Q1 2024 Mobile Infrastructure Corp Earninga Call
Operator: Good day, and welcome to the Mobile Infrastructure Corporation First Quarter 2024 Financial Results Conference Call. All participants will be in a listen-only mode.
Good day and welcome to the mobile infrastructure Corporation first quarter 2024 financial results Conference call.
All participants will be in a listen only mode.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to KC Coterie, Investor Relations Representative. Please go ahead.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on a touchtone phone.
To withdraw your question. Please press Star then two.
Please note this event is being recorded.
Casey Coterie: I would now like to turn the conference over to Casey Coterie Investor Relations Representative. Please go ahead.
Casey Kotary: Thank you, Operator. Good afternoon, everyone, and thank you for joining us to review Mobile's first quarter 2024 performance. With us today from mobile are Manuel Chavez, CEO, and Stephanie Hogue, President and CFO. During this conference call, we will make forward-looking statements to assist you in understanding mobile management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially, and I refer you to our May 15, 2024 press release and our SEC filings for discussions of those risks.
Casey Coterie: Thank you operator, good afternoon, everyone and thank you for joining us to review Mobile's first quarter 2020 for performance.
Casey Coterie: With us today from mobile are manual Chavez C O and Stephanie Hogan President and CFO.
During this conference call, we will make forward looking statements to assist you in understanding mobile management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially.
Casey Coterie: Refer you to our May 15, 2024 press release, and our SEC filings for discussions of those risks.
Casey Kotary: In addition, our statements during this call are based on our views as of today, and we anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today, but specifically disclaim any obligation to do so. I will now turn the call over to Mobile's CEO, Manuel Chavez, to discuss the first quarter 2024 performance.
Casey Coterie: In addition, our statements. During this call are based on our views as of today, we anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward looking statements made today, but specifically disclaim any obligation to do so I will now turn the call over to mobiles CEO.
Daniel Chavez: Daniel Chavez to discuss the first quarter 2024 performance Daniel.
Daniel Chavez: Thank you Casey.
Manuel Chavez: And thank you all for participating in today's call to review our first quarter results and discuss our outlook for 2024. To provide context for newcomers. Mobile Infrastructure is the owner of a diversified portfolio of 42 parking assets, which are split between garages and service lines. Our assets are located in 21 markets with an average MSA population of about 2.9 million people, most of whom drive to their destinations. In 2022, this asset portfolio was valued at $520 million by an independent national financial services firm, and since 2022, our net operating income has increased by approximately 10%.
Daniel Chavez: And thank you all for participating in today's call to review, our fourth quarter results and discuss our outlook for 2024.
Speaker Change: To provide context of newcomers mobile infrastructure as the owner of a diversified portfolio of 42 targeted assets whats your split between garages and circumstance.
Speaker Change: Our assets are located in 21 markets with an average MSA population of about $2 9 million people, most of whom drive to their destinations.
Speaker Change: In 2022, this asset portfolio was valued at $520 million by an independent National financial services firm and fifth 2022, our net operating income has increased by approximately 10%.
Manuel Chavez: Thus, while we are a small cap company, our underlying asset base is substantial. The first quarter is typically our slowest quarter of the year, as there are fewer sporting events, concerts, and other events in our market.
Speaker Change: Well, we are a small cap company, our underlying asset base is substantial.
Speaker Change: The first quarter is typically our slowest quarter of the year as there are fewer sporting events concerts and other events in our markets that said, we are pleased with our results for the period, which demonstrate continued progress in several key areas.
Manuel Chavez: That said, we are pleased with our results for the period, which demonstrate continued progress in several key areas. First, we further improved the performance of our asset portfolio compared to year-ago levels, posting considerable revenue growth and a double-digit increase in net operating income. Second, these results were closely tied to the actions we took early in the quarter to convert 26 of our parking assets from leases to management agreements. First quarter revenue growth was comprised of mid-single-digit organic growth that benefited from our ability to drive increased utilization on the converted contracts.
