Q4 2024 Lineage Inc Earnings Call

It will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one.

Speaker Change: I would now like to turn the call over to Evan Barbosa, Vice President of Investor Relations you may begin.

Speaker Change: Thank you.

Speaker Change: Welcome to Wendy just discussion of its fourth quarter and full year 2024 financial results. Joining me today are Greg <unk>, President and Chief Executive Officer, and Rob Crisci lineage as Chief Financial Officer, Our earnings presentation, which includes supplemental financial information can be found on our Investor Relations website at IR Dot one.

Speaker Change: <unk> Dot com.

Speaker Change: Showing management's prepared remarks, we'll be happy to take your questions.

Speaker Change: Turning to slide two before we start I would like to remind everyone that our comments today will include forward looking statements under federal Securities laws.

Speaker Change: These statements are subject to numerous risks and uncertainties as described in our filings with the SEC.

Speaker Change: These risks could cause our actual results to differ materially from those expressed in or implied by our comments.

[music].

Speaker Change: Forward looking statements in the earnings release that we issued today along with the comments on this call are made only as of today and will not be updated as actual events unfold in.

Speaker Change: In addition reference will be made to certain non-GAAP financial measures.

Speaker Change: Information regarding our use of these measures and a reconciliation of non-GAAP to GAAP measures can be found in the press release that was issued this morning.

Speaker Change: Unless otherwise noted reported figures are rounded comparisons of the fourth quarter of 2024 to the fourth quarter of 2023 and comparisons of the full year 2024 to the full year 2023.

Now I would like to turn the call over to Greg.

Greg: Thanks, Kevin and thanks, everyone for joining us today, turning to the 2024 highlights on slide three I'd like to start with a brief recap of our 2024 accomplishments.

Greg: We executed the largest IPO of the year and the largest REIT IPO of all time this enabled us to reduce our leverage to under five times, which earned us investment grade ratings at both Moody's and Fitch and positions us well to continue to deploy capital across our attractive pipeline of development and M&A opportunities.

Greg: Naturally we delivered 4% adjusted EBITDA growth at 6% <unk> per share growth and initiated our dividend annualized rate of $2 11 a share.

Greg: Operationally, we delivered same warehouse physical occupancy of 78%, despite a challenging external environment driven by our high quality assets and the locations most critical to our diversified customer base.

Greg: As we reflect on 2024, we achieved the second year in a row of our all time best safety performance reinforcing our first corporate value of safety record new business wins, helping to offset the industry headwinds.

Greg: Best ever truck turn times for our customers the service metrics they care about the most.

Greg: First warehouse labor productivity in our history and this continued into the first quarter.

Greg: The issuance of our 100th patent demonstrating our unwavering commitment to innovation automation and data science.

Okay.

Thank you for standing by and welcome to the lineage fourth quarter 2024 earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question.

Greg: We received market recognition and awards like the CNBC Disruptor 50 list for the fourth consecutive year.

Greg: The fortune 2020 for change the World list for the second time, Inc. 's 2024, best in business Awards for the innovation and technology category.

Greg: The 2020 for Smartway leader by the U S EPA and recognition for our dedication to sustainability through innovative <unk> solutions.

Evan Barbosa: Again prestige start one thank you I'd now like to turn the call over to Evan Barbosa, Vice President of Investor Relations you may begin.

Greg: Finally, we executed on a robust pipeline of development and M&A opportunities deploying $760 million of growth capital, including the opening of what we believe to be the most state of the art innovative fully automated cold store in the world in Hazleton, Pennsylvania, which opened on time.

Evan Barbosa: Thank you.

Greg Lehmkuhl: Welcome to when he just discussion its fourth quarter and full year 2024 financial results. Joining me today are Greg Lehmkuhl, President and Chief Executive Officer, Rob <unk> <unk>.

Greg: Is operating as expected.

Chief Financial Officer, our earnings presentation, which includes supplemental financial information can be found on our Investor Relations website at IR Dot one dot com.

Greg: The acquisition of Cove point logistics in Kansas City, and several other accretive acquisitions around the globe I would like to see really thank all of our team members across the world for contributing to our success in 2024.

Following managements prepared remarks, well be happy to take your questions.

Greg: Next slide as we move into 2025 fresh and frozen food remains a growing segment driven by strong long term demand. The vast majority of food consumed in developed markets requires temperature controlled warehouses at some point in its journey property Fork at lineage are strategically built network and cutting edge technology gives us a significant.

Evan Barbosa: Turning to slide two before we start I would like to remind everyone that our comments today will include forward looking statements under federal Securities laws.

Evan Barbosa: These statements are subject to numerous risks and uncertainties as described in our filings with the SEC.

These risks could cause our actual results to differ materially from those expressed.

Greg: That is an advantage and positions us as the global leader in the Cold chain operationally, we're seeing continued benefits from our focus on labor productivity lean process excellence and energy management driving efficiency across our business and.

Sorry by our comments.

Forward looking statements in the earnings release that we issued today along with the comments on this call are made only as of today and we will not be updated as actual events unfold.

Evan Barbosa: In addition reference will be made to certain non-GAAP financial measures information regarding our use of these measures and a reconciliation of non-GAAP to GAAP measures can be found in the press release that was issued this morning.

Greg: And speaking of efficiencies are little less initiative is on track and our early pilots are exceeding expectations. As a reminder, <unk> our proprietary warehouse execution system that we've developed and already implemented multiple automated facilities that have begun piloting in our conventional buildings.

Evan Barbosa: Otherwise noted reported figures are rounded comparisons of the fourth quarter of 2020 for the fourth quarter of 2023 and comparisons of the full year 2020 for the full year 2023.

Greg: The software uses patented and proprietary algorithms that a result of many years of development and collaboration between our data science technology and operations team.

Murray: Now I would like to turn the call over to Murray.

Murray: Thanks, Kevin and thanks, everyone for joining us today, turning to the 2024 highlights on slide three I'd like to start with a brief recap of our 2024 accomplishments.

Greg: Our belief is that Linzess will transport warehouse operations, resulting in significantly higher performance for customers, while accelerating efficiency improvements. Our early pilots are both exceeding our efficiency expectations and being positively received by our hourly team members and warehouse leadership. Our teams are genuinely excited about how this technology.

Murray: We executed the largest IPO of the year and the largest REIT IPO of all time.

Murray: It's enabled us to reduce our leverage to under five times, which earned us investment grade ratings at both Moody's and Fitch and positions us well to continue to deploy capital across our attractive pipeline of development and M&A opportunities.

Greg: Can transform our operations in fact, I've been getting requests from general managers asking to be next on the list at the as the enthusiasm around this initiative spreads in.

Murray: Financially, we delivered 4% adjusted EBITDA growth of 6% per share growth.

Greg: In short it is still early but we're more excited than ever about the Nols that we will provide more color moving forward as our pilots continue as we learn more.

Murray: And our dividend annualized rate of $2.11 a share operationally, we delivered the same warehouse physical occupancy of 78%. Despite a challenging external environment driven by our high quality assets and the locations most critical to our diversified customer base.

Greg: Before introducing our 2025 guidance allow me to provide some color on the path traveled over the last few years as part of our long term planning cycle. We recently had our data scientists refresh our analysis of our core holdings of our North American warehousing business to shed light on recent trends now no study is perfect, but our data so.

Murray: As we reflect on 2024, we achieved the second youre going to roll our all time best safety performance reinforcing our first corporate value of safety record new business with helping to offset the industry headwinds.

Greg: Just that first of all food consumption has not changed in fact, our study show that since 2021, our outbound pallet volume remained stable fluctuating less than 1% annually.

Murray: Best ever truck turn times for our customers the service metrics they care about the most.

Murray: First warehouse labor productivity in our history and this continued into the first quarter.

Greg: The volume just shifted between channels for example from foodservice to retail it importantly, due to our diversification has minimal impact on us because we saw a pretty much everything.

Murray: The issuance of our 100th patent demonstrating our unwavering commitment to innovation automation and data science.

Murray: We received market recognition and awards like the CNBC Disruptor 50 list for the fourth consecutive year.

Greg: However, inventory holdings have fluctuated over the past several years, here's a brief timeline of what happened back in 2000 22021, we saw supply chain chaos production shortages port shutdowns in the inventory was bled down 2022 was the year, where customers begin to rebuild inventories quickly leading to overbuild.

Murray: <unk> 2024 change the World list for the second time.

Murray: Inc. 's 2024, best in business awards for the innovation and technology category and the.

Murray: 2020 for Smartway leader by the U S EPA and recognition for our dedication to sustainability through innovative freight solutions.

Greg: <unk>.

Greg: That overbuilding continued into the third quarter of 2023, when the excess inventory began timelines that are unwinding continued through the second quarter of 2024 set another way inventory levels remained elevated for the first half of 2024. Since then we've experienced a more normal seasonal pattern.

Murray: Finally, we executed on a robust pipeline of development and M&A opportunities deploying $760 million of growth capital, including the opening of what we believe to be the most state of the art fully.

Murray: Fully automated cold store in the world in Hazleton, Pennsylvania, which opened on time and is operating as expected.

Greg: Which is what we expect to continue moving forward.

Murray: The acquisition of Cove point logistics at Kansas City, and several other accretive acquisitions around the globe I would like to see really thank all of our team members across the world for contributing to our success in 2024.

Greg: For 2025, we expect full year adjusted EBITDA of $1 35 billion to $1 4 billion at <unk> <unk> per share of $3 40 to $3 62.

