Americold Realty Trust Announces Second Quarter 2018 Results
ATLANTA--(BUSINESS WIRE)--Aug 9, 2018--Americold Realty Trust (NYSE: COLD) (the “Company”), the world’s largest owner and operator of temperature-controlled warehouses, today announced financial and operating results for the second quarter ended June 30, 2018.
“We are very pleased with our second quarter results, which demonstrate our ability to deliver consistent growth, with our Global Warehouse segment same store revenue and contribution (NOI) increases of 2.8% and 8.1%, respectively. We continue to benefit from a favorable customer mix as well as our work to increase our fixed commitment contracts and drive productivity improvements. From an external growth perspective, we recently achieved stabilization at our Clearfield, Utah facility and expect to deliver our Middleboro, MA build-to-suit facility by the end of the third quarter, both of which we expect will contribute positively to future earnings. As the only publicly traded REIT in the temperature-controlled infrastructure and supply chain industry, we believe that the combination of our size and scale, deep industry knowledge, longstanding customer relationships, and the attractive, stable industry fundamentals positions us to create meaningful shareholder value over the long-term” stated Fred Boehler, President and Chief Executive Officer of Americold Realty Trust.
Second Quarter 2018 HighlightsTotal revenue was $394.7 million, a 4.0% increase over the same quarter last year; Global Warehouse segment revenue was $287.7 million, a 2.1% increase over the same quarter last year Total contribution (NOI) was $98.2 million, a 9.2% increase over the same quarter last year; Global Warehouse segment contribution (NOI) was $90.8 million, a 7.1% increase over the same quarter last year Net income of $29.4 million, or $0.20 per diluted common share, compared to a net loss of $8.4 million from the same quarter last year; excluding $8.4 million in gains on the sale of the Company’s Thomasville, GA facility, net income for the quarter would have been $21.0 million or $0.14 per diluted common share Core EBITDA of $73.6 million, a 5.6% increase over the same quarter last year Core Funds from Operations (“Core FFO”) of $43.1 million, or $0.29 per diluted common share Adjusted Funds from Operations (“AFFO”) of $39.8 million, or $0.27 per diluted common share Global Warehouse segment same store revenue grew 2.8% to $281.4 million, with segment contribution (NOI) improving 8.1% to $90.5 million, both over the same quarter last year
Second Quarter 2018 Total Company Financial Results
Total revenue for the second quarter ended June 30, 2018 was $394.7 million, a 4.0% increase from the same quarter of the prior year. This growth was largely driven by a more favorable customer mix, net new business, improvements in our commercial terms and contractual rate escalations within the Global Warehouse segment.
For the second quarter of 2018, the Company reported a net income of $29.4 million, or $0.20 per diluted share, compared to a net loss of $8.4 million for the same quarter of the prior year.
Total contribution (NOI) for the second quarter ended June 30, 2018 increased 9.2% to $98.2 million, compared to $89.9 million for the same quarter of the prior year.
Core EBITDA was $73.6 million for the second quarter of 2018, compared to $69.8 million for the same quarter of the prior year. This reflects a 5.6% increase over prior year while absorbing approximately $1.1 million of additional recurring public company expenses incurred in the second quarter of 2018.
For the second quarter of 2018, Core FFO was $43.1 million, or $0.29 per diluted share, compared to $25.0 million for same quarter of the prior year.
For the second quarter of 2018, AFFO was $39.8 million, or $0.27 per diluted share, compared to $19.7 million 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.
Second Quarter 2018 Global Warehouse Segment Results
For the second quarter of 2018, Global Warehouse segment revenues were $287.7 million, an increase of $6.0 million, or 2.1%, compared to $281.7 million for the second quarter of 2017. This growth was primarily driven by a more favorable customer mix, a shift to a greater number of fixed commitment storage contracts, and contractual rate escalations.
Warehouse segment contribution (NOI) was $90.8 million, or 31.6% of segment revenue for the second quarter of 2018, compared to $84.8 million, or 30.1% of revenue, for the prior year. This represents a 7.1% improvement in segment profitability over the second quarter of 2017 and an expansion of 150 basis points in segment margin period-over-period. The year-over-year profit growth was driven primarily by a more favorable customer mix, net new business, a shift to a greater number of fixed commitment storage contracts, continued leveraging of fixed expenses, and labor and other productivity improvements. The Company continues to generate productivity improvements with its ongoing focus on continuous improvement initiatives driven in part by further progression of its Americold Operating System (“AOS”).