First we further improve the performance of our asset portfolio compared to year ago levels hosting considerable revenue growth and double digit increase in net operating income.
Speaker Change: Second these results will closely tied to the actions we took early in the quarter to convert 26 of our parking assets from leases and management agreements.
Speaker Change: First quarter revenue growth was comprised of mid single digit organic growth benefited from our ability to drive increased utilization on the <unk>.
Speaker Change: <unk> contracts and the faster growth in net operating income was attributable to our team's focus on actively managing expenses on those contracts.
Manuel Chavez: And lastly, we saw positive momentum across several key end markets in the first quarter that we expect to build throughout the year. Taking a closer look at our first quarter business results, we are pleased to see year-on-year growth, both in contract revenue, which is the revenue we derive from monthly parking tenants, and in commercial revenue, which comes from our parking garages that are attached to retail destinations. Transient volume, while always light in the first quarter due to the absence of events, was particularly sluggish this year, but it picked up progressively throughout the period.
Speaker Change: And lastly, we saw positive momentum across several key end markets in the first quarter that we expect to build throughout the year.
Speaker Change: Taking a closer look at our first quarter business results. We are pleased to see year on year growth. Both in contract revenue, which is the revenue we derived from monthly parking tenants and in commercial revenue, which comes from our parking garage has better attached to retail destination transient volume will always light in the first quarter due.
Speaker Change: The absence of events, what's particularly sluggish this year, but it picked up progressively throughout the period also our average transient parking rates increase which mitigated the softness in this category.
Manuel Chavez: Also, our average transient parking rates increased, which mitigated the softness in this category. With respect to in-markets, we continue to see strength in hotel parking as well as growth in monthly parking for medical and social service facilities, municipal offices, and residential locations. Geographically, the Midwest remained our strongest market. Our technology infrastructure is a key differentiator in the marketplace, providing us with unique insights into parking trends at our locations and giving us the ability to customize offers.
Speaker Change: Yeah.
Speaker Change: With respect to end markets, we continued to see strength in hotel parking as well as growth in monthly parking for medical and social service facilities municipal offices and residential locations and geographically the Midwest remained our strongest market.
Speaker Change: Our technology infrastructure is a key differentiator in the marketplace, providing us with unique insights into parking trends at our locations and giving us the ability to customize offerings.
Manuel Chavez: In the first quarter, we continued to build out our systems to track revenue data on a real-time basis, which will enable us to implement sophisticated pricing models and other utilization tools across our asset portfolio. As we discussed on our fourth-quarter 2023 conference call, 2024 will be a year we plan to accelerate operational improvements as we work to strengthen the performance of our existing asset base. Our first quarter results represented a good step in that direction.
Speaker Change: In the first quarter, we continued to build out our systems to track revenue data on a real time basis, which will enable us to implement sophisticated pricing model and other utilization tools across our asset portfolio.
Speaker Change: As we discussed on our fourth quarter 2023 conference call 2024 will be a year, we plan to accelerate operational improvements as we work to strengthen the performance of our existing asset base. Our first quarter results represented a good step in that direction.
Manuel Chavez: Additionally, as we have announced, we have named a new CFO who will expand our bench strength at the executive level and relieve Stephanie of this role so she can concentrate on her responsibilities as president. Paul Gore officially joined us on Monday after many years as a Chief Accounting Officer and Vice President of Corporate Finance at Seco Environmental. Paul's public company experience, his impressive track record of accounting excellence and change management, and his reputation as a team player are important attributes that support our ambitious growth plan, and we welcome him as a key member of our leadership team.
Speaker Change: Additionally, as we have announced we have named our new CFO, who will expand our bench strength at the executive level and relief Stephanie of this wall. So she can concentrate on her responsibilities as president.
Speaker Change: Paul Gore officially joined US on Monday after many years as the Chief Accounting Officer, and Vice President of corporate finance at CECO environmental.
Speaker Change: All public company experience as impressive track record of accounting excellent and change management and its reputation as a team player are important attributes that support our ambitious growth plans.