Murray: Next slide as we move into 2025 fresh and frozen food remains a growing segment driven by strong long term demand. The vast majority of food consumed in developed markets requires temperature controlled warehouses to get some point in its journey before lineage, our strategically built network and cutting edge technology gives us a significant.

Greg: To reiterate our 2025 guidance assumes normal seasonality from today's historically low inventory levels with no market improvement.

Greg: As always our guidance excludes the impact of unannounced future acquisitions or developments.

Greg: Our solid financial position bolstered by a strong balance sheet available cash and significant debt capacity provides the opportunity to deploy over $1 5 billion in capital in 2025 now.

Murray: Competitive advantage and positions us as the global leader in the Cold chain operationally, we're seeing continued benefits from our focus on labor productivity lean process excellence and energy management driving efficiency across our business.

Greg: Now I'd like to turn the call over to our CFO. Rob appreciate thanks, Greg Good morning, everyone and thanks for your interest in lineage starting on slide five and looking briefly at our financial results for the fourth quarter. Our total revenue was $134 billion flat versus prior year, our adjusted EBITDA increased 10% to 330.

Murray: Speaking of efficiencies our <unk> initiative is on track and our early pilots are exceeding expectations. As a reminder, <unk> is our proprietary warehouse execution system that we've developed and already implemented multiple automated facilities and have begun piloting an architectural buildings.

Speaker Change: <unk> 5 million with adjusted EBITDA margin, increasing 210 basis points to 25% or <unk> for the quarter was up over 145% to $213 million and <unk> <unk> per share was 83 eight.

Murray: The software uses patented and proprietary algorithms that a result of many years of development and collaboration between our data science technology and operations team.

Murray: Our belief is that Linzess will transport warehouse operations, resulting in significantly higher performance for customers, while accelerating efficiency improvements. Our early pilots are both exceeding our efficiency expectations and being positively received by our hourly team members and warehouse leadership. Our teams are genuinely excited about how this technology.

Speaker Change: A 73% increase versus prior year, we did benefit from a onetime tax item in the quarter of approximately $13 million or <unk>.

Speaker Change: Our <unk> results also in the quarter, we deployed $329 million of growth capital, including the closing of our previously announced acquisition of Cole point logistics.

Murray: Can transform our operations in fact, I've been getting requests from general managers asking to be next on the list.

Speaker Change: The integration is off to a great start and we are proud to have the <unk> team as part of the lineage family.

Speaker Change: Turning to our full year 2024 results on slide six.

Murray: Enthusiasm around this initiative spreads in.

Murray: In short it is still early but we're more excited than ever about the Nols that we will provide more color and moving forward as our pilots continue and we learn more.

Speaker Change: Total revenue for full year 2024, it was 534 billion, our adjusted EBITDA increased 4% importantly, our two year adjusted EBITA CAGR is a strong 11% despite market headwinds a testament to our ability to perform well in all market environments.

Murray: Before introducing our 2025 guidance allow me to provide some color on the path traveled over the last few years as part of our long term planning cycle. We recently had our data scientists refresh our analysis of our core holdings of our North American warehousing business to shed light on recent trends now no study is perfect, but our data set.

Speaker Change: Adjusted EBITDA margin increased 100 basis points to 24, 9% in 2024 and is up 310 basis points over the past two years <unk> was up 25% to $705 million and <unk> per share was $3 29, a six 5% increase versus prior year.

Murray: Just that first of all food consumption has not changed in fact, our study showed that since 2021, our outbound pallet volume remained stable fluctuating less than 1% annually.

Speaker Change: Turning to our global warehousing segment, which represented 87% of our total NOI in 2020 for full year segment revenue grew 1% and total segment NOI increased 2% to one 5 billion delivering warehouse NOI margin of 39, 5% a 40 basis.

Murray: The volume just shifted between channels for example from foodservice to retail it importantly, due to our diversification has minimal impact on us because we still have pretty much everything.

Murray: However, inventory holdings have fluctuated over the past several years, here's a brief timeline of what happened back in 2000 22021, we saw supply chain chaos production shortages port shutdowns in the inventory was flat down 2022 was the year, where customers begin to rebuild inventories quickly leading to over <unk>.

Speaker Change: <unk> increase since 2022, we've grown our total warehouse NOI margins 390 basis points, driven by strong labor productivity improvements and continued operational execution.

Murray: Building.

Speaker Change: We operate highly efficient warehouses, thanks to our committed team members lean processes and innovative technology. We believe we are on a long term journey to reduce our cost structure in particular, our labor and energy expense through operational excellence and the continued deployment of our proprietary.

Murray: That overbuilding continued into the third quarter of 2023, when the excess inventory begin to unwind that are unwinding continued through the second quarter of 2024 set another way inventory levels remained elevated for the first half of 2024. Since then we've experienced a more normal seasonal pattern.

Speaker Change: <unk>, we believe we are only getting started.

Murray: Which is what we expect to continue moving forward.

Speaker Change: Looking forward to 2025, we expect full year segment NOI growth of 4% to 6% on a constant currency basis, and 3% to 5% on an as reported basis.

Murray: For 2025, we expect full year adjusted EBITDA of 135 billion to $1 4 billion and <unk> per share of $3 40 to $3 60.

Speaker Change: We see same warehouse NOI growth of 2% to 5% on a constant currency basis, and 1% to 4% as reported as Greg outlined we believe our market has stabilized after two years of unusual volatility driven by inventory rebalancing inventory levels remained elevated in the first half of 2024 and.

Murray: To reiterate our 2025 guidance assumes normal seasonality from today's historically low inventory levels with no market improvement.

Murray: As always our guidance excludes the impact of unannounced future acquisitions or developments.

Murray: Our solid financial position bolstered by a strong balance sheet available cash and significant debt capacity provides the opportunity to deploy over $1 5 billion in capital in 2025 now.

Speaker Change: Later in the year, our guidance assumes normal seasonality for 2025, but no market improvement, we are well positioned for strong operating leverage on any incremental growth in summary, we expect to drive continued growth and margin expansion in 2025, all before any benefit from our <unk> project.

Bryan: Now I'd like to turn the call over to our CFO Bryan appreciate thanks, Greg Good morning, everyone and thanks for your interest in lineage starting on slide five and looking briefly at our financial results for the fourth quarter. Our total revenue was 134 billion flat versus prior year, our adjusted EBITDA increased 10% to 300.

Speaker Change: Meaningful margin improvement or incremental capital deployment.

Speaker Change: Shifting to slide eight and covering our global integrated solutions segment, we saw a slight decrease in total segment revenue, which came in at one 5 billion down 2% versus prior year.

Bryan: $35 million with adjusted EBITDA margin, increasing 210 basis points to 25% or <unk> for the quarter was up over 145% to $213 million and <unk> per share was <unk> 83.

Speaker Change: <unk> was down 5% and NOI margin decreased 50 basis points to 15, 9%.

Speaker Change: A 73% increase versus prior year, we did benefit from a onetime tax item in the quarter of approximately $13 million of our five cents.

Speaker Change: As a reminder, our global integrated solutions segment offers value added solutions to our customers, which increase the stickiness and supports our warehouses.

Bryan: Our <unk> results also in the quarter, we deployed $329 million of growth capital, including the closing of our previously announced acquisition of Cole point logistics. The integration is off to a great start and we are proud to have the calpine team as part of the lineage family.

Speaker Change: While we saw declines in 2024, driven by global transportation trends and specific weakness in some European markets. We are well positioned for a rebound in 2025. This is aided by new business wins as we benefit from our customers taking advantage of our unique network and full suite of services, allowing us to partner with our customer.

Bryan: Turning to our full year 2024 results on slide six.

Bryan: Total revenue for full year 2024, it was 534 billion, our adjusted EBITDA increased 4% importantly, our two year adjusted EBITA CAGR is a strong 11% despite market headwinds a testament to our ability to perform well in all market environments.

Speaker Change: To optimize their supply chain for.

Speaker Change: For 2025, we expect full year segment NOI growth of 5% to 10%.

Speaker Change: Turning to slide nine we ended the year with net debt of $6 5 billion total liquidity at the end of the year stood at $1 8 billion, including cash and revolving credit facility capacity, our leverage ratio defined as net debt to adjusted EBITDA was four nine times at the end of the year, our strong balance sheet avail.

Murray: Adjusted EBITDA margin increased 100 basis points to 24, 9% in 2024 and is up 310 basis points over the past two years <unk> was up 25% to $705 million and <unk> per share was $3 29, a six 5% increase versus prior year.

Speaker Change: <unk> cash and debt capacity provides the opportunity to deploy more than $1 5 billion of growth capital. In 2025, we are excited to entertain to enter the new year with a reloaded balance sheet and large pipeline of attractive acquisition and development opportunities that will allow us to continue to build on our position as the <unk>.

Murray: Turning to our global warehousing segment, which represented 87% of our total NOI in 2020 for full year segment revenue grew 1% and total segment NOI increased 2% to $1 5 billion delivering warehouse NOI margin of 39, 5% a 40 base.

Speaker Change: Global industry leader.

Speaker Change: Turning to our 2025 guidance, which Greg already previewed we expect full year adjusted EBITDA of 135 billion to $1 4 billion in <unk> per share of $3 45 to $3 60.

Murray: At this point increase since 2022 we've grown our total warehouse NOI margin 390 basis points, driven by strong labor productivity improvements and continued operational execution. We are highly efficient warehouses. Thanks to our committed team members lean processes and innovative technology.

Speaker Change: As a reminder, this guidance excludes the impact of unannounced future acquisitions or developments. We have also included some additional modeling support on this page.

