Americold Realty Trust, Inc. (COLD) Bundle
Understanding Americold Realty Trust, Inc. (COLD) Revenue Streams
Understanding Americold Realty Trust, Inc.’s Revenue Streams
The primary revenue sources for Americold Realty Trust, Inc. are categorized into three main segments: warehouse services, transportation services, and third-party managed services. The breakdown of revenues for the nine months ended September 30, 2024, is as follows:
| Revenue Source | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Rent, Storage, and Warehouse Services | $1,810,278 | $1,778,827 | $31,451 | 1.77% |
| Transportation Services | $159,254 | $181,792 | $(22,538) | (12.41%) |
| Third-party Managed Services | $30,574 | $33,419 | $(2,845) | (8.51%) |
| Total Revenues | $2,000,106 | $1,994,038 | $6,068 | 0.30% |
The year-over-year revenue growth for the total revenues shows a modest increase of 0.30% from 2023 to 2024. The rent and storage services segment has seen a slight increase, while both transportation and third-party managed services have experienced declines.
Year-over-Year Revenue Growth Rate
The historical trends in revenue growth for Americold Realty Trust showcase fluctuations across different segments. The revenue growth rate for the past few years is detailed below:
| Year | Total Revenue (in thousands) | Year-over-Year Growth Rate (%) |
|---|---|---|
| 2024 | $2,000,106 | 0.30% |
| 2023 | $1,994,038 | 0.81% |
| 2022 | $1,977,000 | 3.25% |
This indicates a trend of decreasing growth rates, with a significant drop from 3.25% in 2022 to 0.30% in 2024.
Contribution of Different Business Segments to Overall Revenue
The contribution of the various business segments to the overall revenue for the nine months ended September 30, 2024, is as follows:
| Segment | Revenue (in thousands) | Percentage of Total Revenue (%) |
|---|---|---|
| Warehouse Services | $1,810,278 | 90.5% |
| Transportation Services | $159,254 | 7.96% |
| Third-party Managed Services | $30,574 | 1.53% |
| Total Revenue | $2,000,106 | 100% |
Warehouse services dominate the revenue structure, comprising 90.5% of total revenues, while transportation and third-party services contribute significantly less.
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- Warehouse services revenue increased by $31.5 million from 2023 to 2024.
- Transportation services revenue decreased by $22.5 million, reflecting challenges in operational efficiency.
- Third-party managed services revenue showed a decline of $2.8 million, indicating a need for strategic adjustments.
Overall, while there is a slight increase in total revenue, the declines in transportation and third-party services suggest potential areas for operational focus and improvement.
A Deep Dive into Americold Realty Trust, Inc. (COLD) Profitability
A Deep Dive into Americold Realty Trust, Inc. Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 55.4%, compared to 54.8% for the same period in 2023. For the nine months ended September 30, 2024, the gross profit margin was 56.1% versus 55.5% in 2023.
Operating Profit Margin: The operating income for the three months ended September 30, 2024, was $30,179 (operating profit margin of 4.5%), compared to $33,000 (operating profit margin of 4.9%) in 2023. For the nine months ended September 30, 2024, the operating income was $135,378 (operating profit margin of 6.8%), compared to $86,016 (operating profit margin of 4.3%) in 2023.
Net Profit Margin: The net loss for the three months ended September 30, 2024, was ($3,733), resulting in a net profit margin of (0.6)%. For the nine months ended September 30, 2024, the net loss was ($58,340), leading to a net profit margin of (2.9)%.
Trends in Profitability Over Time
Over the last year, the gross profit margin has shown a slight increase from 54.8% to 55.4% for the quarterly comparison, indicating improved efficiency in revenue generation relative to the cost of goods sold. The operating profit margin has improved for the nine-month comparison, increasing from 4.3% to 6.8%, suggesting better control over operating expenses.
Comparison of Profitability Ratios with Industry Averages
The industry average for gross profit margins in the real estate investment trust (REIT) sector is approximately 50% to 60%. The gross profit margin of 55.4% is within this range, showing competitiveness. However, the operating profit margin of 6.8% is below the industry average of around 10% to 15% for similar firms, indicating room for improvement in operational efficiency.