Speaker Change: We welcome him as a key member of our leadership team.
Manuel Chavez: I would like to thank Stephanie for her willingness to remain in the CFO role until we find the right person for this position. And now, I would like to turn the call over to her for financial review.
Speaker Change: I would like to thank Stephanie for her willingness to remain in the CFO until we found the right person for this position.
Speaker Change: And now I would like to turn the call over to her for financial review.
Stephanie L. Hogue: Thank you, Manuel, and good afternoon, everyone. I am pleased to provide additional details on our first quarter 2024 financial performance. First quarter revenue of $8.8 million increased 24% year over year from $7.1 million in the first quarter of 2023. This strong revenue performance was comprised of mid-single-digit organic growth from increased parking activity across our locations and from our conversion of 26 of our assets to management contracts from leases. As a reminder, this shift moved our revenue recognition on the converted assets to a more standardized accrual basis, which more closely aligns with the underlying business performance.
Stephanie: Thank you Danielle and good afternoon, everyone I am pleased to provide additional details on our first quarter 2024 financial performance.
First quarter revenue of $8 8 million increased 24% year over year from $7 $1 million in the first quarter of 2023.
Stephanie: The strong revenue performance was comprised of mid single digit organic growth from increased parking activity across our location.
Stephanie: And from our conversion of 26 of our asset management contracts from leases.
Stephanie: As a reminder, this shifts needs our revenue recognition on the converted asset to a more standardized accrual recognition, which more closely aligns with the underlying business performance.
Stephanie L. Hogue: We are pleased with the organic growth achieved in the first quarter as it demonstrates the benefits of our Active Asset Management strategy. Using our proprietary analytics, we have been able to customize our offerings and drive additional traffic to our location.
Stephanie: We are pleased with the organic growth achieved in the first quarter as it demonstrates the benefits of our active asset management strategy.
Stephanie: Using our proprietary analytics, we've been able to customize our offerings and drive additional traffic to our locations.
Stephanie L. Hogue: Property operating expenses were $1.5 million compared to $0.5 million in last year's first quarter. The increase primarily resulted from the accounting treatment associated with the shift to management contracts. This shift gives us more control over the expenses of the 26 managed assets in our portfolio, which enables us to better align spending in areas such as staffing, repairs, and marketing with projected revenue generation. Property taxes were $1.9 million, up slightly from $1.8 million one year ago. The net impact of our higher revenue and operating expenses resulted in a net operating income, or NOI, of $5.4 million, up 11.9% from last year. NOI represented 61% of first quarter 2024 revenue.
Stephanie: Property operating expenses were $1 5 million compared to <unk> $5 million in last year's first quarter.
The increase primarily resulted from the accounting treatment associated with the shift to management contracts.
This shift gives us more control over the expenses at the 26th managed assets in our portfolio, which enables us to better align spending in areas such as staffing repairs and marketing with projected revenue generation.
Stephanie: Taxes were $1 $9 million up slightly from $1 8 million one year ago.
Stephanie: The net impact of our higher revenue and operating expenses resulted in net operating income or NOI of $5 $4 million.
Stephanie: 11, 9% from last year.
Stephanie: Oh I represented 61% of first quarter 2020 for revenue.
Stephanie L. Hogue: General and administrative expenses were $3.0 million, which is $0.4 million ahead of the similar period last year, reflecting public company costs, technology expenses, and non-cash compensation of $1.8 million. On a cash basis, G&A was $1.2 million, and our platform is well-positioned to scale. We expect to carefully manage G&A and believe parking revenue can grow meaningfully with very little incremental corporate OPEX as our business ramps up. As a result, we would expect to show significant operating leverage over time via contribution margin as we drive incremental revenue.
Stephanie: General and administrative expenses were 3.0 million.
Stephanie: Which is zero point $4 million ahead of the similar period last year, reflecting public company costs technology expense and non cash compensation of $1 $8 million.
Stephanie: On a cash basis, G&A was $1.2 million and our platform is well positioned to scale, we expect to carefully manage G&A and believe parking revenue can grow meaningfully with very little incremental corporate opex as our business ramps.