Speaker Change: We're very excited to deliver a strong year for our shareholders with that I'll turn it back over to Greg.

Murray: We believe we are on a long term journey to reduce our cost structure in particular, our labor and energy expense.

Greg: Thanks, Rob I'll conclude on slide 11 recap this transformational year on a strong note proving once again that our business is built to perform in any environment.

Murray: Operational excellence and the continued deployment of our proprietary technologies. We believe we are only getting started.

Greg: Our focus on execution cost efficiencies at spark capital deployment has forged a solid path of growth for many years and we're excited about the opportunities ahead.

Murray: Looking forward to 2025, we expect full year segment NOI growth of 4% to 6% on a constant currency basis, and 3% to 5% on an as reported basis.

Greg: Looking forward, we're confident in the long term demand drivers of the global food supply chain and our ability to lead the industry with our unmatched platform cutting edge technology broad customer reach and over $100 million of incremental future NOI growth from previously completed or in process development projects that have yet to be that have yet to stabilize.

Murray: We see same warehouse NOI growth of 2% to 5% on a constant currency basis, and 1% to 4% as reported as Greg outlined we believe our market has stabilized after two years of unusual volatility driven by inventory rebalancing inventory levels remained elevated in the first half of 2024 and stable.

Greg: We're in a great position for compounding growth and long term shareholder value creation.

Speaker Change: Our balance sheet remains strong, giving us the flexibility to invest in our robust pipeline of strategic opportunities like Rob said, we're just getting started with that let's open it up for questions operator.

Murray: Later in the year, our guidance assumes normal seasonality for 2025, but no market improvement, we are well positioned for strong operating leverage on any incremental growth in summary, we expect to drive continued growth and margin expansion in 2025, all before any benefit from our <unk> project.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad you raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again, we ask that you. Please limit yourself to one question only.

Murray: <unk> meaningful margin improvement or incremental capital deployment.

Murray: Shifting to slide eight and covering our global integrated solutions segment, we saw a slight decrease in total segment revenue, which came in at one 5 billion down 2% versus prior year.

Speaker Change: First question comes from the lineup Alexander Goldfarb from Piper Sandler Your line is open.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Morning morning out there.

Speaker Change: So a question on just the industry overall, you guys talked about inventory levels normalizing after the post Covid Recalibration you talked about also being at low levels at the same time, there's tariff talk theres still inflationary pressure.

Murray: <unk> was down 5% at NOI margin decreased 50 basis points to 15, 9% as a reminder, our global integrated solutions segment offers value added solutions to our customers, which increase the stickiness and supports our warehousing business while.

Murray: While we saw declines in 2024, driven by global transportation trends and specific weakness in some European markets. We are well positioned for a rebound in 2025. This is aided by new business wins as we benefit from our customers taking advantage of our unique network and full suite of services.

Speaker Change: Re prices restaurant prices so what.

Speaker Change: Gives you confidence that the food market, but the cold storage market truly has settled out.

Speaker Change: And it sounds like there's some optimism in your in your tone that things could improve.

Speaker Change: Anecdotes that gives you that confidence versus nervousness that the consumer is still under pressure, whether it's eating out or eating at home.

Murray: I would have to partner with our customers to optimize their supply chains for 2025, we expect full year segment NOI growth of 5% to 10%.

Alex: Good morning, Alex So as we talked about in our prepared remarks, even through the significant volatility in inventory levels. We've seen for the last few years, our throughput in our core holdings really didn't change very much less than 1%.

Murray: Turning to slide nine we ended the year with net debt of $6 5 billion total liquidity at the end of the year stood at $1 8 billion, including cash and revolving credit facility capacity, our leverage ratio defined as net debt to adjusted EBITDA was four nine times at the end of the year, our strong balance sheet avail.

Alex: So inventory fluctuated quite a bit as I outlined and settled our core holdings in the third quarter of last year.

Murray: <unk> cash and debt capacity provides the opportunity to deploy more than $1 5 billion of growth capital. In 2025, we are excited to enerson to enter the new year with a reloaded balance sheet, a large pipeline of attractive acquisition and development opportunities that will allow us to continue to build on our position as the.

Alex: And we saw normal seasonal patterns.

Alex: And so if we look at the current inventory levels.

Alex: They are low versus kind of pre COVID-19.

Alex: History, and we're not we're not being optimistic we're assuming that things just resume a seasonal pattern person from these historically low levels I think the upside here is.

Murray: Global industry leader.

Speaker Change: Turning to our 2025 guidance, which Greg already previewed we expect full year adjusted EBITDA of $1 35 billion to $1 4 billion in <unk> per share of $3 40 to $3 60.

Alex: That's not in our guidance is that what we're hearing from customers is they are acutely focused on increasing sales they are doing promotional activity.

Alex: All kinds of things that discounting in order to get volumes, moving and that would be all upside versus our guidance as our incremental margins are are great and we have strong operating leverage and so we're not being optimistic in our guidance, we're assuming the market stays the way it is today.

Murray: As a reminder, this guidance excludes the impact of unannounced future acquisitions or developments. We have also included some additional modeling support on this page.

Murray: We're very excited to deliver a strong year for our shareholders with that I'll turn it back over to Greg.

Murray: Rob I'll conclude on slide 11 recap this transformational year on a strong note proving once again that our business is built to perform at any environment. Our focus on execution cost efficiencies at spark capital deployed it has forged a solid path of growth for many years and we're excited about the opportunities ahead.

Moderator: Our next question comes from the line of Keybanc Kim from Truest. Your line is open.

Thanks, I appreciate your commentary and the color you provided on guidance, but.

Moderator: I was just wondering if you can provide some more details.

Moderator: Yeah.

Moderator: For example in occupancy.

Murray: Looking forward, we're confident in the long term demand drivers of the global food supply chain and our ability to lead the industry with our unmatched platform cutting edge technology broad customer reach and over $100 million of incremental future NOI growth from previously completed or in process development projects that have yet to be that have yet to stabilize.

Moderator: It sounds like that could still mean negative occupancy next year as the first half of this year might be a little bit challenging I'm not sure. If that's correct, but if you can provide some details on that and maybe pricing. Thank you.

Moderator: Yeah for sure so let me drill down a little bit on seasonality.

Speaker Change: Greg covered a lot of it's been unusual the last several years getting on sub Greg just talked about though if we drill down just a little bit more. So if you look at our 2024 results by quarter for our new 2020 to 25 same store pool, right, which is in the appendix you actually see that last year that.

Speaker Change: We're in a great position for compounding growth and long term shareholder value creation, our balance sheet remains strong, giving us the flexibility to invest in our robust pipeline of strategic opportunities like Rob said, we're just getting started with that let's open it up for questions operator.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad you raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again, we ask that you. Please limit yourself to one question only.

Speaker Change: NOI almost exactly the day in each of the four quarters like within $5 billion or so thats highly unusual.

Speaker Change: And that.

Speaker Change: And that's the result of what Greg just said, which was last year in the first half we still had elevated inventory levels and then normal seasonality begins in the second half.

Speaker Change: Our first question comes from the lineup Alexander Goldfarb from Piper Sandler Your line is open.

Speaker Change: So that dynamic therefore create challenging comps for us in the first half of this year.

Murray: Okay.

Speaker Change: Good morning, good morning out there.

Speaker Change: Good news is as Greg mentioned it that we feel the industry is stabilized at these lower level and as Greg also that we're not assuming any improvement so.

Murray: So a question on just the industry overall, you guys talked about inventory levels normalizing after the post Covid Recalibration you talked about also being at low levels at the same time, there's tariff talk theres still inflationary pressure.

Speaker Change: Drilling down again normal seasonality. So if we look at pre pandemic data back win when our industry was more normal.

Speaker Change: One generally declines from Q4, then Q2 generally declined a little bit from Q1 Q3 jumps up a fair amount and then Q4 is typically the peak aided by the holiday season that starts to come back down again in Q1.

Murray: Grocery prices restaurant prices. So what gives you confidence that the food market, but the cold storage market truly has settled out and it sounds like theres. Some optimism in your in your tone that things could improve.

Speaker Change: Zero.

Speaker Change: We see this year as a normal year and expect our results to follow that trend. So if you break that out it's sort of first half second half generally in a normal year, you'll get 47% to 48% of your NOI EBITDA in the first half and $52 53 in the second half and Thats, what our guidance assumes.

Murray: What are some anecdotes that gives you that confidence versus nervousness that the consumer is still under pressure, whether it's eating out or eating at home.

Speaker Change: Good morning, Alex So so as we talked about in our prepared remarks, even through the significant volatility inventory levels. We've seen for the last few years, our throughput in our core holdings really didn't change very much less than 1% and so inventory fluctuated quite a bit as I outlined.

Speaker Change: Your next question comes from the line of Ronald Camden from Morgan Stanley. Your line is open.

Ronald Camden: Hey, just a quick two part or just on the same store NOI guidance for the warehouse segment I'd Love, if you could drill in a little bit how much of that is topline versus expense saves just high level, what's driving that and then the second question is just that one $5 billion of.

Murray: And settled our core holdings in the third quarter of last year.

Murray: And we saw normal seasonal patterns.

Murray: So if we look at the current inventory levels theyre low versus kind of.

Murray: Pre COVID-19 history and.

Ronald Camden: Of capital deployment can you talk a little bit more about the pipeline the kind of opportunities that youre looking at.

Murray: We're not we're not being optimistic we're assuming that things just Brazil, the seasonal pattern versus from these historically low levels I think the upside here is.

Ronald Camden: So I'll start with pricing and in terms of pricing, we expect to get inflationary level pricing.

