Americold Realty Trust, Inc. Announces Third Quarter 2023 Results

Delivers Strong Operational Results and Raises Annual Guidance

Raises Common Equity to Support New Growth Initiatives

ATLANTA, GA., Nov. 02, 2023 (GLOBE NEWSWIRE) -- Americold Realty Trust, Inc. (NYSE: COLD) (the “Company”), a global leader in temperature-controlled logistics, real estate, and value-added services focused on the ownership, operation, acquisition and development of temperature-controlled warehouses, today announced financial and operating results for the third quarter ended September 30, 2023.

George Chappelle, Chief Executive Officer of Americold Realty Trust, stated, “We are pleased with our third quarter results where we delivered AFFO per share of $0.32, an increase of over 10% versus prior year’s quarter.   This performance was primarily driven by our global warehouse same store pool, which generated NOI growth of 5.3%, on a constant currency basis.   Our strong same-store pool results were the result of meaningful economic occupancy growth and our continued pricing initiatives. Our same store economic occupancy increased 345 basis points over prior year to 84.0%, a record-setting third quarter level.   Additionally, this quarter, we derived 50.4% of rent and storage revenue from fixed commitment storage contracts, which is another record-setting level for Americold.   Lastly, in the face of a challenging throughput volume environment, we made progress on our Services margins through aggressive variable cost management.”

“During the quarter, we successfully raised $419 million in common equity by issuing 13.2 million shares at a weighted average price of $31.63 per share through our ATM program.   This capital raise improved our balance sheet by reducing leverage and provides the fuel for growth in support of our development and M&A initiatives.   Additionally, we are excited to announce an $85 million expansion of our Allentown, Pennsylvania facility, an example where we are seeing very strong demand from our customer base in key distribution markets within our network.   We continue to evaluate development opportunities across three primary areas of focus: expansion projects; customer-dedicated, build-to-suit developments; and our CPKC and DP World collaborations.   Also, today, we announced the strategic, tuck-in acquisition of Safeway Freezers, a temperature-controlled company located in Southern New Jersey for a total investment of approximately $37 million.   New Jersey is a strategic market for Americold where we own 15 facilities, and this acquisition complements our existing portfolio in this market.”

“As a result of the progress we have made around economic occupancy and pricing combined with our ability to manage all aspects of our variable cost structure within our same store pool, and the reduction of our interest expense due to the pay down of debt, we are raising our full year 2023 AFFO per share guidance to a new range of $1.24 to $1.30, and increase of $0.02 at the midpoint.”

Third Quarter 2023 Highlights

• Total revenue decreased 11.9% to $667.9 million.
• Total NOI increased 4.4% to $189.1 million.        
• Net loss of $2.1 million, or $0.01 loss per diluted common share.
• Core EBITDA increased 9.2% to $144.0 million, and increased 9.9% on a constant currency basis.
• Core FFO of $69.6 million, or $0.25 per diluted common share.
• AFFO of $88.2 million, or $0.32 per diluted common share.
• Global Warehouse segment revenue increased 0.6% to $602.6 million.
• Global Warehouse segment NOI increased 6.7% to $177.8 million.
• Global Warehouse segment same store revenue was flat on an actual basis, or, decreased 0.6% on a constant currency basis, Global Warehouse segment same store NOI increased by 4.5%, or 5.3% on a constant currency basis.
• On July 7, we completed the acquisition of a cold storage facility in Brisbane (Ormeau), Australia for approximately A$36.1 million.
• Completed the expansion projects for Spearwood, Australia and Russellville, Arkansas for approximately A$63 million and $84 million respectively. The Spearwood and Russellville facilities consist of 3.3 million cubic feet and 20,000 pallet positions, and 13 million cubic feet and 42,000 pallet positions respectively.
• Issued 13.2 million shares for net proceeds of $412.9 million, which was used to repay a portion of outstanding revolver borrowings.