Stephanie: As a result, we would expect to show significant operating leverage over time via contribution margin as we drive incremental revenue.
Stephanie L. Hogue: Adjusted EBITDA was $3.5 million, up 3.6% from $3.4 million last year, and the adjusted EBITDA margin was 40%. In the first few months of this year, we converted 26 locations to management contracts, and we have ongoing discussions to convert several others in the near term, with the remaining locations requiring lease rollovers, which will take place in 2026 and 2027. We remain focused on building our base of managed locations. Turning to our balance sheet, at the end of the first quarter, Mobile Infrastructure had $13.9 million in cash and restricted cash. Total debt outstanding was $192 million, similar to $193 million at the end of 2023.
Stephanie: Adjusted EBITDA was $3 $5 million up three 6% from $3 $4 million last year and adjusted EBITDA margin was 40%.
Stephanie: And the first few months of this year, we converted 26 locations to management contracts and we have ongoing discussions to convert several others in the near term with the remaining locations requiring lease rollovers, which will take place in 2026 and 2027, we remain focused on building our base of managed to locate.
Stephanie: <unk>.
Stephanie: Turning to our balance sheet at the end of the first quarter mobile infrastructure has $13 $9 million of cash and restricted cash total debt outstanding was $192 million similar to the $193 million at the end of 2023.
Stephanie L. Hogue: Earlier this year, we successfully completed an extension of our revolving credit facility, which had an outstanding balance of $59 million at quarter end, providing extension options through June 2025, and we are actively working with our lenders to refinance our upcoming debt maturity. Our first quarter results were on plan and support the 2024 guidance we provided when we released our full year 2023 results. For full year 2024, we are reaffirming our prior guidance and continuing to expect revenue of $38 million to $40 million, reflecting mid-single-digit organic growth and the benefit of the shift from leases to management contracts.
Stephanie: Earlier this year, we successfully completed an extension of our revolving credit facility, which had an outstanding balance of $59 million at quarter end, providing extension options through June 2025, and are actively working with our lenders to refinance our upcoming debt maturities.
Our first quarter results were on plan and support the 'twenty 'twenty four guidance, we provided when we released our full year 2023 result.
Stephanie: For full year 2024, we are reaffirming our prior guidance and continue to expect revenue of $38 million to $40 million, reflecting mid single digit organic growth and the benefit of the shift from leases to management contracts.
Stephanie L. Hogue: As a reminder, net operating income is our operational North Star. We expect NOI of $22.5 million to $23.25 million, indicating growth from 2023 of 8.3% at the midpoint. As Manuel mentioned, we have an active pipeline of potential acquisitions, and our tax-advantaged ability to buy these assets for stock, where any gain will be deferred to the owners, offers liquidity for family-owned operations. We offer strong management capability, the benefit of scale, and technology services, which together have the proven ability to immediately improve NOI on many of these apps.
Stephanie: As a reminder, net operating income is our operational Northstar we.
Stephanie: We expect NOI of 22, and a half million dollars to $23 million to $5 million, indicating growth from 'twenty to 'twenty three of eight 3% at the midpoint.
Manuel: As Manuel mentioned, we have an active pipeline of potential acquisition and our tax advantaged ability to buy these assets for stock where any gain will be deferred to the owners offers liquidity for family owned operation.
Manuel: We offer strong management capability, the benefit of scale and technology services, which together have the proven ability to immediately improve NOI on many of these assets.
Stephanie L. Hogue: As I noted in our last call, our ability to use our stock as currency for acquisitions is dependent on achieving a more reasonable equity valuation. With that, I will turn the call back to Manuel for his closing remarks.
Daniel Chavez: As I noted on our last call our ability to use our stock as currency for acquisition is dependent on achieving a more reasonable equity valuation with that I will turn the call back to Daniel for closing remarks.
Daniel Chavez: Thank you Stephanie.