Murray: That's not in our guidance is that what we're hearing from customers is they are acutely focused on increasing sales, they're getting promotional activity.

Ronald Camden: We are most focused on being long term partners with our customers that we treat each customer and market equally at times, we will trade volume for price. If it makes sense for US and then we expect to continue to get productivity improvements energy efficiencies.

Murray: All kinds of things that discounting in order to get volumes, moving and that would be all upside versus our guidance is our incremental margins are are great and we have strong operating leverage and so we're not being optimistic in our guidance, we're assuming the market stays the way it is today.

Ronald Camden: <unk> synergies and then.

Ronald Camden: On the pipeline the pipeline is exciting right.

Ronald Camden: Our guide we have the capacity, we're not saying we're going to deploy $1 5 billion was saying we have the capacity as we laid out between our available debt and where our ratios are to do that and there is a fund development opportunities Theres a ton of M&A opportunities. If you look back over the past couple of years, we spent about $7 50, each year in terms of growth capital right as you know we.

Speaker Change: Your next question comes from the line of keeping Kim from Truest. Your line is open.

Kim: Thanks, I appreciate your commentary and the color you provided guidance, but.

Ronald Camden: Been working hard to get our balance sheet in the right position to get the IPO done. So we can really accelerate the growth of the company and who are there and we're super excited about that it will work on a lot of exciting things that we hope to tell people about here in the near future.

Speaker Change: I was just wondering if you can provide some more detail.

Murray: Yeah.

Murray: For example in occupancy.

Murray: It sounds like that could still mean negative occupancy next year as well.

Murray: First half of this year might be a little bit challenging I'm not sure. If that's correct, but if you can provide some details on that and maybe pricing. Thank you.

Ronald Camden: Right.

Glenn: Your next question comes from the line of Glenn.

Speaker Change: Ahead, Nicholas <unk> from Baird. Your line is open.

Murray: Yeah for sure so let me drill down a little bit on seasonality.

Speaker Change: Hey, Good morning, guys just wanted to drill in a little bit on pricing within kind of just on a per pallet basis seems as though that's kind of I know you guys aggressively priced in 'twenty three and now it's a little bit flat I guess as you look at the 25% are you willing on the new customer acquisition to kind of give up price to <unk>.

Greg Lehmkuhl: Greg covered a lot of it's been unusual in the last several years getting all the stuff Greg just talked about though if we drill down just a little bit more. So if you look at our 2024 results by quarter for our new 2025 same store pool, right, which is in the appendix you actually see that last year that.

Speaker Change: Type of occupancy or how should we be thinking about that.

Murray: Soi almost exactly to say each of the four quarters like with a $5 billion or so thats highly unusual.

Speaker Change: Yes.

Speaker Change: Good morning, and I'll, just reinforce what I said I mean overtime, we think we can get inflationary level price increases and we're looking at each market the supply demand dynamics in each market and we're looking to partner with customers to make sure that we.

Murray: And that and Thats. The result of what Greg just said, which was last year in the first half we still had elevated inventory levels and then normal seasonality began in the second half.

Speaker Change: Stay a valued partner for the next for the long term here.

Murray: So that dynamic therefore create challenging comps for us in the first half of this year.

Speaker Change: That said we.

Speaker Change: We are getting inflationary level prices.

Murray: The good news as Greg mentioned right at Ww industry has stabilized at these lower level and as Greg also that we're not assuming any improvement so.

Speaker Change: Nearly all of our markets and feel confident we can do that it's very difficult to see in the external metrics because.

Speaker Change: A little bit of mix shift between the.

Murray: Drilling down again normal seasonality. So if we look at pre pandemic data back when when our industry was more normal.

Speaker Change: Commodities or anything else, Kevin Kevin mask.

Speaker Change: That is at that price.

Speaker Change: Our next question comes from the line of Todd Thomas from Keybanc. Your line is open.

Murray: Q1, generally declines from Q4.

Murray: <unk> generally declined a little bit from Q1, Q3 jumps up a fair amount and then Q4 is typically the peak aided by the holiday season that starts to come back down again in Q1.

Todd Thomas: Hi, Thanks, good morning.

Todd Thomas: I wanted to follow up on capital deployment I realized guidance does not include anything incremental that has not been announced but how should we think about the mix of equity and debt to fund future investments from here with with leverage ending the year at just under five times.

Murray: So we see this year as a normal year and expect our results to follow that trend. So if you break that out it's sort of first half second half generally in a normal year, you'll get 47% to 48% of your NOI EBITDA in the first half and $52 53 in the second half and Thats, what our guidance assumes.

Todd Thomas: Net debt to adjusted EBITDA basis, and then separately I was just curious if you could talk about the yield pick up.

Todd Thomas: Related to the $1 $3 billion of completed and in process.

Speaker Change: Your next question comes from the line of Ronald Camden from Morgan Stanley. Your line is open.

Todd Thomas: Projects that $101 million of NOI that opportunity how should we think about the cadence of that incremental NOI coming online during 2025.

Ronald Camden: Hey, just a quick two part just.

Speaker Change: On the same store NOI guidance for the warehouse segment I'd Love, if you could drill in a little bit how much of that is top line versus expense saves just high level, what's driving that and then the second question is just that one $5 billion of.

Todd Thomas: Yes, so on.

Todd Thomas: The first one so the $1 5 billion that just assumes funding with cash and debt so no equity.

Todd Thomas: We've got plenty of opportunities to accelerate that with equity if the math worked out we'd always be willing to do that obviously that depends on share price and where you want to issue shares. So we're just assuming that in cash.

Murray: Of capital deployment can you talk a little bit more about the pipeline the kind of opportunities that youre looking at.

Todd Thomas: On the second point, which I think is an important one.

Murray: So I'll start with pricing in terms of pricing, we expect to get inflationary level pricing.

Todd Thomas: We have a number of these great buildings that are either we had hazelhen opened recently, we've got a lot of things in progress. We talk about that 100 billion plus you know I'd say about a quarter that we're expecting that to flow through this year and then and then the remainder in out years I mean, we are very consistent.

Murray: We are most focused on being long term partners with our customers that we treat each customer and market equally at times, we will trade volume for price. If it makes sense for US and then we expect to continue to get productivity improvements energy efficiency savings.

Murray: <unk> synergies and then the other on the pipeline yes.

Todd Thomas: Yield on these projects at the huge part of our of our compounding and we want to make sure that people understand that this is a big part of what we do and we have got a lot of stuff you've already done that just hasnt both are our financials yet.

Murray: Pipeline is exciting right now.

Murray: Our guide we have the capacity, we're not saying we're going to deploy $1 5 billion was saying we have the capacity as we laid out our available debt and where our ratios are to do that and there is a planned development opportunities. There's a ton of M&A opportunities. If you look back over the past couple of years, we spent about $7 50, each year in terms of growth capital right as you know.

Yeah.

Todd Thomas: Okay.

Todd Thomas: Okay.

Speaker Change: Your next question comes from the line of Jeremy <unk> from Goldman Sachs. Your line is open.

Jeremy: Hey, there.

Jeremy: Regarding occupancy any concerns about the gap between economic and physical occupancy how do you guys think about that spread between those two metrics.

Murray: We've been working hard to get our balance sheet in the right position to get the IPO done. So we can really accelerate the growth of the company who are there and we're super excited about that it will work on a lot of exciting things that we hope to tell people about here in the near future.

Jeremy: Yeah, I mean, our our spread is relatively tight between physical and market economic and we see that absolutely is a good thing we think long term customers do not want a paper space that they're not using and we feel that that's that's a great place to be.

Murray: Yeah.

Murray: Thanks.

Murray: Okay.

Murray: Okay.

Speaker Change: Got it thank you.

Murray: Yeah.

Jeremy: Of course.

Moderator: Our next question comes from the line of Blaine Heck from Wells Fargo. Your line is open.

Murray: Yeah.

Murray: Okay.

Blaine Heck: Great. Thanks. Good morning can you guys talk about supply and whether youre seeing pressure on rates driven by new supply in any specific markets and then looking forward to 'twenty 2025, and beyond what do deliveries or completions look like broadly I guess will we continue to have supply.

Murray: Yeah.

Murray: Yeah.

Murray: Okay.

Murray: Okay.

Speaker Change: Your next question comes from the line of Oh go ahead Nicolas Tillman from Baird. Your line is open.

Nicolas Tillman: Hey, Good morning, guys just wanted to drill in a little bit on pricing within kind of just on a per pallet basis. It seems as though that's kind of I know you guys aggressively priced in 'twenty three and now it's a little bit flat I guess as you look at the 25% are you willing on the new customer acquisition to kind of get.

Moderator: <unk> this year.

Moderator: Good morning, and thanks for the question so.

Moderator: I'll start just by saying.

Moderator: We're in a we're in a burner market that grows long term globally, a very stable market as I talked about.

Moderator: Our throughput Allison core holdings have not changed a lot. It is an attractive industry for that reason.

Murray: Price to prioritize occupancy or how should we be kind of thinking about that.

Moderator: Not surprising we've seen new investment over the last few years. So as we discussed last quarter. Like you mentioned there are some new competitors that even speculative developer developers that have entered our space.

Murray: Yes ill just ill.

Murray: And I'll just reinforce what I said I mean overtime, we think we can get inflationary level price increases and we're looking at each market the supply demand dynamics in each market and we're looking to partner with customers to.

Moderator: In the current construction cycle, what that new capacity peaked in 2023.

