LINE
Lineage, INC
NASDAQ
8-K: Lineage, Inc. Reports Mixed Q1 2025 Results Amid Landmark Tyson Foods Agreements
Sentiment:
Earnings Release
30 April 2025 7:06 AM
Lineage, Inc. announced its Q1 2025 financial results, featuring a revenue decrease but highlighted by landmark agreements with Tyson Foods.
Worse than expected
Revenue decreased by (2.7)% compared to the previous year.
Adjusted EBITDA decreased by (7.0)%, and the adjusted EBITDA margin also declined.
Same warehouse NOI decreased by (7.9)%, indicating challenges in maintaining growth in existing facilities.
Summary
- Lineage, Inc. reported a (2.7)% decrease in total revenue, reaching $1,292 million for Q1 2025.
- GAAP net income was breakeven, resulting in $0.01 per diluted common share.
- Adjusted EBITDA decreased by (7.0)% to $304 million, with the adjusted EBITDA margin declining by (110) bps to 23.5%.
- AFFO increased significantly by 48.0% to $219 million, and AFFO per share rose by 6.2% to $0.86.
- The company declared a quarterly dividend of $0.5275 per share, representing an annualized dividend rate of $2.11 per share.
- Lineage entered into definitive agreements with Tyson Foods, including acquiring four cold storage warehouses for $247 million and plans to design, build, and operate two automated cold storage warehouses.
- Lineage expects to deploy approximately $1 billion of capital over the coming years as part of the Tyson Foods agreements.
- The company is maintaining its full-year 2025 adjusted EBITDA guidance of $1.35 to $1.40 billion and adjusted AFFO per share guidance of $3.40 to $3.60.
- Uncertainty in the industry is heightened due to potential impacts of evolving U.S. tariff policies.
Sentiment
Score: 6
Explanation: The sentiment is mixed. While the company highlights positive developments like the Tyson Foods agreements and AFFO growth, there are also concerns about revenue decline, EBITDA decrease, and external uncertainties like tariff policies.
Positives
- AFFO and AFFO per share increased significantly, indicating improved funds from operations.
- Landmark agreements with Tyson Foods are expected to generate over $100 million in stabilized EBITDA.
- The company is maintaining its full-year 2025 adjusted EBITDA and AFFO per share guidance.
- Acquisition of Bellingham Cold Storage complements the existing portfolio in the Pacific Northwest.
- LinOS pilots are driving productivity improvements in conventional warehouses.
- The company has a strong cash flow and tax-efficient REIT structure.
Negatives
- Total revenue decreased by (2.7)% compared to the previous year.
- Adjusted EBITDA decreased by (7.0)%, and the adjusted EBITDA margin also declined.
- The company experienced more normal seasonal trends, leading to lower inventory levels compared to previous years.
- There is heightened uncertainty in the industry due to potential impacts of evolving U.S. tariff policies, causing customer hesitancy.
- Same warehouse NOI decreased by (7.9)%, indicating challenges in maintaining growth in existing facilities.
Risks
- General business and economic conditions could impact financial results.
- Continued volatility and uncertainty in credit and financial markets pose risks.
- The impact of tariffs and global trade disruptions on Lineage and its customers is a concern.
- Risks inherent in the real estate business, such as customer defaults and environmental liabilities, exist.
- Failure to successfully integrate acquired properties or businesses could affect performance.
- Inability to renew significant customer contracts could impact revenue.
- Supply chain disruptions could affect labor and raw material availability.
- Changes in government regulations could pose compliance challenges.
- Cybersecurity attacks or breaches of information security systems could disrupt operations.
- Failure to maintain REIT status could have adverse tax implications.
Future Outlook
The company maintains its full-year 2025 adjusted EBITDA guidance of $1.35 to $1.40 billion and adjusted AFFO per share guidance of $3.40 to $3.60. However, there is heightened uncertainty due to potential impacts of evolving U.S. tariff policies.
Management Comments
- 'The Tyson Foods agreements are the result of a long-standing relationship rooted in shared values,' said Greg Lehmkuhl, president and chief executive officer of Lineage.
- 'We're proud to partner with our valued customer on these landmark agreements, leveraging our global footprint, data-driven approach, LinOS, and automation technology,' added Greg Lehmkuhl.
- 'This is just another example of the unique value we can add to our customers,' stated Greg Lehmkuhl.
- Greg Lehmkuhl added, 'As expected, we experienced more normal seasonal trends in the first quarter after multiple years of elevated inventory levels.'
