Industry Overview - The broader cold storage industry is experiencing a decline due to oversupply [1] - Lineage (LINE) presents a compelling investment opportunity due to its technological leadership [1] Company Analysis - Lineage has structural cost advantages over competitors like Americold [1] - The company's technological advancements contribute to its competitive edge in the market [1]

Establishes Finance Committee to Support Ongoing Efforts to Enhance Shareholder Value Enters Into Cooperation Agreement with Ancora ATLANTA, Dec. 22, 2025 (GLOBE NEWSWIRE) -- Americold Realty Trust, Inc. (NYSE: COLD) (“Americold” or 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 the appointment of Joseph Reece and Stephen Sleigh to ...

Core Viewpoint - A lawsuit is pending against Lineage, Inc. for alleged violations of securities laws related to its July 2024 IPO, claiming that the company misrepresented its financial health and market conditions [1] Summary by Relevant Sections Lawsuit Details - The lawsuit was filed by an investor on August 1, 2025, alleging that the registration statement for Lineage's IPO was false and misleading [1] - The plaintiff claims that Lineage was experiencing a decline in customer demand due to increased cold-storage supply and destocking of excess inventory from the COVID-19 pandemic [1] - It is alleged that Lineage's customers shifted to maintaining leaner cold-storage inventories, impacting the company's revenue and occupancy rates [1] Financial Performance Claims - The lawsuit asserts that instead of stable revenue growth and high occupancy rates as claimed, Lineage was facing stagnant or declining revenue, occupancy rates, and rent prices [1] - The company reportedly implemented price increases prior to the IPO that could not be sustained due to the weakening demand environment [1] - The plaintiff argues that Lineage was unable to counteract these adverse trends through operational efficiencies or competitive advantages [1]

Core Insights - Lineage Inc. is expanding its U.S. operations with the construction of an automated cold-storage facility in Hutchins, Texas, expected to open in late 2027, amid a challenging financial environment due to tariff pressures [1][2][5] Group 1: Expansion Plans - The new facility in Hutchins is the first of two next-generation automated warehouses designed for a long-time customer, enhancing Lineage's capabilities in a key market [2] - The location near Union Pacific's Dallas Intermodal Terminal allows Lineage to serve both domestic and cross-border markets effectively [3] - This expansion follows a recent increase in capacity at Lineage's Hobart, Indiana facility, which is now the largest in North America, adding 188,000 square feet and 58,000 pallet positions [4] Group 2: Financial Performance - Lineage reported a third-quarter net loss of $112 million, despite a 3% year-over-year increase in consolidated revenue to $1.38 billion [6] - Physical occupancy rates were at 75.2%, slightly below the previous year but showing sequential improvement [6] - The company has adjusted its full-year 2025 guidance downward due to ongoing tariff uncertainties and high food prices affecting inventory levels [5] Group 3: Market Dynamics - Despite challenges from tariffs and inflation, consumer demand for products within Lineage's network continues to grow [7]

Financial Data and Key Metrics Changes - The third-quarter AFFO per share was reported at $0.35, aligning with expectations despite ongoing industry challenges from lower consumer demand and increased supply [17][22] - Same-store economic occupancy decreased to 75.5%, reflecting continued demand pressure, while same-store throughput saw a slight sequential increase due to the annual agricultural harvest [22][23] - Same-store NOI contracted from the prior quarter primarily due to seasonal increases in power costs, although rent and storage revenue per economic pallet increased both sequentially and year-over-year [22][23] Business Line Data and Key Metrics Changes - Approximately 30% of capacity and revenue comes from production-attached facilities, which are viewed as valuable assets for future expansion [10] - Four distribution centers account for about 50% of capacity and 40% of revenue, facing pricing competition due to excess capacity [12] - Retail distribution centers represent about 10% of capacity and 20% of revenues, with growth expected as the company expands capabilities overseas [14] Market Data and Key Metrics Changes - The Asia-Pacific region's total warehouse NOI increased by approximately 16% year-to-date, with economic occupancy well over 90% [18] - The macro environment remains challenging, with customer commentary indicating constrained demand, particularly among lower-income consumers [19] - The company anticipates that excess capacity will take a couple of years to be fully absorbed, with pricing gains expected to moderate in the fourth quarter [26][54] Company Strategy and Development Direction - The company aims to grow market share in the fast-turning retail sector and expand its quick service restaurant business into new geographies [6] - A focus on maintaining fixed-commitment contracts is emphasized, as they provide stable cash flows and long-term customer relationships [8][23] - The company is actively managing its real estate portfolio, exiting low-occupancy facilities while evaluating triple-net lease arrangements to drive occupancy levels [20][24] Management's Comments on Operating Environment and Future Outlook - Management believes that current headwinds are largely transitory, with expectations for pricing and occupancy pressures in 2026 [19][25] - The company is confident in the long-term trajectory of the cold storage industry, citing unique value propositions and mission-critical infrastructure [21][27] - Management is focused on identifying new sales opportunities and expanding into potential new sectors, including both food and non-food categories [20][54] Other Important Information - The company has a development pipeline of approximately $1 billion in attractive opportunities, balancing capital allocation with maintaining dividends and an investment-grade profile [24][62] - The company is trading at a significant discount to intrinsic value, with a historically high cap rate of around 10% [29][30] Q&A Session Summary Question: How should we think about throughput over the next 12 months? - Management indicated that throughput is expected to remain challenged due to lower demand, particularly from lower and middle-income consumers, with muted seasonal demand anticipated [32][33] Question: What are you doing to control costs in the business? - Management highlighted effective cost control measures, including matching direct labor to throughput, which has helped maintain handling margins above 12% [35][37] Question: Should we expect more fixed commitment contracts to be up for renewal in the beginning of the year? - Management clarified that contract renewals are spread throughout the year based on when they are signed, rather than being concentrated in specific quarters [41] Question: What happens to low-occupancy facilities from a P&L perspective? - Management explained that costs associated with low-occupancy facilities are generally minimal and may be capitalized once removed from active status, with customers often moved to owned infrastructure [44] Question: How do you see the new competition in the industry? - Management noted that many new market entrants are struggling with unsustainable business models, which could lead to accelerated exits from the market [50][52]