Manuel Chavez: To sum up, we are pleased that our first-quarter results put us on track to achieve the guidance we provided for the full year 2024 and that early indications for the second quarter point to the continued strengthening of our business. The growth we anticipate for 2024 does not include an immaterial benefit from return-to-office mandates in our market.
Daniel Chavez: To sum up we are pleased with our first quarter results put us on track to achieve the guidance we provided for the full year 2024.
Daniel Chavez: And that early indications for the second quarter of a point to the continued strengthening of our business. The growth. We anticipate for 2024 does not include any material benefit from returned to office mandates in our markets.
Manuel Chavez: Improving these metrics would be a growth tailwind for us. Looking ahead, our long-term vision is to become the acquirer of choice in the parking industry. Our experience, relationships, and technology infrastructure have attracted substantial interest in what is a fragmented and traditionally single-asset owner industry. That said, while we have a sizable pipeline of potential acquisitions, we intend to carefully navigate an unfavorable interest rate environment and will continue to work hard to create shareholder value. We believe that our stock price is materially undervalued relative to its inherent asset. Operator, I now would like to open the call for questions. We will now begin the question and answer session.
Improvements in these metrics would be a growth tailwind for us.
Daniel Chavez: Looking ahead, our long term vision is to become the acquirer of choice in the parking industry.
Daniel Chavez: Our experience relationships and technology infrastructure have attracted substantial interest in what is a fragmented and traditionally single asset owner industry.
Daniel Chavez: That said, while we have a sizable pipeline of potential acquisitions, we intend to carefully navigate an unfavorable interest rate environment and will continue to work hard to create shareholder value. We believe that our stock price is materially undervalued relative to its inherent asset value.
Operator: To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Bryan Maher with B Riley Securities.
Daniel Chavez: Operator.
Speaker Change: Like to open the call for questions.
We will now begin the question and answer session.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing mckeith.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Yeah.
Speaker Change: The first question today comes from Brian <unk> with B Riley Securities. Please go ahead.
Brian: Thank you and good afternoon.
Bryan Anthony Maher: Thank you and good afternoon. Just a few for me today. Stephanie, you touched upon the acquisition pipeline in your prepared comments, but I don't think you gave us a number there. I forget if you volunteered it last.
Brian: Just a few from me today.
Speaker Change: Stephanie you touched upon the acquisition pipeline in your prepared comments, but I don't think you gave us a number there I forget if you volunteered at last quarter. If we pulled it out of you, but I think you might have mentioned that you were kind of looking at like $300 billion in assets can you give us an update there and let US know if you are.
Speaker Change: Close to doing anything or just does it solely rely on your stock price moving up so that you don't have to tap into cash.
Stephanie L. Hogue: Yeah, no, great question, Bryan, and thanks for asking it. No, we're really watching the stock price. You know, Manuel said it in his comments, we believe that it's largely undervalued. And so today, using using stock to acquire really isn't. Accretive. You know, I think if we saw something substantially accretive or a very high cap rate, we would look to cash to do that. But we're not seeing something that's that far in the money that it makes sense to execute today.
Brian: Yeah, No great question, Brian and thanks for asking it.
Speaker Change: No, we're really watching the stock price I mean.
Speaker Change: <unk> said it in his comments, we believe that it's largely undervalued and so today using using stock to acquire really is not.
Speaker Change: Freedom I'm, you know I think if we saw something substantially accretive or very high cap rate. We would look to we would look to cash to do that but we're not seeing something that's that far in the money that it makes sense to execute today.
Bryan Anthony Maher: Would you say that the pipeline of opportunities that you are looking at is still somewhere in that couple to few hundred million dollar area?
Speaker Change: Would you say that the pipeline of opportunities that you are looking at is still somewhere in that coupled a few hundred million dollar area.
Stephanie L. Hogue: Oh yeah, absolutely. It's closer to 300 still.
Speaker Change: Yeah, absolutely it's closer to 300 yourself.
