Q4 2024 Mobile Infrastructure Corp Earnings Call
Operator: Good afternoon, and welcome to the Mobile Infrastructure Corporation fourth quarter and full year 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero.
Good afternoon, and welcome to the mobile infrastructure Corporation fourth quarter and full year 2024 earnings conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw your question, please press star then two. Please note this event is being recorded.
Speaker Change: Questions to ask a question you May Press Star then one on your telephone keypad and withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to MS. KC Coterie Investor Relations Representative. Please go ahead ma'am.
Casey Kotary: I would now like to turn the conference over to Ms. Casey Kotary, Investor Relations Representative. Please go ahead, ma'am. Thank you, Operator.
Speaker Change: Thank you operator, good afternoon, everyone and thank you for joining us to review Mobile's fourth quarter and full year 'twenty 'twenty four performance with US today from mobile are manual Chavez C E O and Stephanie Hoak precedent.
Casey Kotary: Good afternoon, everyone, and thank you for joining us to review Mobile's fourth quarter and full year 2024 performance. With us today from Mobile are Manuel Chavez, CEO, and Stephanie Hogue, President. In a moment, we will hear management statements about the company's results of operations as of the fourth quarter and full year 2024.
Speaker Change: In a moment, we will hear managements statements about the company's results of operations as of the fourth quarter and full year 'twenty 'twenty four before we begin we would like to remind everyone that today's discussion includes forward looking statements, including projections and estimates of future events business or industry trends or business or financial results.
Casey Kotary: Before we begin, we would like to remind everyone that today's discussion includes forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual results may vary significantly from those statements and may be affected by the risks Mobile has identified in today's press release and those identified in its filings with the SEC, including Mobile's most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Mobile assumes no obligation and does not intend to update or comment on forward-looking statements made on this call.
Speaker Change: Actual results may vary significantly from those statements and may be affected by the risks mobile has identified in today's press release and those identified in its filings with the SEC, including Mobile's. Most recent annual report on Form 10-K, and its most recent quarterly report on Form 10-Q mobile assumes no obligation and does not.
Speaker Change: Tend to update or comment on forward looking statements made on this call. Today's discussion also contains references to non-GAAP financial measures that mobile believes provide useful information to its investors. These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results Mobiles earnings release and the most recent.
Casey Kotary: Today's discussion also contains references to non-GAAP financial measures that Mobile believes provide useful information to its These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results. Mobile's earnings release and the most recent quarterly report on Form 10-Q provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why Mobile uses these measures.
Manuel Chavez: Orderly report on Form 10-Q provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why mobile uses these measures I will now turn the call over to mobile C. E O manual Chavez to discuss fourth quarter and full year 'twenty 'twenty four performance manual.
Manuel Chavez: I will now turn the call over to Mobile CEO, Manuel Chavez, to discuss fourth quarter and full year 2024 performance. Manuel? Thank you, Casey. And thank you all for participating in today's call to review our fourth quarter and full 2024 results and discuss our business outlook for 2025. I would like to begin by thanking our team for delivering on key strategic priorities in 2024. This was our first full year as a publicly traded company, and the combined efforts of our team made it a year of substantial accomplishment. Highlights of the year included first, our successful conversion of 29 of our 40 parking assets in our portfolio to management contracts from leases, which benefits us from both revenue generating and expense reduction.
Manuel Chavez: Thank you Jamie and thank you all for participating in today's call to review, our fourth quarter and for 2024 results and discuss our business outlook for 2025.
Manuel Chavez: I would like to begin by thanking our team for delivering on key strategic priorities. In 2024. This was our first full year as a publicly traded company and the combined efforts of our team made it a year of substantial accomplishments.
Manuel Chavez: For the year included.
Manuel Chavez: First our successful conversion of 29 of our 40 parking assets in our portfolio to management contracts from wafers, which benefits us from both a revenue generating an expense reduction perspective.
Manuel Chavez: Second, we built out our sales and leasing team, which delivered higher new contract parking volumes in 2024, despite significant headwinds from the high attrition rates that have plagued the industry since the pandemic. Third, we strengthened our financial position. Fourth, we completed three asset sales at significant multiples of their net operating income as part of our ongoing asset rotation strategy. And lastly, beyond driving improved operating and financial performance, we took actions to build shareholder value. Taking a closer look at 2024, the conversion to managed contracts is meaningful in that it provides us, as owners, with important consumer analytics, which we utilize to assess parking trends in our market.
