Americold Realty Trust, Inc.

Greetings and welcome to the Mercold Realty Trust second quarter 2025 earnings conference 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, Rich Leland, Vice President of Investor Relations and Treasurer. Thank you, sir. You may begin.

Good morning. Thank you for joining us today for AmeriCold Realty Trust's second quarter 2025 earnings conference call. In addition to the press release distributed this morning, we have filed a supplemental financial package with additional details on our financial results, which is available in the Investor Relations section on our website at www.americold.com. This morning's conference call is hosted by AmeriCold's Chief Executive Officer, George Chappell, President Rob Chambers, and Chief Financial Officer, Jay Wells. Management will make some prepared comments, after which we'll open up the call to your questions. Before we begin, let me remind you that management's remarks today may contain forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those anticipated. These 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 these statements in light of new information or future events. During this call, we will also discuss certain non-GAAP financial measures, including NOI, constant currency, net debt to pro forma core 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. Please note that all warehouse financial results are in constant currency unless otherwise noted. Now, I will turn the call over to George.

Thank you, Rich, and thank you all for joining our second quarter 2025 earnings conference call. This morning, I will provide an update on our four key priorities, our financial results for the quarter, and current market conditions. Rob will then discuss our customer service initiatives and development activity. And finally, Jay will review our capital position and liquidity and discuss our outlook for the balance of the year. Turning to our four key priorities and financial results for the quarter, we said Q2 would look a lot like Q1, And that's exactly how it unfolded. Starting with customer service, during the quarter, AmeriCold was recognized as a top 3PL in cold storage provider by Food Logistics Magazine. This award honors cold storage companies that are revolutionizing the global cold storage food supply chain and reliably delivering innovative and high-quality solutions throughout the world. We are honored to be recognized. and I want to thank our incredible team for their continued dedication to providing our customers with best-in-class service. As anticipated, same-store economic occupancy declined slightly in the second quarter versus the first quarter of the year. Q2 is typically the lowest seasonal quarter of the year for us, although it is difficult to define typical in the current environment. While we are pleased with the new business wins from our sales pipeline, Occupancy gains have been slow to materialize given the ongoing demand headwinds. We recently had two new retail wins in Europe that are good examples of our strategy to expand our retail and QSR business across the globe and build on our leadership position. The profile of the retail and QSR businesses puts it near the top of our portfolio in terms of cash flow generation. Additionally, our rent and storage revenue from fixed commit contracts came in at 60% for the quarter, reflecting the quality of our mission-critical assets and the value we deliver to the customers who occupy them. Turning to labor, the investments we have made over the past few years in training, engagement, and retention initiatives continue to pay dividends. During the quarter, our perm to temp hours ratio was 75-25, giving us the ability to flex labor with demand while benefiting from the enhanced productivity that comes from having a dedicated and well-trained permanent workforce. You can see this reflected in the continued growth in our same-store warehouse services margins, which improved by 90 basis points year-over-year to 13.3% for the quarter. This continues to be a bright spot for the company, and we remain confident in our ability to deliver service margins in excess of 12% for the full year. Turning to pricing, in the second quarter, our same-store rent and storage revenue per economic occupied pallet increased approximately 1% versus the prior year. And same-store services revenue per throughput pallet increased by 4%. While we expect to see continued pricing pressure across our U.S. business, the team has done an excellent job of strategically defending our market share and maintaining our pricing architecture while ensuring that we receive fair value for the critical and diverse services we provide. We believe service and operational excellence will become an even more important differentiator for AmeriCold in the future as customers seek to turn inventory faster in an effort to realize working capital efficiencies. As I mentioned last quarter, AmeriCold is a trusted and experienced operator that delivers value to customers far beyond price propeller position. And therefore, we are more capable of balancing price and volume versus most competitors where price is their only lever. On the development front, we have several key projects that were completed in the second quarter, including Kansas City, our flagship development with CPKC, creating an efficient new way to move temperature-controlled products across North America, our Allentown expansion, which was driven by strong customer demand in the region, and our flagship development in Dubai in partnership with DP Worlds. Rob will discuss these further in just a moment. but these facilities are great examples of our ability to leverage our scale, expertise, and unique strategic partnerships to drive innovative new market solutions. Turning to our financial results for the quarter, Q2 AFFO per share was 36 cents. Our performance in the first half of the year has largely been on track, and the team continues to execute well. However, the combined impacts of interest rates, tariffs, inflation, government benefit reductions, and excess capacity continue to pressure occupancy rates across the industry. Based on our conversations with customers, we expect these headwinds will likely continue into the second half of the year as they remain hesitant to build inventory in an uncertain demand environment. With inventory levels low across the supply chain, We are also seeing customers taking the opportunity to leverage available capacity in their own infrastructure rather than utilizing third party storage providers. As a result of these continued headwinds, we are taking a more conservative view of the market for the second half of the year, removing the traditional seasonal inventory bill that we had been forecasting and now expect occupancy levels to remain pressured for the balance of the year. Despite these top-line challenges, the team continues to execute well on our strategic priorities, and we remain focused on controlling what we can control, including lowering costs, improving efficiencies, and capturing new business. We are also actively pursuing alternative growth opportunities, such as expanding our retail and QSR business, as I mentioned earlier, and focusing on investments in underserved geographies around the world in need of infrastructure. Additionally, because of the operating component of our business, we have more leverage than a traditional REIT, and this quarter is a great example of our ability to manage the variable pieces of our business in a balanced approach to deliver ASFO results in line with expectations. This ability to manage the business tightly will be increasingly important in the second half of this year as we further adjust our cost structure to reflect the current demand levels. Jay will discuss these changes in more detail in a moment. But first, I will turn the call over to Rob so he can discuss our development projects and customer initiatives in greater detail.