Bryan Anthony Maher: Okay, and Manuel, you talked a little bit about seasonality in your prepared comments, with the first quarter being the slowest. Could you or Stephanie give us an idea of how to think about the modeling of the seasonality of the business, you know, and lodging? 4Q, 1Q are the weakest, and 3Q, and 2Q are the strongest. What is it in your world?
Matt: Okay, and I think Matt you talked a little bit about the seasonality in your prepared comments with the first quarter being the slowest.
Speaker Change: Could you or Stephanie give us an idea of how to think about the modeling of the seasonality of the business you know in lodging <unk> the weakest in <unk> and <unk> the strongest what is it in your world.
Stephanie L. Hogue: Sure, so the first quarter is always the weakest. You know, I'd say it's generally 21% to 23% of the full year over the last, certainly in this portfolio over the last three years. Um, you know, we see a ramp in the second half of the second quarter, the third quarter is always very strong, and then the first half of the fourth quarter is strong. So if you, if you look at kind of all of those quarters together, the third quarter is always the strongest, and you've got kind of second and fourth, the back half and the front half that are equally strong, and first being the slowest.
Speaker Change: Sure. So first quarter is always always the weakest.
Speaker Change: I'd say, its generally 21% to 23% of the full year over the last.
Speaker Change: And this portfolio over the last three years.
Speaker Change:
Speaker Change: We see a ramp in the second half of the second quarter third quarter is always very strong and then the first half of the fourth quarter as strong. So if you. If you look at kind of all of this quarters together third quarter is always the strongest.
Speaker Change: And you've got kind of second and fourth the back half than the front half that are equally strong and first being the slowest.
Bryan Anthony Maher: Okay, and then last for me, when you talk about the conversion of the, you know, the 26 contracts to the management contract, can you maybe walk us through the mechanics of one of those? I mean, are the same actual people who worked there before are going to work there after it's now a management contract but not a lease, or are new people, and if they're new people... how do you get them, and why not just hire your own people?
Speaker Change: Okay, and then last for me when you talk about the conversion of the yeah. The 26 contracts to management contracts can you maybe walk us through the mechanics of one of those I mean is it the same actual people who are working there before are going to work thereafter.
Speaker Change: It's now a management contract, but not on the lease or is it new people and if it's new people, how do you get them and why not just hire your own people.
Stephanie L. Hogue: All great questions, Bryan. I'll start with the first part, which is that it is the same people. So there's not a day-to-day difference. If you were going into the parking garage, you would not notice a difference at all. Same people, same process; it largely is just the way the revenue is reflected and expenses are paid. So, you know, by and large, we will change operators, aka people, when the asset is not performing well or if we find that an operator is not paying attention to an asset. You know, so R&M isn't being capped up, et cetera, but, you know, by and large, the experience is the same if you're a consumer.
Brian: All great questions Brian.
Brian: Start with the first part which is it is the same people. So there's not a there's not a day to day difference. If you were going into the parking garage you would not notice a difference at all same people same process.
Brian: It largely is just the way the revenue is reflected in expenses are paid so by and large we will change operators.
Brian: People when the asset is not performing well or if we find that and operators not paying attention to an asset.
Brian: So.
Brian: <unk> M isn't being capped up et cetera, but by and large the experience is the same as your consumer.
Bryan Anthony Maher: Okay, and maybe lastly, are you seeing any change in property tax trends, and how successful are you in appealing those when you do pursue appeals?
Speaker Change: Okay, and just maybe lastly are you seeing any change in property tax trends and how successful are you in appealing those when you do pursue appeals.
Stephanie L. Hogue: Yeah, we saw a slight uptick in there, but it really depends market to market. Our success right now is... It's decent. It's good. You know, we tend to appeal if we feel like the increase is sort of outpacing our NOI growth. I would say over the past couple of years, taxing authorities and auditors have not been that aggressive in CBD cores just based on kind of the overall mood reflecting a lack of return to work, etc.
Yes, we saw we saw a slight slight uptick in there you know it really depends.
Speaker Change: Market to market.
Speaker Change: Our success right now.
Speaker Change:
Dave: It's deeper it's Dave.
And you know we we.