Year to Date 2023 Highlights

• Total revenue decreased 9.1% to $1.99 billion.
• Total NOI increased 10.4% to $560.7 million.
• Net loss of $109.4 million, or $0.40 loss per diluted common share.
• Core EBITDA increased 13.5% to $411.8 million, or 14.8% on a constant currency basis.
• Core FFO of $192.9 million, or $0.71 per diluted common share.
• AFFO of $243.6 million, or $0.89 per diluted common share.
• Global Warehouse segment revenue increased 4.4% to $1.78 billion.
• Global Warehouse segment NOI increased 13.3% to $525.5 million.
• Global Warehouse segment same store revenue increased 4.3%, or 5.4% on a constant currency basis, Global Warehouse segment same store NOI increased 13.5%, or 14.6% on a constant currency basis.
  

Third Quarter 2023 Total Company Financial Results

Total revenue for the third quarter of 2023 was $667.9 million, a 11.9% decrease, which was driven by decreases in our Third-party managed and Transportation segments, largely offset by growth within our Global Warehouse segment. The growth within our Global Warehouse segment was driven by our pricing initiatives, rate escalations, improvements in economic occupancy and incremental revenue from recently completed expansion and development projects, partially offset by a decline in throughput due to consumer buying habits, and the unfavorable impact of foreign currency translation.

Total NOI for the third quarter of 2023 was $189.1 million, an increase of 4.4% from the same quarter of the prior year. This increase is a result of the improvement in our Global Warehouse segment as previously mentioned above, partially offset by ongoing inflationary pressure on operating costs.

For the third quarter of 2023, the Company reported net loss of $2.1 million, or $0.01 loss per diluted share, compared to net loss of $8.9 million, or $0.03 loss per diluted share, for the comparable quarter of the prior year.

Core EBITDA was $144.0 million for the third quarter of 2023, compared to $131.9 million for the comparable quarter of the prior year. This reflects a 9.2% increase over prior year on an actual basis, and 9.9% on a constant currency basis. The increase is due to the same factors driving the increase in NOI mentioned above.

For the third quarter of 2023, Core FFO was $69.6 million, or $0.25 per diluted share, compared to $67.1 million, or $0.25 per diluted share, for the third quarter of 2022.

For the third quarter of 2023, AFFO was $88.2 million, or $0.32 per diluted share, compared to $79.3 million, or $0.29 per diluted share, for the same quarter of the prior year.

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.

Third Quarter 2023 Global Warehouse Segment Results

For the third quarter of 2023, Global Warehouse segment revenue was $602.6 million, an increase of $3.6 million, or 0.6%, compared to $599.0 million for the third quarter of 2022. This growth was principally driven by growth from our same store pool resulting from higher economic occupancy, our pricing initiative, and rate escalations. Additionally, our non-same store pool contributed revenue from our recently completed development projects and acquisitions. This was partially offset by lower throughput pallets due to consumer buying habits and the unfavorable impact of foreign currency translation.

Global Warehouse segment contribution (NOI) was $177.8 million for the third quarter of 2023 as compared to $166.7 million for the third quarter of 2022. Global Warehouse segment contribution (NOI) increased due to the drivers of warehouse revenue increase mentioned above, partially offset by the impact of inflationary pressures, start-up costs for our developments, and the unfavorable impact of foreign currency translation. Global Warehouse segment margin was 29.5% for the third quarter of 2023, a 169 basis point increase compared to the same quarter of the prior year.

We had 219 same store warehouses for the three months ended September 30, 2023. The following table presents revenues, contribution (NOI) and margins for our same store and non-same store warehouses with a reconciliation to the total financial metrics of our warehouse segment for the three months ended September 30, 2023. Refer to our “Real Estate Portfolio” section below for the composition of our non-same store pool.

(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.
(2) Refer to our “Real Estate Portfolio” section below for the composition of our non-same store pool.
(n/a = not applicable)
(n/r = not relevant)

(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.
(2) Refer to our “Real Estate Portfolio” section below for the composition of our non-same store pool.
(n/a = not applicable)
(n/r = not relevant)

Fixed Commitment Rent and Storage Revenue
As of September 30, 2023, $550.7 million of the Company’s annualized rent and storage revenue were derived from customers with fixed commitment storage contracts. This compares to $521.3 million at the end of the second quarter of 2023 and $379.3 million at the end of the third quarter of 2022. We continue to make progress on commercializing business under this type of arrangement. On a combined pro forma basis, assuming a full twelve months of acquisitions revenue, 50.4% of rent and storage revenue was 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 third quarter of 2023, economic occupancy for the total warehouse segment was 83.0% and warehouse segment same store pool was 84.0%, representing a 828 basis point and 821 basis point increase above physical occupancy, respectively. Economic occupancy for the total warehouse segment increased 293 basis points, and the warehouse segment same store pool increased 345 basis points as compared to the third quarter of 2022. The growth in occupancy reflects our customer service initiatives, paired with customers’ increased food production levels throughout the end of 2022 and 2023.

