LINE
Lineage, INC
NASDAQ
8-K: Lineage Inc. Reports Strong Third-Quarter Results Following Record IPO
Sentiment:
Quarterly Report
6 November 2024 7:05 AM
Lineage, Inc. announced its third-quarter 2024 financial results, highlighting significant growth in adjusted funds from operations (AFFO) and the completion of the largest real estate IPO of all time.
Better than expected
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.
Summary
- Lineage, Inc., the world's largest global temperature-controlled warehouse REIT, released its financial results for the third quarter of 2024.
- The company raised $5.1 billion in gross proceeds from its July 2024 IPO, which was the largest real estate IPO ever.
- Total revenue increased by 0.5% to $1.3 billion, while the net loss was ($543) million, or ($2.44) per diluted common share.
- Total net operating income (NOI) increased by 2.1% to $439 million, and adjusted EBITDA increased by 5.4% to $333 million.
- Adjusted EBITDA margin improved by 110 basis points to 24.9%.
- AFFO increased significantly by 51.8% to $208 million, with AFFO per share increasing by 20.0% to $0.90.
- The company used IPO proceeds to reduce $4.9 billion of debt and achieved investment-grade credit ratings from Fitch and Moody's.
- Lineage declared an initial quarterly dividend of $0.38 per share, representing an annualized dividend rate of $2.11 per share.
- A new, fully automated cold storage warehouse was opened in Hazleton, PA, and ColdPoint Logistics was acquired for $223 million on November 1st.
- The company expects full-year 2024 AFFO per share of $3.16 to $3.20 and for the fourth quarter of 2024, expects AFFO of $180 to $190 million, AFFO per share of $0.70 to $0.74, and low single-digit same warehouse NOI growth.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial growth, successful IPO, and strategic acquisitions. While there are some challenges, the overall tone is optimistic and indicates a well-positioned company for future growth.
Positives
- The successful IPO provided significant capital for debt reduction and strategic acquisitions.
- The company's strong AFFO growth demonstrates its ability to generate cash flow.
- The achievement of investment-grade credit ratings enhances the company's financial stability.
- The acquisition of ColdPoint Logistics expands Lineage's market presence and service capabilities.
- The opening of a new automated facility in Hazleton, PA, showcases the company's technological advancements.
- The company's dividend policy provides a return to shareholders.
- The company is well-positioned to drive compounding growth due to its industry-leading real estate portfolio and innovative technology.
Negatives
- The company reported a net loss of ($543) million for the quarter.
- Total revenue growth was modest at 0.5%.
- Same warehouse occupancy is under pressure from customer inventory rationalization.
- The Global Integrated Solutions segment experienced a challenging demand environment for transportation solutions.
- The company expects a muted seasonal occupancy pickup in Q4.
Risks
- The company is subject to general business and economic conditions, including volatility in credit and financial markets.
- There are risks inherent in the real estate business, such as customer defaults and environmental liabilities.
- The company faces competition and may not be able to generate sufficient cash flows to service its debt.
- There are risks associated with managing an international business and acquiring properties in foreign jurisdictions.
- The company's performance is subject to changes in consumer demand and preferences.
- The company is exposed to risks related to information technology systems, cybersecurity, and regulatory compliance.
- The company's ability to maintain its status as a REIT is subject to changes in tax laws.
Future Outlook
The company expects full-year 2024 AFFO per share of $3.16 to $3.20. For the fourth quarter of 2024, the company expects AFFO of $180 to $190 million, AFFO per share of $0.70 to $0.74, and low single-digit same warehouse NOI growth. The outlook excludes the impact of unannounced future acquisitions or developments.
Management Comments
- Greg Lehmkuhl, president and chief executive officer of Lineage, Inc., stated that the company is excited to report strong results for its first quarter as a public company.
- He also mentioned that the company generated significant AFFO per share growth this quarter aided by the successful IPO and continued strong operating performance.
- He added that the company is well-positioned to drive compounding growth, benefiting from its industry-leading real estate portfolio, innovative technology, and strategic capital deployment engine.
- He expressed pleasure in announcing the acquisition of ColdPoint Logistics and welcomed them to the Lineage family.
Industry Context
Lineage operates in the temperature-controlled warehousing sector, a critical part of the food supply chain. The company's performance is influenced by factors such as supply chain disruptions, customer inventory levels, and economic conditions. The acquisition of ColdPoint Logistics is a strategic move to expand its presence in key markets and enhance its service offerings. The company's focus on technology and automation aligns with industry trends towards increased efficiency and sustainability.
Comparison to Industry Standards
- Lineage's IPO was the largest real estate IPO of all time, indicating a strong market interest in the company and its sector.
- The company's AFFO growth of 51.8% is significantly higher than the industry average, suggesting strong operational performance.
- The achievement of investment-grade credit ratings from both Fitch and Moody's is a positive sign of financial stability and is better than many of its competitors.
- The company's focus on automation and technology is in line with industry trends, but its scale and proprietary software give it a competitive advantage.
- Compared to competitors such as Americold and United States Cold Storage, Lineage's global reach and network of over 480 facilities is a significant differentiator.
- The company's same warehouse NOI growth of 2.4% is lower than the 11.0% reported in the same quarter last year, indicating some headwinds in the current market.
Stakeholder Impact
- Shareholders will benefit from the company's strong financial performance and dividend policy.
- Employees may benefit from the company's growth and expansion.
- Customers will benefit from the company's expanded network and service capabilities.
- Suppliers and creditors will benefit from the company's financial stability and growth.
Next Steps
- The company will continue to execute on its pipeline of attractive opportunities.
- Lineage will focus on driving compounding growth through its real estate portfolio, technology, and strategic capital deployment.
- The company will host a conference call and webcast to discuss the third-quarter 2024 financial results.
Key Dates
- July 2024: Lineage completed its IPO, raising $5.1 billion in gross proceeds.
- July 31, 2024: Lineage closed the acquisition of Luik Natie for $66 million.
- September 30, 2024: End of the third quarter for which financial results are reported.
- November 1, 2024: Lineage acquired ColdPoint Logistics for $223 million.
- November 6, 2024: Date of the earnings release and 8-K filing.
Keywords
cold storage, warehouse, REIT, IPO, AFFO, EBITDA, acquisition, logistics, real estate, dividend, automation
LINE
Lineage, INC
NASDAQ
Sector: Real Estate
Filings with Classifications
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.
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
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.
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.
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.
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
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.