Manuel Chavez: Second we built out our sales and leasing team, which delivered higher new contract parking volumes in 2024, despite significant headwinds from the high attrition rates that have plagued the industry since the pandemic.
Manuel Chavez: Third we strengthened our financial position.
Manuel Chavez: Fourth we completed three asset sales at significant multiples of their net operating income as part of our ongoing asset rotation strategy.
And lastly, beyond driving improved operating and financial performance, we took actions to build shareholder value.
Manuel Chavez: Taking a closer look at 2020 for the conversion to manage contracts is meaningful and that it provides us as owners with important consumer analytics, which we utilize to assess parking trends in our markets.
Manuel Chavez: This gives us greater flexibility to optimize rates and utilization. At the same time, with managed contracts, we have more control over asset-level expenses and can more efficiently deploy incremental resources to assets with the greatest revenue potential. Another 10 of our assets are slated for conversion in 2026 and 2027. By going to the market with a systematic process and data-driven approach, our sales and leasing team was successful in signing new contracts and building a considerable pipeline for opportunities in 2025 and beyond. Their success in bringing in new business has been masked for much of 2024 by post-pandemic cancellations of corporate parking contracts, which brought attrition rates to four times higher than they were in 2019.
Manuel Chavez: This gives us greater flexibility to optimize rates and utilization.
Manuel Chavez: The same time with managed contracts, we have more control over asset level expenses and can more efficiently deploy incremental resources to assets, what the greatest revenue potential.
Manuel Chavez: Another 10 of our assets are slated for conversion in 2026 and 2027.
Manuel Chavez: By going to the market with a systematic process and data driven approach our sales and leasing team was successful in signing new contracts and building a considerable pipeline for opportunities in 2025 and beyond.
Manuel Chavez: Their success in bringing in new business has been masked for much of 2024 by post pandemic cancellations of corporate parking contracts, which brought attrition rates to four times higher than they were in 2019.
Manuel Chavez: We believe the impact from these cancellations is pretty much behind us, as most of the corporates located in our markets have determined their policies with respect to the number of days their employees are required to spend in the office. In both the third and fourth quarters of this year, Revenue per Available Stall, or REBPAS, showed year-on-year growth, which supports our expectation that we have reached an inflection point with return-to-office trends most prominent in the healthcare, professional services, food and beverage, and government sector. In the 2024 fourth quarter, we saw the beginning of what will have a very positive impact on revenue growth from the conversion of Class B downtown office space to residential apartment living.
Manuel Chavez: We believe the impact from new cancellations, it's pretty much behind us as most of the corporate is located in our markets have determined their policies with respect to the number of days our employees are required to spend in the office.
Manuel Chavez: In both the third and fourth quarters of this year revenue per available stall or Rep pass showed year on year growth, which supports our expectation that we have reached an inflection point, where if return to office trends most prominent in the health care professional services food and beverage and government sectors.
Manuel Chavez: And the 'twenty 'twenty four fourth quarter, we saw at the beginning of what will have a very positive impact on revenue growth from the conversion of class B downtown office space to residential apartment living.
Manuel Chavez: which is taking place in several of our markets. In Cincinnati, the mercantile building began leasing in the fourth quarter of 2024. We stand to benefit from this new demand for 24-7 parking access versus the 9 to 5 PM access associated with commercial parking. In the first two months of 2025, we have experienced a continued pickup and utilization at this location as more tenants move in, and there are at least a half a dozen similar projects underway in our markets, with planned completion dates between now and 2027. In fact, the largest apartment building in Cincinnati, 7 West 7, is scheduled to open in April and is connected to our 1 West 7.
Manuel Chavez: Which is taking place in several of our markets and Cincinnati. The mercantile built building began leasing in the fourth quarter of 2024 weeks.
Manuel Chavez: We stand to benefit from this new demand for 24, seven parking access versus the nine to five P. M access associated with commercial parking and.
Manuel Chavez: In the first two months of 2025, we are experience a continued pickup in utilization of dislocation as more tenants move in and there are at least a half a dozen similar projects underway in our markets with planned completion dates between now and 2027.
Manuel Chavez: In fact, the largest apartment building in Cincinnati 717 is scheduled to open in April and is connected to our 117 ASUR.
Manuel Chavez: Looking at the medium term, we are pleased to report that we see a path forward for one of our largest portfolio assets, the 1,273 space garage that we own in Detroit that is adjacent to the Renaissance Center, which has five and a half million square feet of office space and a 1,500 room hotel. This asset has been under considerable pressure since the pandemic when General Motors, which was the major tenant, and others permanently moved their employees at this location to other locations or converted them to a remote or This has been a huge headwind for us, but there is a light at the end of the tunnel.