Moderator: It came down by about 50% in both 2024 and 2025 levels versus 2023, and we expect those new deliveries to continue to decrease over time. It's also important dimension that the capacity that's been added over the last few years has been built at the highest cost to build in history.

Murray: Make sure that we stay a value partner for the next for the long term here.

Murray: That said, we are getting inflationary level prices in nearly all of our markets and feel confident we can do that it's very difficult to see in the external metrics because.

Murray: A little bit of mix shift between the.

Moderator: Absolutely for sure.

Speaker Change: Commodities or anything else, Kevin Kevin mask.

Moderator: And we don't expect those build cost to decline.

Speaker Change: Got it.

Moderator: From the current levels, because deflation land cost entitlement and just the complexity of building, especially with automation and so as such it is very hard for these smaller newer players to succeed at anything below market prices in a market with rising capital cost and we actually expect some of these businesses to underperform and some.

Speaker Change: Our next question comes from the line of Todd Thomas from Keybanc. Your line is open.

Todd Thomas: Hi, Thanks, good morning.

Murray: I wanted to follow up on capital deployment I realized guidance does not include anything incremental that has not been announced but how should we think about the mix of equity and debt to fund future investments from here with with leverage ending the year at just under five times on net debt to adjusted EBITDA basis, and then separately.

Moderator: To fail and we're seeing evidence of that in the marketplace and.

Moderator: And we expect some of these dislocations to create opportunities for us as we continue to position ourselves as acquirer of choice.

Moderator: And when you compare us to these new entrants I mean, we have very distinct advantages. We have huge scale advantages. We have the network effects that come with that we are the world leader in cold storage automation, we have proprietary technology like when you usually the Nols, we have C level customer relationships with over 13000 customers around the world.

Murray: I was just curious if you could talk about the the yield pick up.

Murray: Related to the $1 $3 billion of completed and in process.

Murray: Projects at $101 million of NOI that opportunity how should we think about the cadence of that incremental NOI coming online during 2025.

Moderator: And we have our Gis segment, where we can support their cold chain from farm to Fork, where none of these other competitors can do that so long story short, we feel great about our ability to compete.

Murray: Yes, so on the.

Murray: The first one so the $1 5 billion that just assumes funding with cash and debt so no equity.

Murray: We've got plenty of opportunities to accelerate that with equity if the math worked out we always be willing to do that obviously that depends upon share price and where do you want to issue shares. So we're just assuming that in cash.

Moderator: Thank you.

Moderator: Of course.

Speaker Change: Your next question comes from the line of Steve Sochua from Evercore ISI. Your line is open.

Murray: On the second point, which I think is an important one.

Speaker Change: Yeah. Thanks could you maybe just talk a little bit about the pricing that you are seeing on the acquisitions that you may be looking at like how has that changed and with your cost of capital changing.

Murray: We have a number of these great buildings that are either we had hazelhen opened recently, we've got a lot of things in progress we talk about that $100 plus you know I'd say about a quarter of that we're expecting that to flow through this year and then and then the remainder in out years that we are very consistent.

Speaker Change: How are you thinking about pricing on new deals going forward.

Speaker Change: Yeah. So you know obviously the market here has been challenged the last few years and that you sort of see a little bit of that in the public valuations and it also flows through the private valuations ultimately we're going to make the best decisions to drive long term value for our shareholders. The highest risk adjusted returns. So there is there is there.

Murray: Yield on these projects that the huge part of our of our compound again, we want to make sure that people understand that this is a big part of what we do and we have got a lot of stuff. We've already done that just hasnt boulder, our financials yet.

Murray: Yeah.

Murray: Okay.

Murray: Yes.

Speaker Change: Your next question comes from the line of Jeremy <unk> from Goldman Sachs. Your line is open.

Speaker Change: Always a good arbitrage opportunity for anything that we do so in the near term you if that accrues directly to our shareholders in that as we improve the businesses over time.

Jeremy: Hey, there regarding occupancy.

<unk> is about the gap between economic and physical occupancy how do you guys think about the spread between those two metrics.

Speaker Change: It also will accelerate those returns and so really no changes.

Speaker Change: That's how we've done this in the past, we definitely benefit from having the balance sheet that we have today in that lower cost of capital and that gives us that advantage of being number one in the industry gives us a huge advantage.

Jeremy: Yes, I mean, our spread is relatively tight between physical and market economic and we see that absolutely is a good thing we think long term that customers do not want a paper space that they're not using and we feel that that's that's a great place to be.

Speaker Change: So like I said, we're excited about about the opportunities here.

Speaker Change: If we can take advantage of any market dislocations in the near term, we certainly will.

Jeremy: Got it thank you.

Speaker Change: Okay.

Jeremy: Of course.

Speaker Change: Our next question comes from the line of Blaine Heck from Wells Fargo. Your line is open.

Speaker Change: Your next question comes from the line of Michael Carroll from RBC. Your line is open.

Blaine Heck: Great. Thanks.

Michael Carroll: Yeah. Thanks, Greg I wanted to circle back on your last comments I know you indicated that the pilot tests are showing strong initial results can you help us understand what that means I guess what did these pilots prove and are you seeing better revenue growth and better margins at those assets I guess, how can we clarify.

Speaker Change: Good morning can you guys talk about supply and whether youre seeing pressure on rates driven by new supply in any specific markets and then looking forward to 2000, and 2025 and beyond what do deliveries or completions look like broadly I guess will we continue to have supply pressure this year.

Speaker Change: That comment that you're seeing stronger results than you expected.

Speaker Change: Good morning, and thanks for the question so.

Michael Carroll: Yeah, great great Great question.

Speaker Change: I'll start just by saying we're in a we're in a word a market that grows long term globally, a very stable market as I talked about.

Michael Carroll: So as I mentioned the window estimates initiatives very very much on track for pilot surgery, but they are absolutely exceeded our expectations. We're super excited about it. This year is about proving out the functionality of the technology and getting it rolled out different types of facilities. So think think Doc speak high reach they taste pik.

Speaker Change: Throughput Allison core holdings have not changed a lot you've used an attractive industry for that reason and it's not surprising we've seen new investment over the last few years. So as we discussed last quarter. Like you mentioned there are some new competitors that even speculative developers developers that have entered our space.

Michael Carroll: And getting all that technology rollout every aspect of the operation across different facility types to prepare for a broader rollout next year.

Speaker Change: In the current construction cycle, what that new capacity peaked in 2023.

Michael Carroll: So as I mentioned, we believe that this technology can fundamentally transform our operations and we are seeing early indications that I actually have a great story, Michael from our first pilot in the first week.

Speaker Change: It came down by about 50% in both 2024 and 2025 levels versus 2023, and we expect those deliveries to continue to decrease over time. It's also important dimension that the capacity that's been added over the last few years has been built at the highest cost to build it in history.

Michael Carroll: Pulling out.

Early this year in Chicago land, our COO genre for Vera was just standing there observing the operation kind of wash.

Speaker Change: Absolutely for sure.

Speaker Change: And we don't expect those build costs to decline.

Michael Carroll: Active kind of controlling the orchestra the operation if you will and one of our most senior team members a 30 year reach truck driver who had been.

Speaker Change: The current levels, because deflation land cost entitlement and just the complexity of building, especially with automation and so as such it is very hard for these smaller newer players to succeed at anything below market prices.

Michael Carroll: Been working with this technology for two days.

Jeff: Drove by Jeff.

Jeff: Its forklift gave him a thumbs up and said this is reaching OSM can you actually use a little bit more different words, but I'll tell you I'll be quite and so I think the the buzz and the excitement within the company and in our leadership team has never been higher because of a bit more optimistic that said, it's really early and we want to wait until we have more proof points before we.

Speaker Change: Market with rising capital cost.

Speaker Change: We expect the extra do you expect some of these businesses underperform and some to fail and we're seeing evidence of that in the marketplace and we expect some of these dislocations to create opportunities for us as we continue to position ourselves as acquirer of choice.

Speaker Change: So the industry and when you compare us to these new entrants I mean, we have very distinct advantages. We have huge scale advantages. We have the network effects that come with that we are the world leader in cold storage automation, we have proprietary technology like lineage link OS we have C level customer relationships with over 13000 customers.

Jeff: Come up with any sort of additional color, but we will definitely we are extremely excited to share that as this year progresses.

Speaker Change: Your next question comes from the line of Daniel Guglielmo from capital One Securities. Your line is open.

Speaker Change: The World and we have our Gis segment, where we can support their cold chain from farm to Fork, where none of these other competitors can do that so long story short, we feel great about our ability to compete.

Daniel Guglielmo: Hello, everyone. Thank you for taking my question I know you have a mix of large and small customers with the top 25 customers, making up about a third of revenues as we continue to come out of this customer demand kind of trough are you seeing a divergence in the speed at which large customers army.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Of course.

Speaker Change: Your next question comes from the line of Steve <unk> from Evercore ISI. Your line is open.

Speaker Change: <unk> versus your smaller customers or are there any trends between the two.

Steve: Yeah. Thanks could you maybe just talk a little bit about the pricing that you are seeing on the acquisitions that you may be looking at like how has that changed.

Speaker Change: So I would say no. We are our customer base has been very stable as we look over the trailing 12 here and we wouldn't anticipate that to change moving forward.

Speaker Change: With your cost of capital changing.

Speaker Change: Italy.

Speaker Change: With our scale, we're touching all commodities all customers in all regions in which we operate in.

Steve: How are you thinking about pricing on new deals going forward.

Steve: Yeah. So obviously the market here has been challenged the last few years and that you sort of see it a little bit of that in the public valuations and it also flows through the private valuations ultimately we're going to make the best decisions to drive long term value for our shareholders and at the highest risk adjusted returns. So there is there is.