Dave: Tend to appeal if were.
Dave: If we feel like the.
The increase or sort of outpacing outpacing our NOI growth.
Dave: I would say over the past couple of years calculate authorities auditors.
Dave: Having not been that aggressive.
Dave: And CBD quarters, just based on kind of the overall mood, reflecting locker returned to work et cetera.
Bryan Anthony Maher: Okay, thank you. That's all for me. Great, thank you.
Speaker Change: Okay. Thank you that's all for me.
Speaker Change: Great. Thank you.
Operator: As a reminder, if you would like to ask a question, please press star then 1 to enter the question queue. The next question comes from Mark Riddick with Sidoti and Company. Please go ahead.
Speaker Change: As a reminder, if you would like to ask a question. Please press Star then one to enter the question queue.
Speaker Change: The next question comes from Marc Riddick with Sidoti <unk> Company. Please go ahead.
Marc Riddick: Hi, good afternoon.
Marc Riddick: Hi, Mark how are you good.
Marc Frye Riddick: Good, good. I was wondering if maybe we could sort of continue on that thread a bit. I know in your prepared remarks you mentioned that return to office improvement is not necessarily part of what your guide is encouraging. Maybe you could talk a little bit about maybe what you're seeing in some of your markets, if you're seeing some markets perform a little better than others and whether that was any attribution into our first quarter organics.
Marc Riddick: Oh, good Oh I was wondering if maybe you could sort of continue on that thread a bit.
Marc Riddick: No in your prepared remarks, you mentioned the return to office improvement is not necessarily part of what your guide as it brings US maybe you could talk a little bit about maybe what you're seeing in some of your markets. If you're seeing some markets perform a little better than others and whether that was any contribution in two first quarter organic growth.
Stephanie L. Hogue: Yeah, yeah, no, that's good. That's a good question and something we spend a lot of time on. We have seen an increase in our monthly contract part, which has been good because it's been something we've been focused on. But if you dive into that, it is not correlated, or it is not because of corporate monthly parking. These are monthly contracts that are primarily for the medical and hotel industries, and then residential.
Marc Frye Riddick: Yeah, yeah. I know.
Speaker Change: Yeah, Yeah, no. That's good that's a good question and something we spend a lot of time on.
Speaker Change: We have seen an increase in our monthly contract parking.
Speaker Change: Which has been good because it's been something we've been focused on.
But if you dive into that it is not correlated or not because of corporate monthly parking. These are monthly contracts.
Speaker Change: Better primarily.
Speaker Change: Representing the medical and hotel industries, and then residential.
Marc Frye Riddick: Okay, great. And then I wanted to sort of shift gears as to some of the conversations around future growth plans and the acquisition pipeline there. Are you seeing any particular pockets that are coming to the table or maybe a little more attractive than others, whether that be a geographic fit or property type, as far as the pipeline is concerned? And has that changed any, maybe in the last six months or so?
Speaker Change: Okay, Great and then I wanted to shift gears to some of the conversations around.
Speaker Change: Our future growth plans in the acquisition pipeline there.
Speaker Change: Are you are you seeing any particular pockets that are are coming to the table or maybe a little more attractive than others, whether that be a geographic fit or or or property type or as far as.
Speaker Change: The pipeline and has that changed maybe in the last six months or so.
Stephanie L. Hogue: Yeah, I mean, it's not going to come as a surprise to you. Parking assets that are attached to office towers and that are reliant on that office tower as their sort of sole demand driver, we're starting to see those come to market. You know, but with those comes the risk. You know, we are really focused on having multiple demand drivers on adjacent blocks. You know, and that's what gives us the opportunity to pull different levers.
Speaker Change: Yes.
Speaker Change: It's not going to comment the surprise to you.
Speaker Change: Parking assets that are attached to office towers.
Speaker Change: And that are relying on that office tower there.
Speaker Change: Sort of sole demand driver.
Speaker Change: We're starting to be we're starting to see those come to market.
Speaker Change: But with those with those come comes the risk.