Company Overview - Americold is a global leader in the cold storage industry, operating an integrated network of strategically located warehouses[6, 79] - The company possesses significant scale with a global footprint, including 1,232 million cubic feet of capacity in North America and 114 million cubic feet in Europe[10] - Americold has approximately 13,000 associates and serves around 3,000 customers[10] Financial Performance - The company's LTM PF Core EBITDA is $615 million[12] - Adjusted FFO has grown by 34%, from $299 million in 2021 to $406 million in LTM Q3 2025[14] - Total Segment Contribution NOI has grown by 40%, from $630 million in 2021 to $834 million in LTM Q3 2025[14] Strategic Initiatives - Americold focuses on designing solutions that fit customer needs, supported by an in-house design engineering team[21] - The company leverages strategic partnerships with CPKC and DP World to enhance its service offerings and expand its network[45] - Americold is implementing Project Orion to standardize processes, reduce manual work, and improve analytics[50] Market Position and Growth - Americold holds 18% of the North American cold storage market and 6% of the global market[56] - The company is transitioning from on-demand contracts to fixed storage committed contracts, which now account for 60% of total warehouse rent and storage revenues[63] - Americold is committed to sustainability initiatives, including reducing Scope 1 and 2 emissions by 9.48% from 2021, with a goal of 30% in 2030[75]

Core Insights - Americold Realty Trust reported total revenues of $663.7 million for Q3 2025, a decrease of 1.6% from $674.2 million in Q3 2024, primarily due to lower volumes in the warehouse segment and a decrease in transportation revenue [6][11] - The company delivered an Adjusted Funds From Operations (AFFO) of $0.35 per diluted share, consistent with the same quarter in the previous year [6][15] - The company reiterated its full-year 2025 outlook, indicating a cautious but stable approach amidst ongoing industry challenges [5][6] Financial Performance - Total revenues for Q3 2025 were $663.7 million, down 1.6% year-over-year [6][11] - The net loss for Q3 2025 was $11.4 million, or $0.04 per diluted share, compared to a net loss of $3.7 million, or $0.01 per diluted share in Q3 2024 [6][13] - Core EBITDA for Q3 2025 was $148.3 million, a decrease of 5.7% from $157.2 million in Q3 2024 [6][14] Operational Metrics - Global Warehouse segment same store revenues decreased by 1.6% on an actual basis and 1.5% on a constant currency basis compared to Q3 2024 [6][11] - The same store services margin decreased to 12.3% from 13.6% in Q3 2024 [6][11] - Economic occupancy percentage for same store warehouses was 75.5%, down from 78.3% in the previous year [24] Strategic Outlook - The CEO emphasized the company's commitment to operational excellence and strong execution, which are crucial for navigating current market conditions [3] - Americold is exploring ways to leverage partnerships and evaluate adjacent categories to drive occupancy throughout its network [3] - The company remains confident in its long-term potential, citing investments in labor, technology, and commercial leadership as key drivers for future growth [3]