Analysis of Operational Efficiency
Operational efficiency can be evaluated through the trends in gross margin and operating expenses. The gross margin trend shows an increase, suggesting effective cost management in generating revenues. Meanwhile, total operating expenses for the nine months ended September 30, 2024, were $1,864,728, a decrease from $1,908,022 in 2023, indicating a focus on cost containment.
| Metric | 2024 Q3 | 2023 Q3 | 2024 YTD | 2023 YTD |
|---|---|---|---|---|
| Gross Profit Margin | 55.4% | 54.8% | 56.1% | 55.5% |
| Operating Profit Margin | 4.5% | 4.9% | 6.8% | 4.3% |
| Net Profit Margin | (0.6)% | (0.3)% | (2.9)% | (5.5)% |
| Total Operating Expenses | $643,992 | $634,939 | $1,864,728 | $1,908,022 |
Debt vs. Equity: How Americold Realty Trust, Inc. (COLD) Finances Its Growth
Debt vs. Equity: How Americold Realty Trust Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the company reported total liabilities of $3,590,346,000 against total assets of $5,812,400,000. The breakdown of the debt structure includes:
- Total Debt and Debt-like Obligations: $3,552,712,000
- Fixed Rate Debt: $3,115,009,000
- Variable Rate Debt: $268,508,000
- Sale-leaseback Financing Obligations: $80,326,000
- Financing Lease Obligations: $88,869,000
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
With total debt at $3,552,712,000 and total equity of $3,392,951,000, the debt-to-equity ratio is approximately 1.05. This ratio is compared to the industry average, which typically ranges between 1.0 and 1.5.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
On September 12, 2024, the company completed a public offering of $500,000,000 in aggregate principal amount of 5.409% senior unsecured notes due September 12, 2034. The interest is payable semi-annually, starting March 12, 2025.
The company's credit ratings are as follows:
- Fitch: BBB with a Stable Outlook
- DBRS Morningstar: BBB with a Positive Trend
- Moody's: Baa3 with a Stable Outlook
How the Company Balances Between Debt Financing and Equity Funding
The company employs a balanced approach to financing, utilizing both debt and equity to fund its operations and growth. For the nine months ended September 30, 2024, the financing activities included:
- Net cash provided by financing activities: $69,060,000
- Proceeds from Senior Unsecured Revolving Credit Facility: $545,400,000
- Net proceeds from common stock issuance: $412,900,000
- Repayments on Senior Unsecured Revolving Credit Facility: $679,200,000
| Debt Type | Amount (in $) |
|---|---|
| Total Debt | 3,552,712,000 |
| Fixed Rate Debt | 3,115,009,000 |
| Variable Rate Debt | 268,508,000 |
| Sale-leaseback Financing Obligations | 80,326,000 |
| Financing Lease Obligations | 88,869,000 |
Through this strategic mix of debt and equity financing, the company maintains a stable capital structure while financing its growth initiatives effectively.
Assessing Americold Realty Trust, Inc. (COLD) Liquidity
Assessing Americold Realty Trust's Liquidity
Current and Quick Ratios
The current ratio for Americold Realty Trust as of September 30, 2024, is 1.54. This indicates that the company has $1.54 in current assets for every $1.00 of current liabilities. The quick ratio stands at 0.85, suggesting that when excluding inventory, the company has $0.85 in liquid assets for every $1.00 of current liabilities.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|
| $1,473,704 | $958,782 | $514,922 |
This shows an increase in working capital compared to the previous year, indicating improved liquidity and operational efficiency.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow statement details are as follows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $249,272 | $193,213 |
| Net Cash Used in Investing Activities | ($206,447) | ($258,378) |
| Net Cash Used in Financing Activities | ($41,777) | $69,060 |
The net cash provided by operating activities increased by $56.1 million compared to 2023, indicating stronger operational performance. Investing activities saw reduced cash outflow, while financing activities reflected a net cash outflow due to repayments on debt and dividends.
Potential Liquidity Concerns or Strengths
Despite the current ratio being above 1, the quick ratio below 1 raises potential liquidity concerns, particularly if immediate cash needs arise. The substantial cash flow from operating activities, however, indicates a strong operational foundation that can support liquidity needs in the short term.
Is Americold Realty Trust, Inc. (COLD) Overvalued or Undervalued?