Real Estate Portfolio
As of September 30, 2023, the Company’s portfolio consists of 243 facilities. The Company ended the third quarter of 2023 with 238 facilities in its Global Warehouse segment portfolio and five facilities in its Third-party managed segment. The same store population consists of 219 facilities for the quarter ended September 30, 2023. The remaining 19 non-same store population consists of: two sites acquired through acquisition, 11 sites in the expansion and development phase, three leased sites that we purchased, one temporarily leased facility in Australia, one leased facility we ceased operations during fourth quarter of 2022 in anticipation of the upcoming lease maturity, and one leased site we exited in preparation to lease to a third party.

Balance Sheet Activity and Liquidity
As of September 30, 2023, the Company had total liquidity of approximately $823.8 million, including cash and capacity on its revolving credit facility. Total debt outstanding was $3.2 billion (inclusive of $234.5 million of financing leases/sale lease-backs and exclusive of unamortized deferred financing fees), of which 93% was in an unsecured structure. At quarter end, net debt to pro forma Core EBITDA was approximately 5.7x. The Company’s total debt outstanding includes $2.9 billion of real estate debt, which excludes sale-leaseback and financing lease obligations. The Company’s real estate debt has a remaining weighted average term of 5.5 years and carries a weighted average contractual interest rate of 3.8%. As of September 30, 2023, 89.0% of the Company’s total debt outstanding was at a fixed rate, inclusive of hedged variable-rate for fixed-rate debt. The Company has no material debt maturities until 2026, inclusive of extension options.

Dividend
On September 1, 2023, the Company’s Board of Directors declared a dividend of $0.22 per share for the third quarter of 2023, which was paid on October 13, 2023 to common stockholders of record as of September 30, 2023.

2023 Outlook
The Company is maintaining its annual AFFO per share guidance to be within the range of $1.24 - $1.30. Refer to page 40 of this Financial Supplement for the details of our annual guidance. The Company’s guidance is provided for informational purposes based on current plans and assumptions and 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, November 2, 2023 at 5:00 p.m. Eastern Time to discuss its third quarter 2023 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 fifteen 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#13740732. The telephone replay will be available starting shortly after the call until November 16, 2023.

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 a global leader in temperature-controlled logistics real estate and value added services. Focused on the ownership, operation, acquisition and development of temperature-controlled warehouses, Americold owns and/or operates 243 temperature-controlled warehouses, with approximately 1.5 billion refrigerated cubic feet of storage, in North America, Europe, Asia-Pacific, and South America. 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 NAREIT FFO, core FFO, AFFO, EBITDAre, Core EBITDA; same store segment revenue, contribution (NOI), margin, and maintenance capital expenditures. Definitions of these non-GAAP metrics are included in our quarterly financial supplement, and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included herein. Each of the non-GAAP measures included in this press release has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this press release may not be comparable to similarly titled measures disclosed by other companies, including other REITs.