Financial Data and Key Metrics Changes - Total revenue increased by 3% year-over-year, while adjusted EBITDA rose by 2% to $341 million, marking a quarterly record for the company [5] - Total AFFO grew by 6% year-over-year, with AFFO per share at $0.85, reflecting a 6% decline year-over-year [5] - Same store physical occupancy improved by 50 basis points sequentially to 75%, although same store NOI declined by 3.6% year-over-year [5][6] Business Segment Data and Key Metrics Changes - Global warehousing segment revenue grew by 4%, with total NOI slightly increasing to $384 million, while same warehouse NOI declined by 3.6% [13] - Global integrated solutions segment saw flat revenue, but NOI grew by 16% to $65 million, with an NOI margin increase of 250 basis points to 17.9% [16] Market Data and Key Metrics Changes - The U.S. market is experiencing a 20% decline in import-export container volumes, impacting revenue and occupancy [26][27] - Despite excess supply, the company maintains a total estimated average physical occupancy of 75% for 2025, down only 3 percentage points from 2021 [10] Company Strategy and Development Direction - The company is focused on driving competitive differentiation through customer success, leveraging network effects, and enhancing warehouse productivity [20] - The proprietary warehouse execution system, LinOS, has been deployed in seven sites, showing double-digit productivity improvements [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges near-term headwinds due to tariff uncertainties and lower U.S. new business expectations, but remains optimistic about long-term growth as the food industry normalizes [7][23] - The company expects a lower fourth quarter than previously anticipated, moving to the lower end of full-year guidance for both EBITDA and AFFO per share [19] Other Important Information - The company ended the quarter with total net debt of $7.55 billion and total liquidity of $1.3 billion [10] - Management is actively managing interest rate exposure and anticipates a total interest expense of $340 million to $360 million in 2026, approximately $80 million higher than the current year [18] Q&A Session Summary Question: Discussion on expected lower U.S. new business in Q4 - Management noted that tariff uncertainty is impacting import-export volumes, particularly in the West U.S. business unit, leading to a forecast of lower new business in Q4 [26][27] Question: Update on pricing strategy during the quarter - Management confirmed that there was no change to the pricing strategy, with a net price increase between 1% and 2% expected for the year [32] Question: Expectations on physical occupancy and excess capacity - Management indicated that new supply is trickling in, with expectations that it will remain low, and they are optimistic about key markets absorbing new capacity [35][36] Question: Concerns about the impact of SNAP benefits lapse - Management stated that even if SNAP benefits were eliminated, the impact on total food consumption would be minimal, around 1% [76][77] Question: Insights on international performance versus U.S. - Management highlighted that international markets are performing better due to lower competitive pressure and better occupancy levels compared to the U.S. [54][55] Question: Acquisition strategy and market opportunities - Management remains disciplined in capital deployment and is monitoring market opportunities, but is not interested in issuing equity at undervalued levels [57][58] Question: Update on fresh and frozen demand trends - Management referenced third-party data indicating continual growth in fresh and frozen food categories, despite elevated food inflation [61][62]

Core Insights - SciSafe's expansion of its biorepository network in East Brunswick highlights New Jersey's emerging role as a significant player in the cold storage sector, particularly for life sciences [1] Industry Summary - The new facility adds five million cubic feet of capacity and hundreds of cryogenic and ultra-low freezers, addressing the rising demand for temperature-controlled storage driven by biopharma innovation and healthcare logistics [2] - The strategic location near I-95 and Newark Liberty International Airport enables same-day cold chain fulfillment, facilitating the rapid movement of sensitive biologics and pharmaceuticals [3] - The facility's GMP-compliant infrastructure and advanced monitoring systems are designed to support advanced therapies, including cell and gene treatments, which require precise temperature control [4] Market Trends - New Jersey is becoming a competitive market for cold storage development, fueled by scientific expertise, logistics advantages, and ongoing industrial investment [5] - Nationally, vacancy rates for cold storage facilities are low, with many new facilities pre-leased before construction begins, indicating strong demand [6] - New Jersey's advantages include a large population, a robust biopharma base, and proximity to the Port of New York and New Jersey, enhancing its logistics capabilities [7]

Core Insights - Americold's stock price has decreased by 65% over the last five years, which is atypical for a stable and necessary business like cold storage [1][7] - The significant price drop is attributed to market misinterpretation of cyclical trends, leading to overvaluation during peak inventory periods and subsequent undervaluation as earnings decline [2][6][10] Company Analysis - Americold is a global leader in cold storage, and despite the stock price decline, long-term business trends remain positive with analyst estimates indicating a rebound in earnings by 2027 [7][10] - The company was overvalued five years ago, and the current low stock price reflects a market correction following an oversupply situation that was not sustainable [8][12] - The market's tendency to extrapolate current trends has led to Americold trading at low multiples, despite the cyclical nature of its business [10][33] Financial Performance - The company has faced challenges with earnings guidance, cutting forecasts for revenue growth and same-store revenue [17][18] - Service revenue remains strong, indicating continued customer demand, while storage revenue has declined due to lower inventory levels [21][19] - Current margins are stable, but higher electricity costs have impacted profitability; however, cost-cutting measures have helped maintain margins [25][22] Valuation Metrics - Americold's stock is currently trading at 55% of its net asset value and at a forward consensus AFFO multiple of 9.5X, which is lower than industry peers [26][27][32] - Adjusted AFFO shows a true earnings figure of approximately $0.87 per share, leading to a 14.6X multiple on true AFFO, which is still cheaper than most competitors [31][33] - Analysts suggest that the stock is undervalued at 14.5X trough AFFO, with potential for recovery as fundamentals improve [33][34]