The Company ended the second quarter of 2018 with 144 total facilities in its Global Warehouse segment portfolio. Of the 144 total facilities, 137 meet the Company’s definition of facilities with at least 24 months of consecutive “normalized operations” and are reported as “same store.” The remaining seven facilities are in various stages of operations and are classified as “non-same store.”
The following tables summarize the second quarter 2018 Global Warehouse full segment and same store metrics compared to the same period a year ago:
Fixed Commitment Rent and Storage Revenue
Annualized committed rent and storage revenue was $202.6 million, which represented 39.7% of total Warehouse segment rent and storage revenue for the quarter ended June 30, 2018 on a trailing twelve-month basis. On an absolute dollar basis, fixed commitment rent and storage revenue increased $4.9 million from the first quarter 2018.
Real Estate Portfolio
During the second quarter of 2018, the Company sold its 5.6 million cubic foot facility located in Thomasville, GA for $18.0 million and recorded a gain on the sale of $8.4 million. The Company also exited its 4.3 million cubic foot leased facility located in Vernon, CA.
Balance Sheet Activity and Liquidity
At June 30, 2018, the Company had total liquidity of approximately $569.6 million, including cash and capacity on its revolving credit facility. Total debt outstanding was $1.56 billion (including $159.2 million of capital leases/sale leasebacks), with a weighted average term of 4.2 years. The Company has no material debt maturities during the remainder of 2018 and all of 2019. At June 30, 2018, 64% of the Company’s total debt outstanding was at a fixed rate and on a trailing twelve-month basis, its net debt to Core EBITDA was approximately 4.8x. The Company’s weighted average effective interest rate on outstanding indebtedness was 5.43%.
On June 8, 2018, the Company’s Board of Trustees declared a dividend of $0.1875 per share for the second quarter of 2018, which was paid on July 16, 2018 to common shareholders of record on June 29, 2018.
Investor Webcast and Conference Call
The Company will hold a webcast and conference call on Thursday, August 9, 2018 at 5:00 p.m. Eastern Time to discuss second quarter 2018 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 1-877-407-4018 or 1-201-689-8471. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 13681436. The telephone replay will be available starting shortly after the call until August 23, 2018.
The Company’s supplemental package will be available prior to the conference call in the Investor Relations section of the Company’s website at http://ir.americold.com.
About the Company
Americold is the world’s largest owner and operator of temperature-controlled warehouses. Based in Atlanta, Georgia, Americold owns and operates 156 temperature-controlled warehouses, with approximately 924 million 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. Americold serves approximately 2,400 customers and employs approximately 11,000 associates worldwide.
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 available to common stockholders 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 available to common stockholders to EBITDAre and Core EBITDA, a definition of Core EBITDA and definitions of net debt to Core EBITDA are included within the supplemental.
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 adverse economic or real estate developments in our geographic markets or the temperature-controlled warehouse industry; general economic conditions; 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; uncertainty of revenues, given the nature of our customer contracts; increased interest rates and operating costs; our failure to obtain necessary outside financing; risks related to, or restrictions contained in, our debt financing; decreased storage rates or increased vacancy rates; difficulties in identifying properties to be acquired and completing acquisitions; risks related to expansions of existing properties and developments of new properties, including failure to meet budgeted or stabilized returns in respect thereof; acquisition risks, including the failure of such acquisitions to perform in accordance with projections; difficulties in expanding our operations into new markets, including international markets; our failure to maintain our status as a REIT; uncertainties and risks related to natural disasters and global climate change; 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; liabilities as a result of our participation in multi-employer pension plans; the cost and time requirements as a result of our operation as a publicly traded REIT; the concentration of ownership by funds affiliated with The Yucaipa Companies, The Goldman Sachs Group, Inc., and Fortress Investment Group, LLC; changes in foreign currency exchange rates; and 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.
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