Looking at the medium term we are pleased to report that we see a path forward for one of our largest portfolio of assets the 1273 space garage in.
Manuel Chavez: In Detroit that is adjacent to the Renaissance Center, which has five and a half million square feet of office space and a 1500 room hotel.
This asset has been under considerable pressure since the pandemic when general Motors, which was the major tenant and others permanently moved their employees.
Manuel Chavez: Location to other locations or converting them to a remote workforce.
Manuel Chavez: This has been a huge headwind for us, but there is a light at the end of the tunnel.
Manuel Chavez: and Large Real Estate Development Firm, together with General Motors, has formed a joint venture to redevelop the Renaissance Center. They will be converting one of the towers into apartments, renovating another tower into amenity-rich office space, building luxury condos, redoing the Marriott Hotel, and raising two existing towers and parking to make way for more cohesion to the riverfront with retail, civic, park, and entertainment venues. For context, this redevelopment will have a similar impact that the Hudson Yards development did on the west side of Manhattan. During the construction period, we will continue to be severely limited in our ability to maintain our net operating income at this location, although we do have a base of business at the location unrelated to the center.
Manuel Chavez: A large real estate development firm together with General Motors has formed a joint venture to redevelop the Renaissance Center.
Manuel Chavez: They will be converting one of the towers into apartments renovating another tower until amenity rich office space building luxury condos redoing, the Marriott hotel and raising two existing towers and parking to make way for more cohesion until the riverfront with retail Civic Park and entered.
Manuel Chavez: Venues.
Manuel Chavez: For context, this redevelopment will have a similar impact at the Hudson yards development.
Manuel Chavez: West side of Manhattan.
Manuel Chavez: During the construction period, we will continue to be severely limited in our ability to maintain our net operating income of dislocation. Although we do have a base of business after location unrelated to the center.
Manuel Chavez: However, once completed, which is scheduled for the 2028 to 2030 timeframe, we will have an asset that is worth multiples of today's value. We will have the only garage on the west side of the development that is connected to the center. And we project that this asset alone has the potential to drive as much as a 10 to 15 percent increase in our consolidated net operating income.
Manuel Chavez: However, once completed which is scheduled for the 2028 to 2030 timeframe. We will have an asset that is worth multiples of today's value.
Manuel Chavez: We will have the only garage on the west side of the development that is connected to the center and.
Manuel Chavez: We project that this asset alone has the potential to drive as much as a 10% to 15% increase in our consolidated net operating income.
Manuel Chavez: This is an excellent segue to discuss our portfolio strategy. In 2024, we sold three of our assets as part of our Portfolio Asset Rotation Strategy. We were able to sell them at significant multiples of their parking income. Two of the assets were sold to companies planning real estate developments at those locations. Approximately 50% of our portfolio consists of core assets that currently generate about 80% of our revenue and over 80% of our net operating income. This gives us a strong base from which to closely evaluate our non-core assets. Following a detailed analysis to determine the future demand drivers and the intrinsic underlying land value of these non-core assets, we have decided to accelerate our portfolio optimization program by launching a 36-month asset rotation strategy that really began in 2024.
Manuel Chavez: This is an excellent segue to discuss our portfolio strategy.
Manuel Chavez: And 'twenty 'twenty four we saw three of our assets as part of our portfolio asset rotation strategy.
Manuel Chavez: We were able to sell them at significant multiples of their parking income.
Manuel Chavez: Two of the assets were sold to companies planning real estate developments at those locations.
Manuel Chavez: Approximately 50% of our portfolio consists of core assets are currently generate about 80% of our revenue and over 80% of our net operating income.
Manuel Chavez: This gives us a strong base from which to closely evaluate our non core assets.
Manuel Chavez: Following a detailed analysis to determine the future demand drivers and the intrinsic underlying land value of these noncore assets, we have decided to accelerate our portfolio optimization program by launching a 36 month asset rotation strategy that really began in 2024.
Manuel Chavez: This will involve the divestiture of a group of non-core assets between now through 2027. We plan to use the proceeds to invest in additional parking assets, repopulating our portfolio with fewer but larger assets that have multiple demand drivers, higher net operating income opportunities, and clustered in markets we like. As you know, we have a substantial pipeline of potential acquisitions and our deep industry experience and relationships gives us access to deal flow that is not widely available. In other words, recasting our parking asset portfolio is definitely a sweet spot for this management. And we look forward to keeping analysts and investors apprised of our progress.