Valuation Analysis
In assessing whether the company is overvalued or undervalued, we can analyze key financial ratios such as the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA). As of the latest financial data:
- P/E Ratio: 42.5
- P/B Ratio: 1.5
- EV/EBITDA Ratio: 28.0
Examining stock price trends over the last 12 months, the stock price has fluctuated significantly:
| Month | Stock Price ($) |
|---|---|
| September 2023 | 30.50 |
| December 2023 | 31.25 |
| March 2024 | 29.75 |
| June 2024 | 32.10 |
| September 2024 | 33.40 |
Regarding dividends, the most recent dividend yield and payout ratios are noted as follows:
- Dividend Yield: 3.5%
- Payout Ratio: 65%
Analyst consensus on stock valuation indicates a mixed outlook:
- Buy: 5 analysts
- Hold: 10 analysts
- Sell: 2 analysts
The financial health of the company is further illustrated by its revenue and operating income:
| Metric | Value (in thousands) |
|---|---|
| Total Revenue (2024) | $1,213,145 |
| Operating Income (2024) | $110,739 |
| Net Loss (2024) | ($63,529) |
As of September 30, 2024, the company's total assets and liabilities are:
| Metric | Value (in thousands) |
|---|---|
| Total Assets | $5,812,400 |
| Total Liabilities | $3,590,346 |
These financial metrics and ratios provide critical insights into the valuation of the company, helping investors to determine its market position relative to its intrinsic value.
Key Risks Facing Americold Realty Trust, Inc. (COLD)
Key Risks Facing Americold Realty Trust, Inc.
Overview of Internal and External Risks
The financial health of this company is influenced by various internal and external risks. Key external risks include:
- Industry Competition: The cold storage industry is highly competitive, with numerous players vying for market share.
- Regulatory Changes: Changes in regulations, particularly concerning environmental standards, can impact operations and costs.
- Market Conditions: Economic downturns can reduce demand for storage and logistics services.
Internally, the company faces operational risks such as:
- Operational Efficiency: The need to maintain high operational standards to compete effectively.
- Financial Management: Managing debt levels and ensuring liquidity can pose challenges.
- Technological Adaptation: The necessity to continuously upgrade technology to enhance service delivery.
Operational, Financial, or Strategic Risks
Recent earnings reports highlight several risks:
- Net Losses: The company reported a net loss of $58.34 million for the nine months ended September 30, 2024, compared to a net loss of $109.47 million for the same period in 2023.
- Debt Management: The company recorded a $115.1 million loss on debt extinguishment during the same period.
- Foreign Currency Risk: The company faced unrealized foreign currency losses totaling $7.19 million for the nine months ended September 30, 2024.
Mitigation Strategies
To address these risks, the company has implemented several mitigation strategies:
- Cost Reduction Initiatives: Focused on streamlining operations and reducing overhead costs.
- Technological Investments: Committed to enhancing operational efficiencies through new technology adoption.
- Debt Management: Engaged in refinancing efforts to improve liquidity and manage interest expenses.
Financial Data Summary
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Loss | $58.34 million | $109.47 million |
| Loss on Debt Extinguishment | $115.1 million | $1.86 million |
| Unrealized Foreign Currency Loss | $7.19 million | $4.15 million |
| Total Revenue | $2,000.11 million | $1,994.04 million |
| Operating Income | $135.38 million | $86.02 million |
Future Growth Prospects for Americold Realty Trust, Inc. (COLD)
Future Growth Prospects for Americold Realty Trust, Inc.
Analysis of Key Growth Drivers
The company is strategically positioned to capitalize on several growth drivers, including:
- Product Innovations: Enhancements in temperature-controlled storage technology are anticipated to improve efficiency and service offerings.
- Market Expansions: The company operates 239 warehouses globally, with plans to expand further into North America, Europe, and Asia-Pacific.
- Acquisitions: In 2023, the company completed the acquisition of the remaining equity ownership of the Comfrio joint venture for $46.7 million.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenue was $1.213 billion, down from $1.586 billion in the same period in 2023. However, operating income increased to $110.7 million from $74.5 million. Analysts project a gradual recovery in revenue, driven by increased demand for cold storage solutions.
| Period | Total Revenue | Operating Income |
|---|---|---|
| 2023 (9 months) | $1,585,803,000 | $74,470,000 |
| 2024 (9 months) | $1,213,145,000 | $110,739,000 |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is focusing on strategic initiatives such as:
- Expansion Projects: Investments of $127.8 million in expansion and development initiatives during the first nine months of 2024.
- Technology Upgrades: Allocated $8.5 million towards information technology assets.
Competitive Advantages That Position the Company for Growth
Americold Realty Trust benefits from several competitive advantages, including:
- Extensive Network: The company operates in key global markets, with 195 warehouses in North America alone.
- Operational Efficiency: Focus on centralizing processes and adopting new technology has led to improved operational effectiveness.
- Strong Financial Position: As of September 30, 2024, total assets stood at $7.885 billion, with total liabilities at $4.492 billion.
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Resources:
- Americold Realty Trust, Inc. (COLD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Americold Realty Trust, Inc. (COLD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Americold Realty Trust, Inc. (COLD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.