Speaker Change: That diversification is part of the.

Speaker Change: A big part of our story, so any shift that would happen that we're not anticipating.

Speaker Change: One would benefit than other wood wood could be impacted but we're super diversified and concern for us.

Speaker Change: Great. Thank you.

Speaker Change: Of course.

Steve: There is always a good arbitrage opportunity for anything that we do so in the near term.

Speaker Change: Your next question comes from the line of Michael Goldsmith from UBS. Your line is open.

That equates directly to our shareholders in that as we improve the businesses over time.

Good morning, Thanks, a lot for taking my question I appreciate some of the background on the supply, but just maybe ask a little bit more directly will competitive supply.

Steve: Also will accelerate those returns and so really no changes.

Steve: Versus how we we've done this in the past.

Speaker Change: For 2025 will not be lower higher where the seam.

Steve: Definitely benefit from having the balance sheet that we have today in that lower cost of capital and that gives us that advantage of being number one in the industry gives us a huge advantage.

Speaker Change: Then last year. Thanks.

Speaker Change: But what do you mean in terms of new things coming online.

So like I said, we're excited about about the opportunities here.

Speaker Change: It's slower.

Steve: We can take advantage of any market dislocations in the near term, we certainly will.

Speaker Change: Yeah.

Speaker Change: Yes, I guess, yes, I mean, what competitive.

Steve: Okay.

Speaker Change: <unk> dynamics.

Speaker Change: Our next question comes from the line of Michael Carroll from RBC. Your line is open.

Speaker Change: We would expect it to be consistent with last year.

Steve: Okay.

Speaker Change: Okay. Thank you very much.

Speaker Change: Yeah. Thanks, Greg I wanted to circle back on your last comments indicated.

Speaker Change: New supply Cup going down moving forward.

Speaker Change: We indicated that the pilot tests are showing strong initial results can you help us understand what that means.

Speaker Change: I appreciate it.

Speaker Change: Yes.

Speaker Change: Your next question comes from the line of Tayo Okusanya from Deutsche Bank. Your line is open.

What did these pilots prove and are you seeing better revenue growth and better margins at those assets I guess, how can we clarify that comment that you're seeing stronger results than you expected.

Speaker Change: Yeah.

Tayo Okusanya: Hi, Yes, good morning, everyone.

Tayo Okusanya: Question around I mean, you look at the USDA data to.

Speaker Change: Yes, great great Great question.

Tayo Okusanya: Two kind of suggesting that inventory pressures.

Speaker Change: So as I mentioned.

Speaker Change: So this initiative is very very much on track a pilot surgery, but they are absolutely exceeded our expectations. We're super excited about it. This year is about proving out the functionality of the technology and getting it rolled out to different types of facilities. So think sink dock high reach they taste pik.

Tayo Okusanya: Are still existing in the business either there's a lot of talk of kind of continued inflationary pressure on food costs.

Tayo Okusanya: And some of the more recent data around like weaker consumer sentiment I mean is it kind of just look at a combination of those things.

Speaker Change: And getting all that technology rollout every aspect of the operation across different facility types to prepare for a broader rollout next year and so as I mentioned, we believe that this technology can fundamentally transform our operations and we are seeing early indications that I actually have a <unk>.

Tayo Okusanya: You kind of look at that as a dynamic that continues to kind of put pressure on things for a while.

Tayo Okusanya: Some of your comments that it seemed like 2025 movies a year of market stabilization.

Tayo Okusanya: But I just kind of compare it against some of that demand related data and I just kind of wonder if its got kind of linger a little longer than maybe everyone's expecting.

Speaker Change: Great story, Michael from our first pilot.

Speaker Change: First week.

Speaker Change: We're rolling out.

Speaker Change: This year in Chicago, and our COO, Jack Rivera was just standing there observing the operation kind of wash little less active kind of controlling the orcas throughout the operation. If you will and one of our most senior team members a 30 year reach truck driver who had been had been.

Tayo Okusanya: So on the yes.

Tayo Okusanya: I just I'll just comment so I went through all of that sort of normal seasonality information, we look back the USDA data for that as well. So I think what youre seeing in the USDA data is is that normal seasonality at least over the past year as we as we talked about starting in the back half of last year got great. Yeah, and I think it's just important to point out again that despite the.

Speaker Change: Working with this technology for two days.

Speaker Change: Drove by Jeff.

Speaker Change: But its forklift gave him a thumbs up and said this is freaking awesome when you actually use a little bit more different words.

Tayo Okusanya: Inflationary pressures our throughput at our cohorts <unk> holdings has not changed.

Tayo Okusanya: And so that the pressure has really been more on inventory levels and that peaked in the second quarter of last year. Since then the inventory levels are.

Speaker Change: I'll be quiet and so.

Speaker Change: Think the.

Speaker Change: Buzz and the excitement within the company and in our leadership team has never been higher because of a bit more optimistic that said, it's really early and we want to wait till we have more proof points before we come out with any sort of additional color, but we will definitely we are extremely excited to share that as this year progresses.

Tayo Okusanya: Our core holdings have stabilized at a lower level and that is what our guide our guide does not assume that there is any sort of rebound in throughput or or inventory holdings, we assume things are where they're at where they are they're not going to improve and we feel we can perform in that environment and just a little more on the USDA data I think everybody knows this but.

Speaker Change: Your next question comes from the line of Daniel Guglielmo from capital One Securities. Your line is open.

Tayo Okusanya: USDA data is based on a voluntary survey conducted via telephone.

Daniel Guglielmo: Hello, everyone. Thank you for taking my question I know you all have mix of large and small customers with the top 25 customers, making up about a third of revenues as we continue to come out of this customer demand.

Tayo Okusanya: The managers and only a portion of the total stores in the U S report and many are.

Tayo Okusanya: Our reported consistently orally report for a portion of their warehouses and so well it's an interesting data point is.

Daniel Guglielmo: Are you seeing a divergence in the speed at which large customers army.

Tayo Okusanya: Perfect.

Daniel Guglielmo: Base versus your smaller customers or are there any trends of note.

Tayo Okusanya: 20% of our business is outside the U S. It will be 40% of our commodity basket in the U S is reported through the USDA. So we don't believe that's a good predictor of our results in the short term, although it does certainly a correlation in the long term.

Daniel Guglielmo: Thank you.

Daniel Guglielmo: So I would say no. We are our customer base has been very stable as we look over the trailing 12 here and we wouldn't anticipate that to change moving forward and importantly were.

Tayo Okusanya: Helpful. Thank you.

Daniel Guglielmo: Our scale, we're touching all commodities all customers and all in all the regions with which we operate.

Of course.

Speaker Change: Your next question comes from the line of Michael Mueller from Jpmorgan. Your line is open.

Daniel Guglielmo: That diversification is part of the.

Michael Mueller: Yes, Hi, I'm curious what do you see as more normalized longer term physical physical and economic occupancy levels for your portfolio.

A big part of our story, so any shift that would happen, but we're not anticipating.

Daniel Guglielmo: One would benefit and other wood wood could be impacted but we're super diversified and not a concern for us.

Michael Mueller: I mean, we certainly strive to move up our physical occupancy and economic over time, as we gain market share and we face.

Daniel Guglielmo: Alright, thank you.

Daniel Guglielmo: Sure.

Speaker Change: Your next question comes from the line of Michael Goldsmith from UBS. Your line is open.

Michael Mueller: We are gaining market share our customers are always looking to optimize their supply chain, especially our larger customers. There's a number of.

Good morning, Thanks, a lot for taking my question I appreciate some of the background on the supply, but just maybe ask a little bit more directly will competitive supply.

Michael Mueller: Large optimization initiatives going on at our big customers one of them, but it just completed their seven month study and there'll be reconfiguring their north American supply chain that we were just informed earlier this week and it is a top 10 customer for us that we will get a 50% increase in business from that customer as this year progresses.

Speaker Change: For 2025 will that be.

Speaker Change: Lower higher or the Siem.

Speaker Change: Then last year. Thanks.

Speaker Change: But what do you mean in terms of new things coming online.

Speaker Change: It's slower.

Michael Mueller: <unk>.

Speaker Change: Yeah.

Michael Mueller: We're looking to gain market share, we think as we optimize our cost structure as we implement window asked as we continue our lean initiatives. We think we can be we think in the long term, we can be the lowest cost provider with the best service with the best scale with the broadest service offerings and that will lead to be to ongoing gain of market share overtime I think another.

Speaker Change: Yes, I guess what.

Speaker Change: Supply dynamics.

Speaker Change: We would expect it to be consistent with last year.

Speaker Change: Okay. Thank you very much.

Speaker Change: And new supply going down moving forward.

Speaker Change: I appreciate it.

Speaker Change: Yes.

Michael Mueller: Thing worth pointing out because with occupancy levels have come down there is space to sell great. We have we have room in our beliefs outside there's a ton of upside. So you don't have to go build a bunch of new buildings or to service. Your customers. You can you can take advantage of available space. So that I mean, that's again. This is none of this is embedded in our guide in.

Speaker Change: Your next question comes from the line of Tayo Okusanya from Deutsche Bank. Your line is open.

Speaker Change: Okay.

Tayo Okusanya: Hi, good morning, everyone.

Speaker Change: Question around you.

Speaker Change: Look at the USDA.

Speaker Change: Kind of suggesting that inventory pressures.

Michael Mueller: In normal course, we think we can drive mid single digit same store NOI before any of this other great things were talking about it.

