Americold Realty Trust, Inc.

and welcome to AmeriCold Realty Trust First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Kevin Reed, Vice President, Investor Relations. Thank you, Mr. Reed. You may begin.

Good afternoon. Thank you for joining us today for AmeriCold Realty Trust's first quarter 2024 earnings conference call. In addition to the press release distributed this afternoon, we have filed a supplemental package with additional detail on our results, which is available in the Investor Relations section on our website at www.ir.americold.com. This afternoon's conference call is hosted by AmeriCorps' Chief Executive Officer, George Chappell, President of AmeriCorps, Rob Chambers, and Chief Financial Officer, Jay Wells. Management will make some prepared comments, after which we will open up the call to your questions. On today's call, management's prepared remarks may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated. Forward-looking statements are based on current expectations, assumptions, and beliefs, as well as information available to us at this time and speak only as of the date they are made. And management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures. including court EBITDA and AFFO. The full definitions of these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures are contained in the supplemental information package available on the company's website. Now, I will turn the call over to George.

Thank you, Kevin, and thank you all for joining our first quarter 2024 earnings conference call. This afternoon, I am pleased to announce our financial results for the quarter and will highlight key operational metrics. I will then discuss our updated outlook for the remainder of the year. Rob will provide an update on our recent customer initiatives and growth activity, and Jay will provide a detailed walkthrough of our updated full year 2024 guidance. Let's begin with a snapshot of some key financial achievements for the quarter. We generated AFFO of $104.9 million or 37 cents per share, an increase of over 28% on a per share basis year over year. Our performance on a constant currency basis was driven in large part by significant improvements in our same store services margins, where we delivered a record first quarter of 10.7%. This was a 671 basis point improvement year over year, which resulted in an incremental $22 million of NOIs or roughly $0.08 a share in the first quarter. As growth appears to be slowing across the industrial REIT sector, we continue to demonstrate our ability to drive profitable organic growth across our platform. In the first quarter of 2023, we announced $100 million strategic investment in our ERP infrastructure, which is showing early positive returns. The system's first phase went live Monday of this week, and we've made numerous process improvements leading up to this launch that have resulted in enhanced revenue recognition, better labor and cost management, and helped drive our strong first quarter results. We are encouraged with the sustainable results to date and expect the system to deliver returns in line with our previously disclosed expectations. It's important to note our new system comes with AI capability embedded in the software. which we can utilize and customize to ensure we exploit the technology to its maximum potential going forward. On to our priorities. Our laser focus on customer service has been one of the main reasons our properties stay in such high demand, and this is evident in our same-store economic occupancy, which held solid in the quarter at approximately 81%. A key driver of our strong economic occupancy is continued progress selling fixed commitment contracts. Rent and storage revenue derived from fixed commitment storage contracts came in this quarter at 54.2%, 200 basis points higher than the previous quarter, and a 24% increase over the first quarter of 2023. We continue to move customers to these contracts, which helps smooth out the seasonality in our business and also acts as a leading indicator of positive things to come as customers sign them in anticipation of volume growth in the future. Our second priority, labor management, is one in which we have made significant strides in recent quarters. Continued improvement of our hiring and retention metrics have resulted in a perm to temp hours ratio of 78-22, which is a three percentage point year-over-year increase in a company record putting us well on our way to our publicly stated goal of 80-20. Additionally, we continue to make progress on our turnover, which is 40%, and is now in line with pre-COVID levels and an 800 basis point drop since last quarter. Lastly, our percentage of associates with less than 12 months of service now stands at 29%. This has improved 300 basis points since last quarter and is approaching the pre-COVID level of 23%. We introduced disclosure around labor management two-plus years ago, and at the time, we said making progress was a prerequisite to establishing sustainable, reliable services margins. Having now largely recovered our labor metrics to pre-COVID levels, supported by new leaders, systems, and processes, our same-store constant currency services margins significantly improved to 10.7%, which is a first-quarter record for AmeriCold resulting in an incremental $22 million of NOI or roughly $0.08 of AFFO per share year over year. The commercial and operational infrastructure we have put in place gives us the confidence that improved services margins will be sustainable and sets us up extremely well as consumer demand increases. Moving to pricing, in the first quarter, same-store rent and storage revenue per economic occupied pallet on a constant currency basis increased by 3.9% versus the prior year. And same-store services revenue per throughput pallet on a constant currency basis increased by 10.8%. Both were driven by pricing we put in place in the second half of 2023, coupled with the general rate increases at the start of this year. Pricing comps are expected to compress in the second half of this year as we anticipate a relatively benign environment associated with inflation-based rate actions. As always, we will continue to take a surgical approach to our pricing initiatives to continue to drive margin dollars and increase margin percent. Moving to development, I'm very happy to report progress on our two strategic partnerships. First, we broke ground last week in Kansas City on a $127 million project on the Canadian Pacific Kansas City Rail Line. This is the inaugural project in our partnership and will deliver unique value-add services enabling lower costs, reliable, and more environmentally friendly storage and transport across much of North America. Second, we broke ground early this week in Dubai in support of our partnership with DP World. The $35 million project will support both the local Dubai market and the surrounding area redistribution. We are very pleased to have both partnerships' inaugural projects under active construction. Lastly, today, we are announcing a new, lower-risk, highly accretive expansion in Sydney, Australia. The $36 million project will support a large Australian retailer already located on the site as we enable their growth. We expect this expansion to be completed in Q1 of 2026. Turning to our full year guidance, as a result of the progress we have made driving organic growth through improvements in productivity, labor management, and pricing, in combination with our ability to manage our variable cost structure, we are raising our full year 2024 AFSO per share guidance to a new range of $1.38 to $1.46, with a midpoint of $1.42, an increase of 5 cents per share. This represents an approximately 12% increase from 2023 and an approximately 28% increase from 2022. At the midpoint of the new range, our same store NOI growth guide has increased roughly 300 basis points to over 11%. Before I turn it over to Rob, let me comment on our ESG initiative. In April, we posted our fifth annual ESG report on our website. We are very pleased to publish the most comprehensive report in the cold storage industry. Our report focuses on our efforts in promoting energy excellence through innovation and new technology adoption, investing in our associates, and giving back to our communities. I encourage you to read this robust sustainability report as it details AmeriCoast's sustainability goals and our unwavering commitment to corporate responsibility. With that, I will turn it over to Rob.