Speaker Change:
Speaker Change: We are really focused on having multiple demand drivers on adjacent blocks.
Speaker Change: And it's what gives us the opportunity to pull different levers.
Stephanie L. Hogue: So, despite the fact that return to office hasn't materialized, we can still focus on validation programs, hotels, residential, medical office, clinics, etc. So the real opportunity then for us is sort of looking at some of those garages that aren't attached to these sort of vacant office towers and, you know, maybe the office tower is being redeveloped into a hotel, or residential, et cetera, and those are the ones that we're kind of following there. The ones where we foresee sort of a continued reliance on return to office, those are much less interesting to us
Speaker Change: So despite the fact that returned to office hasn't materialized, we can still focus on validation programs hotels residential.
Speaker Change: Medical office clinics et cetera.
Speaker Change:
Speaker Change: But.
Speaker Change: So the real opportunity then.
Speaker Change: For us, it's sort of looking at some of those.
Speaker Change: Garages.
Speaker Change: Attached to these sort of vacant office towers.
Speaker Change: Maybe the office tower is being redeveloped into the hotel residential et cetera. Those are the ones that were kind of following there.
Speaker Change: The ones where.
Speaker Change: We foresee sort of a continued reliance on return to office. Those are those are much less interesting to us.
Speaker Change: Gotcha.
Marc Frye Riddick: And then I guess the last one for me, can you sort of maybe bring us up to date as to maybe what you're seeing as to the pricing environment and maybe what you have baked in to your forecast and how pricing plays into that?
Speaker Change: And then I guess the last one from me can you maybe bring us up to date as to maybe what you're seeing to the the pricing environment.
Speaker Change: And maybe what you have baked in.
Speaker Change: In your in your forecast and how pricing plays into that.
Stephanie L. Hogue: Oh yeah, that's a good question. For us, we use pricing to facilitate the trial, right? Because parking is very habitual, it's a very sticky business. You're a parking consumer, not only likes to park in the same parking facility, but oftentimes, they prefer to park in the same parking space. So once we get them in and we show them that we're clean, safe, and secure and that it's convenient for the demand driver that's bringing them downtown, then we can tend to keep their business.
Speaker Change: Yeah, no that's it.
Speaker Change: That's a good question so.
Speaker Change: For us we use pricing to facilitate trial right because parking as various virtual it's very sticky.
Speaker Change: Business, you're you're you're in parking consumer not only likes the park.
Speaker Change: And the same parking facility oftentimes they prefer to park in the same parking space. So once we get them in and we showed them that were clean safe and secure.
Speaker Change: And that is convenient for the demand driver, that's bringing them downtown than we can tend to keep their business and so we will aggressively.
Stephanie L. Hogue: And so we will aggressively mark down prices or discount prices if we see a surge in demand, meaning an opportunity to drive the trial of a potential new customer. Any of our pricing that we change for either daily or monthly was changed on the 1st, so it's baked into our Q1 financials and performance. As the dynamics of demand drivers or events sort of start to materialize throughout the year, we will use pricing up or down to fill empty spaces.
Speaker Change: Markdown price or discount pricing, if we see a surge in demand, meaning an opportunity to to drive trial of the <unk>.
Speaker Change: Potential new customer.
Speaker Change: Any of our pricing that we change for either daily or monthly what's changed on the first so it's baked into our Q1 financials and performance.
Speaker Change: As.
Speaker Change: As the dynamics of demand drivers or event sort of start to materialize throughout the year, we will use pricing up or down.
Speaker Change: To fill fulfill empty spaces.
Marc Frye Riddick: Excellent. Thank you very much.
Speaker Change: Excellent. Thank you very much youre welcome.
Operator: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. I want to thank you all for your time.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks.
Manuel Chavez: I want to thank you all for your time. We're looking forward to the remainder of the year.
Speaker Change: I want to thank you all for your time and we're looking forward to the remainder of the year.
Speaker Change: And as always thank you.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
N/A: ???
Speaker Change: [music].
Speaker Change: Yes.