Forward-Looking Statements
This press release 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: rising inflationary pressures, increased interest rates and operating costs; labor and power costs; labor shortages; our relationship with our associates, the occurrence of any work stoppages or any disputes under our collective bargaining agreements and employment related litigation; the impact of supply chain disruptions, including, among others, the impact on labor availability, raw material availability, manufacturing and food production and transportation; risks related to rising construction costs; 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; uncertainty of revenues, given the nature of our customer contracts; acquisition risks, including the failure to identify or complete attractive acquisitions or the failure of acquisitions to perform in accordance with projections and to realize anticipated cost savings and revenue improvements; 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; difficulties in expanding our operations into new markets, including international markets; uncertainties and risks related to public health crises, such as the COVID-19 pandemic; a failure of our information technology systems, systems conversions and integrations, cybersecurity attacks or a breach of our information security systems, networks or processes could cause business disruptions, loss of critical and confidential information, an adverse impact on our results and reputation, incurring additional and significant costs to address any malicious attack including costs to remediate and implement proactive, preventative actions against cyber breaches, including those related to the cyber matter which occurred on April 26, 2023; disruption caused by implementation of the new ERP system, potential cost overruns, timing and control risks and failure to recognize anticipated cost savings and increased productivity from the implementation of the new ERP system; defaults or non-renewals of significant customer contracts; risks related to privacy and data security concerns, and data collection and transfer restrictions and related foreign regulations; changes in applicable governmental regulations and tax legislation, including in the international markets; risks related to current and potential international operations and properties; actions by our competitors and their increasing ability to compete with us; changes in foreign currency exchange rates; the potential liabilities, costs and regulatory impacts associated with our in-house trucking services and the potential disruptions associated with our use of third-party trucking service providers to provide transportation services to our customers; liabilities as a result of our participation in multi-employer pension plans; risks related to the partial ownership of properties, including as a result of our lack of control over such investments, financial condition of JV partners, disputes with JV partners, regulatory risks, brand recognition risks and the failure of such entities to perform in accordance with projections; risks related to natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes; adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry; changes in real estate and zoning laws and increases in real property tax rates; general economic conditions; risks associated with the ownership of real estate generally and temperature-controlled warehouses in particular; 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; uninsured losses or losses in excess of our insurance coverage; financial market fluctuations; our failure to obtain necessary outside financing; risks related to, or restrictions contained in, our debt financings; decreased storage rates or increased vacancy 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 stockholders to replace our directors and affect the price of our common stock; the potential dilutive effect of our common stock offerings; the cost and time requirements as a result of our operation as a publicly traded REIT; and our failure to maintain our status as a REIT.

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 press release include those regarding our 2023 outlook and our migration of our customers to fixed commitment storage contracts. 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, 2022 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, and other reports filed with the Securities and Exchange Commission, could cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Contacts:

Americold Realty Trust, Inc.
Investor Relations
Telephone: 678-459-1959 
Email: investor.relations@americold.com

We view and manage our business through three primary business segments—warehouse, transportation, third-party managed. Our core business is our warehouse segment, where we provide temperature-controlled warehouse storage and related handling and other warehouse services. In our warehouse segment, we collect rent and storage fees from customers to store their frozen and perishable food and other products within our real estate portfolio. We also provide our customers with handling and other warehouse services related to the products stored in our buildings that are designed to optimize their movement through the cold chain, such as the placement of food products for storage and preservation, the retrieval of products from storage upon customer request, case-picking, blast freezing, produce grading and bagging, ripening, kitting, protein boxing, repackaging, e-commerce fulfillment, and other recurring handling services.

In our transportation segment, we broker and manage transportation of frozen and perishable food and other products for our customers. Our transportation services include consolidation services (i.e., consolidating a customer’s products with those of other customers for more efficient shipment), freight under management services (i.e., arranging for and overseeing transportation of customer inventory) and dedicated transportation services, each designed to improve efficiency and reduce transportation and logistics costs to our customers. We provide these transportation services at cost plus a service fee or, in the case of our consolidation or dedicated services, we may charge a fixed fee. We supplemented our regional, national and truckload consolidation services with the transportation operations from various warehouse acquisitions. We also provide multi-modal global freight forwarding services to support our customers’ needs in certain markets.

Under our third-party managed segment, we manage warehouses on behalf of third parties and provide warehouse management services to leading food manufacturers and retailers in their owned facilities. We believe using our third-party management services allows our customers to increase efficiency, reduce costs, reduce supply-chain risks and focus on their core businesses. We also believe that providing third-party management services allows us to offer a complete and integrated suite of services across the cold chain.

• these measures do not reflect our historical or future cash requirements for maintenance capital expenditures or growth and expansion capital expenditures;
• these measures do not reflect changes in, or cash requirements for, our working capital needs;
• these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
• these measures do not reflect our tax expense or the cash requirements to pay our taxes; and
• although depreciation and amortization are non-cash charges, the assets being depreciated will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements.