Americold Realty Trust(US:COLD)2021-08-05 16:00Warehouse Operations - As of June 30, 2021, the company operated 246 temperature-controlled warehouses with a total capacity of over 1.4 billion cubic feet[279]. - The company has a global presence with 200 warehouses in North America, 27 in Europe, 16 in Asia-Pacific, and 3 in South America[279]. - As of June 30, 2021, the company operated a total of 246 warehouses, with 162 classified as same-store warehouses[328]. - The average economic occupancy of warehouses is a key performance indicator, with a focus on transitioning customers to contracts featuring fixed storage commitments to mitigate seasonal fluctuations[315][317]. - The throughput at warehouses, which refers to the volume of pallets entering and exiting, is crucial for revenue generation, as customers are billed based on throughput levels[318]. - Economic occupancy at same stores decreased to 75.2% for the three months ended June 30, 2021, down 403 basis points from 79.2% in the same period of 2020[354]. - Average occupied economic pallets for same store sites decreased by 4.7% to 2,830 pallets, impacting economic occupancy percentage[350]. - Economic occupancy percentage for same store sites dropped to 76.0%, down from 80.9%[397]. - Average economic occupied pallets for same store sites decreased by 5.8% to 2,858[397]. Acquisitions and Expansion - The company acquired Agro Merchants for a total consideration of $1.59 billion, expanding its temperature-controlled warehouse and transportation services[293]. - The acquisition of Hall's Warehouse Corporation was completed for $489.2 million, enhancing the company's service offerings in the Northeast U.S.[296]. - The company acquired KMT Brrr! for $70.8 million, funded through its 2020 Senior Unsecured Revolving Credit Facility[291]. - The company holds a 14.99% ownership interest in Superfrio Armazéns Gerais S.A. for approximately $25.7 million, which operates 33 warehouses in Brazil[299]. - Approximately $229.8 million of the revenue increase was driven by acquisitions completed during 2020 and 2021, including 61 warehouse facilities acquired[385]. - The company expanded its non-same store sites to 75, up from 10 in the previous year[397]. - The company invested $63.5 million in two fully-automated development sites in Connecticut and Pennsylvania during the six months ended June 30, 2021[470]. - New development projects announced included an $8.7 million investment in the Atlanta major market phase 2 project and a $4.5 million investment in the Dunkirk NY expansion[471]. Financial Performance - For the three months ended June 30, 2021, sales to a significant customer were $64.1 million, compared to $64.4 million for the same period in 2020, indicating a slight decrease of 0.5%[314]. - For the six months ended June 30, 2021, sales to the same customer were $130.0 million, up from $120.0 million in 2020, reflecting an increase of 8.3%[314]. - Warehouse segment revenues for the three months ended June 30, 2021, were $503.7 million, a 35.3% increase from $372.4 million in the same period of 2020[336]. - The increase in warehouse segment revenues was driven by acquisitions totaling 64 facilities and contractual rate escalations, contributing approximately $120.6 million to revenue growth[336]. - Warehouse segment revenues for the six months ended June 30, 2021, were $989.2 million, an increase of $235.7 million or 31.3% compared to $753.5 million for the same period in 2020[385]. - Total warehouse segment revenues increased by 31.3% to $989,185,000 compared to $753,479,000 in the same period last year[395]. - Total same store revenues grew by 0.2% to $715,493,000, while total same store cost of operations increased by 1.8% to $480,766,000[393]. - Non-same store revenues surged by 600.2% to $273,692,000, with non-same store cost of operations rising by 534.6% to $217,859,000[393]. Costs and Expenses - The company reported that labor costs are the largest component of warehouse operations, influenced by headcount changes and compensation levels[281]. - Warehouse segment cost of operations rose to $359.4 million, reflecting a 42.4% increase compared to $252.3 million in the prior year[339]. - The increase in costs was attributed to power, labor, property tax, and insurance, reflecting current market trends[339]. - Total warehouse cost of operations rose by 37.9% to $698,625,000, up from $506,574,000 in the previous year[395]. - Labor costs increased to $438.9 million for the six months ended June 30, 2021, reflecting a 30.8% increase compared to $335.6 million for the same period in 2020[384]. - Corporate-level selling, general and administrative expenses were $42.5 million for the three months ended June 30, 2021, an increase of $10.1 million, or 31.3%, compared to $32.3 million in the same period of 2020[369]. - Corporate-level selling, general and administrative expenses rose to $87.5 million for the six months ended June 30, 2021, an increase of 26.4% from $69.2 million in the same period of 2020[416]. Depreciation and Amortization - The company incurred significant depreciation and amortization expenses due to the capital-intensive nature of its business[287]. - Depreciation and amortization expense rose to $84.5 million for the three months ended June 30, 2021, an increase of $32.1 million, or 61.2%, compared to $52.4 million in the same period of 2020[368]. - Depreciation and amortization expense was $161.7 million for the six months ended June 30, 2021, up 55.4% from $104.0 million in the same period of 2020[415]. COVID-19 Impact - The company expects to continue facing inefficiencies due to COVID-19 related operational changes[281]. - The company continues to monitor the impact of COVID-19 on operations, with ongoing uncertainties regarding its effects on financial performance and market conditions[304]. Currency and Taxation - The impact of foreign currency translation on revenues and expenses from international operations is significant, with fluctuations potentially affecting overall financial results[305][307]. - The foreign currency translation had a favorable impact of $13.1 million on revenues and $9.5 million unfavorable impact on expenses during the three months ended June 30, 2021[338][339]. - The foreign currency translation of revenues had a favorable impact of $25.0 million during the six months ended June 30, 2021, mainly due to the weakening of the U.S. dollar[387]. - The income tax expense for the three months ended June 30, 2021, was $9.0 million, an increase of $7.8 million from $1.2 million for the same period in 2020, primarily due to a tax rate change in the UK[380]. - Income tax expense for the six months ended June 30, 2021, was $8.2 million, a decrease of $6.5 million compared to the same period in 2020, influenced by a tax rate change in the UK[430]. Debt and Financing - The company had approximately $2.6 billion in outstanding debt as of June 30, 2021, with 81.94% being fixed-rate debt[457]. - The effective interest rate on outstanding debt decreased from 4.22% to 3.24% for the six months ended June 30, 2021, despite an increase in outstanding principal from $1.8 billion to $2.6 billion[424]. - Interest expense increased to $26.6 million for the three months ended June 30, 2021, up $3.4 million, or 14.7%, compared to $23.2 million in the same period of 2020[375]. - Interest expense increased by $5.5 million, or 11.7%, to $52.5 million for the six months ended June 30, 2021, compared to $47.0 million for the same period in 2020[424]. - Loss on debt extinguishment was $0.9 million for the three months ended June 30, 2021, primarily due to the amortization of fees for the termination of interest rate swaps[377]. - Loss on debt extinguishment and modifications was $4.4 million for the six months ended June 30, 2021, primarily due to early repayment of $200 million on the Senior Unsecured Term Loan A Facility[426]. Revenue Streams - Transportation revenues increased to $78.8 million for the three months ended June 30, 2021, a rise of $43.9 million, or 126.0%, compared to $34.9 million in the same period of 2020[364]. - Transportation revenues surged to $155.1 million for the six months ended June 30, 2021, an increase of 119.1% compared to $70.8 million in the same period of 2020[412]. - Third-party managed revenues were $72.2 million for the three months ended June 30, 2021, a decrease of $0.8 million, or 1.1%, compared to $73.0 million in the same period of 2020[359]. - Third-party managed revenues increased to $145.2 million for the six months ended June 30, 2021, a rise of 5.3% from $137.9 million in the same period of 2020[406]. Miscellaneous - The company has implemented a shared services support structure to manage costs and enhance operational efficiency[288]. - The company has implemented various cost-reduction initiatives, including energy efficiency projects, which have led to reduced energy consumption and costs[310]. - The strategic shift in the transportation segment aims to focus on temperature-controlled warehouses, moving away from low-margin services to more profitable, value-added programs[313]. - The company has exited less strategic markets and business lines, including the sale of certain warehouse assets and the exit of the China joint venture, as part of active portfolio management[312]. - The company is required to distribute 90% of its taxable income annually to maintain its REIT status, which it has consistently met by distributing at least 100% of taxable income since inception[452]. - The company has entered into an equity distribution agreement allowing for the sale of up to $900 million of common shares through an ATM equity program[448].