Speaker Change: Are still existing in the business, there's a lot of talk of kind of.

Michael Mueller: We'll be there here in the second half of the year.

Speaker Change: Continued inflationary pressure on food costs.

Michael Mueller: And moving forward so it's a pretty exciting time as we mentioned.

And some of the more recent data around like weaker consumer sentiment I mean is it kind of.

Speaker Change: Your next question comes from the line of Victor <unk> from Scotiabank. Your line is open.

Speaker Change: Just look at a combination of those things.

Speaker Change: Do you kind of look at that as a.

Greg Mcginniss: Oh, it's added extra Friday on this Greg Mcginniss.

Speaker Change: A dynamic that continues to kind of put pressure on things for a while.

Greg Mcginniss: I'd like to ask so at NAREIT you highlighted in your focus on managing our SG&A expenses are able to provide more clarity on the expectations around that for 2025, and how you plan to address going forward.

Speaker Change: Some of your comments today seem like 2025 movies, a year of market stabilization.

But I just kind of compare it against some of that demand related data and I, just kind of wonder if that kind of linger through a little longer than maybe everyone expected.

Greg Mcginniss: Yes for sure.

Greg Mcginniss: So.

Greg Mcginniss: If you look at operating leverage both operationally and through admin is a huge part of what we're driving here at the company you saw EBITDA growth in AR.

Speaker Change: So on the.

Speaker Change: Yes, I'll just I'll just comment so I went through all of that sort of normal seasonality information, we look back the USDA data for that as well. So I think what youre seeing in the USDA data is is that normal seasonality at least over the past year as we as we talked about something in the back half of last year got great. Yeah, and I think it's just important to point out again.

Greg Mcginniss: Down market last year. So we're always looking to optimize I mean, we're investing more in certain areas. We are.

Greg Mcginniss: We're making sure our other areas have the right size.

Greg Mcginniss: And it's important part of what we do so there's a little bit of growth in admin for 25 of course, because we're a new public company and there's public company costs and things, we didn't have before but other than that.

Speaker Change: Slight inflationary pressures our throughput in our cohort of the holdings has not changed.

Greg Mcginniss: There's really just not much growth and I think there's again, we built this company because we plan to grow this company to our enormous scale over a long period of time and we've made up some of those investments in advance and so moving forward, we can grow without a ton of incremental investment in admin I can I can tell you our CEO and I are very focused on this.

Speaker Change: And so that pressure has really been more on inventory levels and that peaked in the second quarter of last year. Since then the inventory levels in our core holdings have stabilized at a lower level and that is what our guide our guide does not assume that there's any sort of rebound in throughput or or inventory holdings, we assume.

Greg Mcginniss: Thank you.

Speaker Change: Things are where they're at where they are they're not going to improve and we feel we can perform in that environment.

Speaker Change: Your next question comes from the line of Vikram Malhotra from Mizuho. Your line is open.

Speaker Change: A little more on the USDA data I think everybody knows this but.

Vikram Malhotra: Good morning, Thanks for taking the question I just wanted to clarify on your kind of occupancy and maybe just NOI comment and assumptions I think you mentioned.

USDA data is based on a voluntary survey conducted via telephone facility managers and only a portion of the total stores in the U S report and many important.

Vikram Malhotra: Having sort of NOI 47 ish percent first half and the balance in the second half that's kind of normal seasonality.

Speaker Change: Our reported consistently early report for a portion of their warehouses and so well, it's an interesting data point.

If I just run that through just to just to clarify is that embedding basically occupancy falling in the first half.

Speaker Change: Thanks.

Speaker Change: 20% of our business is outside the U S at least 40% of our commodity basket in the U S. As reported through the USDA. So we don't believe that's a good predictor of our results in the short term, although it does certainly a correlation in the long term.

Vikram Malhotra: Up a fair amount in the second and essentially the NOI growth negative in the first half just on your on the percentage you gave in a big pick up in the second could you clarify that thanks.

Vikram Malhotra: Yeah, I think if you run those numbers through your models you are sort of flat flattish to slightly down in the first half and up in the second half.

Speaker Change: Helpful. Thank you.

Speaker Change: Of course.

Vikram Malhotra: I think thats normal seasonality because.

Speaker Change: Your next question comes from the line of Michael Mueller from Jpmorgan. Your line is open.

Vikram Malhotra: Inventory levels are elevated the first half of last year. So yeah, that's very consistent with what we just.

Michael Mueller: Yes, Hi, I'm curious what do you see as more normalized longer term physical physical and economic occupancy levels for your portfolio.

Vikram Malhotra: <unk> laid out.

Vikram Malhotra: Thank you.

Your next question comes from the line of Keybanc Kim from Truest. Your line is open.

Michael Mueller: I mean, we certainly strive to move up our physical occupancy and economic over time, as we gain market share and we base.

Speaker Change: Thanks for taking me back.

Vikram Malhotra: Two quick follow ups first.

Vikram Malhotra: What does the stock based comp assumed in your 25 guidance and second I'm looking at page 11, I'm, sorry page 15 on your slide deck.

Michael Mueller: We are gaining market share our customers are always looking to optimize their supply chain, especially our larger customers. There is a number of.

Vikram Malhotra: Curious why did the non same store storage revenue fall I mean, it looks like Youre economic occupancy fell 700 basis point, but your average occupied pallets were actually up two 8%. So just a little confusing.

Michael Mueller: Large optimization initiatives going on at our big customers one of them, but we have just completed their seven month study and there'll be reconfigured their north American supply chain and we were just informed earlier this week and it's a top 10 customer for us that will get a 50% increase in business from that customer as this year progresses.

Vikram Malhotra: So I mean non same store right. There's a lot we had some building to move out our same store and non same store because of the solar fire last year, because theres just a lot of stuff embedded in there.

Michael Mueller: <unk>.

Michael Mueller: We're looking to gain market share, we think as we optimize our cost structure as we implement with OIS as we continue our lean initiatives. We think we can be we think in the long term, we can be the lowest cost provider with the best service with the best scale with a broad service offerings and that will lead to ongoing gain of market share.

Vikram Malhotra: Sorry, what was the first question.

Speaker Change: Stock based on this topic.

Speaker Change: I think we're at a normal run rate now in the fourth quarter, a big part of that stock based comp increase is our starting line right, where we went to the entire company and offered equity to the majority of people in and I think that that's driven huge benefit and it will it'll help us in a million different ways and so that's kind of in the base now.

Speaker Change: Yes, I think another thing worth pointing out right because our occupancy levels have come down there is space to sell great. We have we have room in our <unk> side.

Speaker Change: Upsides, you don't have to go build a bunch of new buildings or to service to your customers. You can you can take advantage of available space. So I mean, that's again. This is none of this is embedded in our guide in normal course, we think we can drive mid single digit same store NOI before any of this other great things we're talking about it.

Speaker Change: Part of the reason all time very good productivity.

Speaker Change: So what is the normalized run rate.

Speaker Change: Yes, I think we are there for the fourth quarter.

Speaker Change: Okay. Thank you.

Speaker Change: We'll be there here in the second half of the year.

Speaker Change: Your next question comes from the line of Alexander Goldfarb from Piper Sandler Your line is open.

Speaker Change: And moving forward so it's a pretty exciting time as we mentioned.

Speaker Change: Yeah.

Alexander Goldfarb: Hey, thank.

Speaker Change: Thank you for the for the follow up just a two parter here if you don't mind.

Speaker Change: Your next question comes from the line of Victor <unk> from Scotiabank. Your line is open.

Speaker Change: One if you could just give us an update on the lock up or I guess, the exploration of backup of the pre IPO investors, where you guys stand.

Speaker Change: Oh, it's added extra Friday on this Greg Mcginniss.

Speaker Change: I'd like to ask so at NAREIT, you highlighted and you focus on managing our SG&A expenses.

Speaker Change: And what's going on there and then second part is slide five of the presentation really speaks to the outperformance the platform versus flat year over year revenue.

To provide more clarity on the expectations around that for 2025, and how you plan to address going forward.

Speaker Change: Yeah for sure so.

Speaker Change: And just curious is this more driven that outperformance is that more driven as you guys acquire assets and you're able to put them on to your system or do you also see similar outperformance at existing centers at existing warehouses.

Speaker Change: If you look at operating leverage both operationally and through admin is a huge part of what we're driving here at the company you saw nice EBITDA growth.

Speaker Change: Down market last year. So we're always looking to optimize I mean, we're investing more in certain areas. We are.

Speaker Change: And then do you think that this will be able to continue to that.

Speaker Change: Making sure our other areas have the right size.

Speaker Change: Okay.

Speaker Change: Technology platform that you guys spoke about the IPO, but that will continue to reflect in results and that we should see this continued outperformance of the metrics versus the topline revenue.

Speaker Change: And it's an important part of what we do so there's a little bit of growth in admin for 25 of course, because we're a new public company and there's public company costs and things, we didn't have before but other than that.

Speaker Change: Yeah. Thank you I appreciate the question.

Speaker Change: There's really just not much growth and I think there is again, we built this company because we plan to grow this company to have enormous scale over a long period of time and we've made some investments in advance and so moving forward, we can grow without a ton of incremental investment in admin I can I can tell you our CEO and I are very focused on this yes.

Speaker Change: I appreciate you, bringing it back to the sort of like.

Speaker Change: This is what we do we have world class operators, the lean processes or technology like yes, it's not just things. We acquire we are consistently always getting better the whole point of lean is youre always getting better right and we've rolled it out across some of our companies not everywhere and then Lynne Os's all amazing upside on top of this right. So yes, we expect to outperform.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Vikram Malhotra from Mizuho. Your line is open.