- Greg Lehmkuhl stated, 'Our team continues to control costs well and improve productivity in an uncertain environment for our customers, the major food companies.'
- Greg Lehmkuhl concluded, 'We believe we are well positioned given our leading network, innovative technology, and deep customer relationships.'
Industry Context
Lineage's performance is being viewed in the context of broader industry trends, including the impact of evolving U.S. tariff policies and customer hesitancy. The company's focus on automation and technology, particularly through LinOS, is aimed at improving productivity and adapting to changing market conditions.
Comparison to Industry Standards
- Lineage is the world's largest global temperature-controlled warehouse REIT, with a network of over 485 facilities.
- Comparable companies in the REIT sector include Prologis and Americold Realty Trust.
- Lineage's focus on automation and technology aligns with industry trends towards increasing efficiency and reducing costs.
- The company's agreements with Tyson Foods are significant, as they involve a major food producer and substantial capital deployment.
Stakeholder Impact
- Shareholders will be impacted by the dividend declaration and the company's financial performance.
- Employees will be affected by the integration of Tyson Foods employees and the company's focus on productivity improvements.
- Customers will benefit from the company's expanded network and technology-driven solutions.
- Suppliers and creditors will be impacted by the company's capital deployment and financial stability.
Next Steps
- Closing of asset acquisitions from Tyson Foods is expected in Q2 2025.
- Integration of acquired assets and welcoming of Tyson Foods employees.
- Tyson Foods to begin storing product at the Hazleton, PA warehouse.
- Development on two greenfield warehouses is expected to begin in the second half of 2025.
- Transition of acquired warehouses to public refrigerated warehouses as greenfield developments commence operations in 2027/2028 and beyond.
Key Dates
- December 31, 2024: Date of the Company's Annual Report on Form 10-K filing with the SEC
- March 31, 2025: End of the first quarter for which financial results are reported
- April 1, 2025: Acquired three warehouse campuses from Bellingham Cold Storage for $121M
- April 30, 2025: Date of the earnings release and conference call
- Q2 2025: Expected closing of asset acquisitions from Tyson Foods
- Second Half 2025: Expected groundbreaking for two greenfield warehouses
- 2027/2028: Expected commencement of operations for the two greenfield developments
Keywords
Lineage, cold storage, warehousing, REIT, financial results, EBITDA, AFFO, Tyson Foods, acquisitions, tariffs
LINE
Lineage, INC
NASDAQ
Sector: Real Estate
Filings with Classifications
Capital raise
17 June 2025 4:19 PM
Debt Offering Announcement
- Lineage OP, LP issued and sold $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
- The net proceeds from the offering were approximately $489 million.
Capital raise
10 June 2025 8:57 PM
Debt Offering Announcement
- Lineage OP, LP, the Company's operating partnership, priced an offering of $500,000,000 aggregate principal amount of 5.250% Senior Notes due 2030.
- The notes were priced at 98.991% of the principal amount.
- The notes are senior unsecured obligations, fully and unconditionally guaranteed by Lineage, Inc. and certain subsidiaries.
- Proceeds are intended to repay amounts outstanding under the revolving credit facility and for general corporate and working capital purposes.
- The notes are offered only to qualified institutional buyers under Rule 144A or non-U.S. persons under Regulation S.
Capital raise
10 June 2025 9:09 AM
Capital Raise Announcement
- Lineage OP, LP, the operating partnership of Lineage, Inc., has commenced a private offering of senior notes.
- The notes will be senior unsecured obligations of the Operating Partnership and fully and unconditionally guaranteed by Lineage, Inc. and certain subsidiaries.
- The offering is a private placement to qualified institutional buyers under Rule 144A and to certain non-U.S. persons under Regulation S.
- The net proceeds are intended for repayment of outstanding amounts under the revolving credit facility and for general corporate and working capital purposes.
Worse than expected
30 April 2025 7:12 AM
Quarterly Report
- The company's net revenues decreased compared to the same period last year.
- The company reported a net loss attributable to Lineage, Inc.
- Same warehouse NOI decreased, reflecting customer inventory rationalization.
- General and administrative expenses increased significantly due to higher stock-based compensation expenses.
Worse than expected
30 April 2025 7:06 AM
Earnings Release
- Revenue decreased by (2.7)% compared to the previous year.
- Adjusted EBITDA decreased by (7.0)%, and the adjusted EBITDA margin also declined.
