Eastern Time to discuss first quarter 2020 results. A live webcast of the call will be available via the Investors section of Americold Realty Trust’s website at www.americold.com. To listen to the live webcast, please go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.

The conference call can also be accessed by dialing 1-877-407-3982 or 1-201-493-6780. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 13701724. The telephone replay will be available starting shortly after the call until May 21, 2020.

The Company’s supplemental package will be available prior to the conference call in the Investors section of the Company’s website at http://ir.americold.com.

About the Company

Americold is the world’s largest publicly traded REIT focused on the ownership, operation, acquisition and development of temperature-controlled warehouses. Based in Atlanta, Georgia, Americold owns and operates 183 temperature-controlled warehouses, with over 1 billion refrigerated cubic feet of storage, in the United States, Australia, New Zealand, Canada, and Argentina. Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors and retailers to consumers.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, including FFO, core FFO, AFFO, EBITDAre, Core EBITDA and same store segment revenue and contribution. A reconciliation from U.S. GAAP net income (loss) available to common shareholders to FFO, a reconciliation from FFO to core FFO and AFFO, and definitions of FFO, and core FFO are included within the supplemental. A reconciliation from U.S. GAAP net income (loss) available to common shareholders to EBITDAre and Core EBITDA, a definition of Core EBITDA and definitions of net debt to Core EBITDA are included within the supplemental.

Forward-Looking Statements

This document contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include the following: adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry; general economic conditions; uncertainties and risks related to natural disasters, global climate change and public health crises, including the recent and ongoing COVID-19 pandemic; risks associated with the ownership of real estate and temperature-controlled warehouses in particular; defaults or non-renewals of contracts with customers; potential bankruptcy or insolvency of our customers; or the inability of our customers to otherwise perform under their contracts, including as a result of the ongoing COVID-19 pandemic; uncertainty of revenues, given the nature of our customer contracts; increased interest rates and operating costs, including as a result of the recent and ongoing COVID-19 pandemic; our failure to obtain necessary outside financing; risks related to, or restrictions contained in, our debt financings; decreased storage rates or increased vacancy rates; risks related to current and potential international operations and properties; our failure to realize the intended benefits from our recent acquisitions including synergies, or disruptions to our plans and operations or unknown or contingent liabilities related to our recent acquisitions; our failure to successfully integrate and operate acquired properties or businesses, including but not limited to: Cloverleaf Cold Storage, Lanier Cold Storage, MHW Group, Inc., Nova Cold Logistics, Newport Cold Storage and PortFresh Holdings, LLC; acquisition risks, including the failure of such acquisitions to perform in accordance with projections; risks related to expansions of existing properties and developments of new properties, including failure to meet budgeted or stabilized returns within expected time frames, or at all, in respect thereof; difficulties in expanding our operations into new markets, including international markets; risks related to the partial ownership of properties, including as a result of our lack of control over such investments and the failure of such entities to perform in accordance with projections; our failure to maintain our status as a REIT; our Operating Partnership’s failure to qualify as a partnership for federal income tax purposes; possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently or previously owned by us; financial market fluctuations; actions by our competitors and their increasing ability to compete with us; labor and power costs; changes in real estate and zoning laws and increases in real property tax rates; the competitive environment in which we operate; our relationship with our employees, including the occurrence of any work stoppages or any disputes under our collective bargaining agreements and employment related litigation; liabilities as a result of our participation in multi-employer pension plans; losses in excess of our insurance coverage; the cost and time requirements as a result of our operation as a publicly traded REIT; changes in foreign currency exchange rates; the impact of anti-takeover provisions in our constituent documents and under Maryland law, which could make an acquisition of us more difficult, limit attempts by our shareholders to replace our trustees and affect the price of our common shares of beneficial interest, $0.01 par value per share, of our common shares; the potential dilutive effect of our common share offerings; and risks related to any forward sale agreement, including the forward sale agreement we entered into with an affiliate of BofA Securities, Inc. in September 2018, as amended, or the 2018 forward sale agreement, including substantial dilution to our earnings per share or substantial cash payment obligations.

Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” and similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements included in this document include, among others, statements about our expected acquisition and expected expansion and development pipeline and our targeted return on invested capital on expansion and development opportunities. We qualify any forward-looking statements entirely by these cautionary factors. Other risks, uncertainties and factors, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Form 8-K filed April 16, 2020, could cause our actual results to differ materially from those projected in any forward-looking statements we make.

Contacts

Americold Realty Trust

Investor Relations

Telephone: 678-459-1959

Email: investor.relations@americold.com

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