We expect continue to drive margin improvement as we both said on the call. We're just getting started and I think there's a ton of opportunity there and as we get better everything we acquire just becomes more accretive bigger networks more places too.

Vikram Malhotra: Good morning, Thanks for taking the question I just wanted to clarify on your kind of occupancy and maybe just NOI comments and assumptions I think you mentioned, having sort of NOI 47 ish percent first half and the balance in the second half that's kind of normal seasonality.

Speaker Change: To take advantage of that and then I wanted to also I appreciate the question on the.

Speaker Change: On the sell downs. So just some comments around that so we don't see the sell down process at all at a meaningful as a meaningful headwind.

Speaker Change: So if I just run that to just do just that.

Speaker Change: Clarify is that embedding basically.

Speaker Change: Occupancy falling in the first half and then picking up a fair amount in the second and essentially the NOI growth negative in the first half just on your on the percentage you gave in a big pick up in the second could you clarify that thanks.

Speaker Change: Sort of give you some color on why so Kevin and Adam.

Speaker Change: Our founders large individual long term shareholders. They are obviously very very aligned with the public market on making sure the settlement process.

Speaker Change: H, our public investors and all of our investors they control the settlement processing plan to execute the organized sell down over this three year period, starting with the IPO. They are very focused on long term share price appreciation at.

Speaker Change: Yeah, I think if you run those numbers through your models you are sort of flat flattish to slightly down in the first half and up in the second half.

Speaker Change: I think thats normal seasonality because.

Speaker Change: Inventory levels are elevated the first half of last year. So yes, that's very consistent with what we just laid out.

Speaker Change: All.

Speaker Change: Increasing the public float and expanding our base of great long term shareholders. We also have increased passive index ownership right, where we're about 30% index ownership now.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Keybanc Kim from Truest. Your line is open.

Speaker Change: And then again thinking about the sell down overtime, only 30% of the Companys publicly floated today.

Kim: Thanks for taking me back.

Speaker Change: Two quick follow ups first.

Speaker Change: The remaining 70% founders and management own a significant amount and obviously, we expect all of those people to be long term owners and so that leaves maybe two thirds of the stock owned by pre IPO investors and of course, we can't predict their investment decisions, but.

Speaker Change: Does the stock based comp assumed in your 25 guidance and second I'm looking at page 11, I'm, sorry page 15 on your slide deck.

Speaker Change: Just curious.

Speaker Change: Why did the non same store storage revenue fall I mean, it looks like your economic occupancy 700 basis point, but your average occupied pallets were actually up two 8%. So just a little confusing.

Speaker Change: We view a significant number of them and they told US that they are also long term holders of the stock. So this is a very organized process over the next two and a half years Theres no like cliff dates and things that.

Speaker Change: Should should worry people about this being a real headwind I appreciate the question.

Speaker Change: So I mean non same store right. There's a lot we had some buildings move out our same store and non same store because of the solar fire last year, because theres just a lot of stuff embedded in there.

Speaker Change: And your last question comes from the line of Jamie Feldman from Wells Fargo. Your line is open.

Jamie Feldman: Great. Thanks for taking the question and I think your response to Alex's may have answered some of it but the stocks underperformed since the IPO.

Speaker Change: Sorry, what was the first question.

Scott.

Speaker Change: I think I think we're at a normal run rate now in the fourth quarter, a big part of the stock based comp increase as our starting line right, where we want it to the entire company and offered equity to the majority of people in and I think that's driven huge benefit and it will it will help us in a million different ways and so that kind of in the base now.

Jamie Feldman: What are you in your conversations with investors. What do you think is most misunderstood what do you think the key concerns are and what would you tell people to get more comfortable, especially as we start a new year and you think business is stabilizing.

Jamie Feldman: Yes, I think what's been misunderstood is that we've been growing this company, 4% total EBITDA, 6% <unk> <unk> per share in a major inventory rebalancing and so.

Speaker Change: Part of the reason Paul.

Speaker Change: Very good productivity.

Speaker Change: So what is the normalized run rate.

Speaker Change: Yes, I think we're there for the fourth quarter.

Jamie Feldman: In the start in the stiffest headwinds the industry ceded many years, we're still growing we're built to grow right. Now we are delivering the best customer performance of our history, where we have record new business wins are operational our safety our energy management performance was great as Rob said, we'll get great G&A leverage going forward, we have technology and automation that no one else.

Speaker Change: Okay. Thank you.

Yeah.

Speaker Change: Your next question comes from the line of Alexander Goldfarb from Piper Sandler Your line is open.

Alexander Goldfarb: Hey, thank.

Speaker Change: Thank you for the for the follow up just a two parter here if you don't mind.

Speaker Change: One if you could just give us an update on the lock up or I guess, the exploration of backup of the pre IPO investors, where you guys stand.

Jamie Feldman: And the industry has and we're built to grow and we're going to prove that over the next several years and I do not think we're getting credit for that on the street, yet and I understand that we have to we have to show that but we've shown it for enough for a long time prior to going public we were kind of in this strange rebalancing conditions since we've been public and we expect to perform very well going forward.

Speaker Change: And what's going on there and then second part is slide five of the presentation really speaks to the outperformance in the platform versus flat year over year revenue.

Speaker Change: And just curious is this more driven that outperformance is that more driven as you guys acquire assets and you're able to put them on your system or do you also see similar outperformance at existing centers at existing warehouses.

Jamie Feldman: And that concludes our question and answer session I will now turn the call back over to Evan Barbosa for closing remarks.

Jamie Feldman: Thanks.

Evan Barbosa: The entire lineage team. Thank you for joining us today and for your interest in lineage <unk>. We look forward to speaking with you again on our next quarterly earnings call. Thanks, everybody.

Speaker Change: And then do you think that this will be able to continue.

Speaker Change: At the mid <unk>.

Speaker Change: Technology platform that you guys spoke about the IPO that that will continue to reflect in results and that we should see this continued outperformance of the metrics versus top line revenue.

Evan Barbosa: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Yeah. Thank you I appreciate the question.

Speaker Change: And I appreciate you, bringing it back to the sort of like this is this is what we do we have world class operators, the lean processes or technology like yes, it's not just things. We acquire we are consistently always getting better the whole point of lean is youre always getting better right and we've rolled it out across some of our companies not everywhere and then Lynne Os's all amazing upside on top of this right. So yes.

Speaker Change: We expect to outperform.

Speaker Change: We expect continue to drive margin improvement as we both said on the call. We're just getting started and I think there's a ton of opportunity there and as we get better everything we acquire just becomes more accretive yes bigger network.

Speaker Change: More places too.

Speaker Change: To take advantage of that and then I wanted to also I appreciate the question on the.

Speaker Change: On the sell downs. So just some comments around that so we don't see the sell down process at all at a meaningful as a meaningful headwind.

Speaker Change: Sort of give you some color on why so Kevin and Adam.

Speaker Change: Our founders large individual long term shareholders. They are obviously very very aligned with the public market on making sure the settlement process.

Speaker Change: Eighth our public investors and all of our investors they control the settlement process. They plan to execute the organized sell down over this three year period, starting with the IPO. They are very focused on our long term share price appreciation at all.

Speaker Change: All.

Increasing the public float and expanding our base of great long term shareholders. We also have increased passive index ownership right, where we're about 30% index ownership now.

Speaker Change: And then again thinking about the sell down overtime only 30% of the company is publicly floated today, but of the remaining 70% founders and management own a significant amount and obviously, we expect all of those people to be long term owners and so that leaves maybe two thirds of the stock owned by pre IPO investors and of course, we can't pre.

Speaker Change: Their investment decisions, but we view a significant number of them and they told US that they are also long term holders of the stock. So this is a very organized process over the next two and a half years Theres no like cliff dates and things that will.

Speaker Change: Should worry people about this big eight a real headwind I appreciate the question.

Speaker Change: And your last question comes from the line of Jamie Feldman from Wells Fargo. Your line is open.

Jamie Feldman: Great. Thanks for taking the question and I think your response to Alex's may have answered some of it but the stocks underperformed since the IPO.

Jamie Feldman: In your conversations with investors what do you think is most misunderstood what do you think the key concerns are.

Jamie Feldman: And what would you tell people to get more comfortable, especially as we start a new year and you think business is stabilizing.

Jamie Feldman: Yes, I think what's been misunderstood is that we've been we're growing this company, 4% total EBITDA, 6% ASM AFM Overshare major inventory rebalancing and so.

Jamie Feldman: In the start in the stiffest headwinds the industry has seen it many years, we're still growing we're built to grow right. Now we are delivering the best customer performance of our history, where we had record new business wins are operational or safety or energy management performance was great as Rob said, we will get great G&A leverage going forward, we have technology and automation that no one else.

Jamie Feldman: And the industry has and we're built to grow and we're going to prove that over the next several years and I do not think we're getting credit for that on the street, yet and I understand that we have to we have to show that but we've shown it alright huffer, a long time prior to going public we were kind of in this strange rebalancing division since we've been public and we expect to perform very well going forward.

Jamie Feldman: And that concludes our question and answer session I will now turn the call back over to Evan Barbosa for closing remarks.

Evan Barbosa: Thanks on behalf of the entire lineage team. Thank you for joining us today and for your interest in lineage. We look forward to speaking with you again on our next quarterly earnings call. Thanks, everybody.

Jamie Feldman: This concludes today's conference call. Thank you for your participation you may now disconnect.

Jamie Feldman: Okay.

Jamie Feldman: Yeah.