- Same warehouse NOI decreased by (7.9)%, indicating challenges in maintaining growth in existing facilities.
Better than expected
28 April 2025 7:08 AM
Proxy Statement
- The company's IPO was the largest of 2024 and the largest REIT IPO in history, reducing leverage to under 5x.
- Lineage generated $5.3 billion in total revenue and maintained a 78% same warehouse physical occupancy rate.
- Over $760 million was deployed in growth capital, including acquisitions and greenfield developments.
- The company reached its 100th patent and continued piloting the rollout of LinOS, its proprietary warehouse execution system.
Worse than expected
26 February 2025 7:16 AM
Annual Results
- The company experienced a net loss of $0.8 billion, which is worse than expected.
Capital raise
26 February 2025 7:16 AM
Annual Results
- The company may attempt to access property-level secured debt, bank debt and the unsecured bond market, in each case across multiple currencies and geographies, which would provide it with capital-raising flexibility to fund its operations.
Capital raise
26 February 2025 7:09 AM
Earnings Release and Investor Presentation
- The company completed the largest REIT IPO of all time, raising $5.1B.
- The company has the capacity to deploy more than $1.5 billion of capital in 2025.
Worse than expected
6 November 2024 7:13 AM
Quarterly Report
- The company reported a significant net loss of $543 million, compared to a net loss of $50 million in the same period last year.
- The company's acquisition, transaction, and other expenses were significantly higher than the previous year, primarily due to IPO-related costs.
- The company's economic and physical occupancy rates decreased compared to the same period last year.
Better than expected
6 November 2024 7:05 AM
Quarterly Report
- The company's AFFO growth of 51.8% and AFFO per share growth of 20.0% significantly exceeded expectations.
- The successful IPO and achievement of investment-grade credit ratings are also better than expected results.
Capital raise
21 August 2024 4:32 PM
Quarterly Report
- The company closed its IPO on July 26, 2024, raising approximately $4.875 billion in net proceeds.
- The company issued 56,882,051 shares of common stock at a price of $78.00 per share.
- The underwriters exercised their option to purchase an additional 8,532,307 shares of common stock on July 31, 2024.
Worse than expected
21 August 2024 4:32 PM
Quarterly Report
- The company reported a net loss of $80 million for the quarter, a significant decrease compared to the prior year.
- The company's same warehouse pool saw a decrease in NOI of $8 million or 2.3% due to revenue and cost of operations factors.
Capital raise
24 July 2024 8:43 PM
Registration Statement
- Lineage, Inc. is registering 11,364,358 additional shares of common stock for potential sale.
- The maximum aggregate offering price for these shares is $886,419,924.00.
- This capital raise could be used for various corporate purposes, including acquisitions or debt repayment.
Worse than expected
22 July 2024 6:55 AM
S-11/A Filing
- Preliminary estimates for the quarter ended June 30, 2024 indicate a decrease in total revenue, same warehouse NOI, average physical occupancy, and average economic occupancy compared to the same period in 2023.
Capital raise
22 July 2024 6:55 AM
S-11/A Filing
- Lineage is offering 47,000,000 shares of common stock in an IPO.
- The company estimates net proceeds of approximately $3.4 billion from the offering.
- The company intends to use the net proceeds to repay debt and for general corporate purposes.
- Norges Bank Investment Management has indicated an interest in purchasing up to $900 million in shares.
Worse than expected
16 July 2024 7:03 AM
Merger Announcement
- Preliminary estimates for the quarter ended June 30, 2024 indicate a decrease in same warehouse NOI compared to the same period in 2023.
Capital raise
16 July 2024 7:03 AM
Merger Announcement
- Lineage is offering 47,000,000 shares of its common stock in an initial public offering.
- The underwriters have the option to purchase up to an additional 7,050,000 shares.
- Norges Bank Investment Management has indicated an interest in purchasing up to $900 million in shares.
Capital raise
26 June 2024 9:08 AM
Initial Public Offering
- Lineage, Inc. is offering shares of its common stock in an initial public offering.
- The company intends to use the net proceeds from the offering to repay a $2.4 billion delayed-draw term loan and for general corporate purposes.
- A directed share program will reserve a percentage of the shares for sale to company insiders and partners.
Worse than expected
26 June 2024 9:08 AM
Initial Public Offering
- Lineage reported a net loss of $162.8 million for the twelve months ended March 31, 2024.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.