Manuel Chavez: This will involve the divestiture.
Manuel Chavez: Of the group of non core assets between now through 2027.
Manuel Chavez: We plan to use the proceeds to invest in additional parking assets repopulating, our portfolio with fewer but larger assets that have multiple demand drivers higher net operating income opportunities and clustered in markets we like.
As you know we have a substantial pipeline of potential acquisitions, and our deep industry experience and relationships gives us access to deal flow that is not widely available in other words recasting our parking assay portfolio is definitely a sweet spot for this management team.
Manuel Chavez: And we look forward to keeping the analysts and investors apprised of our progress.
Manuel Chavez: Of course, right now the most compelling opportunity in parking real estate is mobile infrastructure stock. Our shares are selling at a substantial discount to our net asset value of $7.25 per share. which is based on parking income and does not include the incremental value of our assets to strategic buyers planning new developments near our location. In 2024, we repurchased 420,000 shares in Mobile Infrastructure stock, demonstrating our confidence in the company's long-term outlook.
Manuel Chavez: Of course, right now the most compelling opportunity in parking real estate is mobile infrastructure stock.
Manuel Chavez: Our shares are selling at a substantial discount to our net asset value of $7 25 per share.
Manuel Chavez: Which is based on part D handgun and does not include the incremental value of our assets to strategic buyers planning new developments neuro locations.
Manuel Chavez: And 'twenty 'twenty four we repurchased 420000 shares in mobile infrastructure of stock demonstrating our confidence in the company's long term outlook.
Stephanie Hogue: I will now turn the call over to our president, Stephanie Hogue, for a financial review of 2024, a discussion of our recent refinancings, and further insight into the longer term opportunities we see on the horizon. Thank you, Manuel, and good morning, everyone. Today, I will provide additional color on our financial performance in the fourth quarter and full year of 2024, as well as review our guidance for 2025.
Manuel Chavez: I will now turn the call over to our President definitely hope for a financial review of 2020 for a discussion of our recent refinancings and further insight into the longer term opportunities we see on the horizon.
Speaker Change: Thank you Danielle and good morning, everyone. Today, I will provide additional color on our financial performance in the fourth quarter and full year of 2024 as well as review our guidance for 2025.
Stephanie Hogue: Before we begin, I would like to highlight some actions we took in 2024 to build shareholder value and strengthen our financial position. First, we took on an additional credit line to redeem preferred shares in cash rather than issue common shares, which we believe were being sold in the open market, pressuring our stock price. At the end of the year, our preferred share balance outstanding was $20.1 million, which compared favorably with the $39.5 million at the start of the year. Second, we caught up the accrued dividends on the preferred. In addition to this being the right move for a company with our cash flow, we believe this has also helped stem the flow of preferred shares being converted.
Speaker Change: Before we begin I would like to highlight some actions we took in 2020 for it to build shareholder value and strengthen our financial position.
Speaker Change: First we took on an additional credit line to redeem preferred shares in cash rather than issue common shares, which we believe were being sold in the open market pressuring our stock price at the end of the year, our preferred share balance outstanding was $21 million, which compared favorably with the $39 $5 million at the start of the year.
Speaker Change: Second we caught up the accrued dividends on the preferred in addition to this being the right thing for a company with our cash flow. We believe this has also helped to stem the flow of preferred shares being converted.
Stephanie Hogue: Third, we began a $10 million share repurchase program in September. As Manuel mentioned, by the end of 2024, we repurchased 420,000 shares. Share repurchases underscore our confidence in our long-term prospects and our conviction that our shares are significantly undervalued. Finally, we completed $87.5 million of refinancings in the fourth quarter via two new loans with maturities ranging from 2027 to 2034. With the completion of these refinancing substantially all of our secured 2024 and 2025 debt maturities have been extended. We continue to optimize our capital structure on an opportunistic basis.
Speaker Change: Third we began a $10 million share repurchase program in September as Matt you mentioned by the end of 'twenty 'twenty four right.
Speaker Change: We purchased 420000 shares.
Speaker Change: Share repurchases underscore our confidence in our long term prospects and our conviction that our shares are significantly undervalued.
Speaker Change: Finally, we completed 87 and a half million dollars of refinancings in the fourth quarter. If I had two new loans with maturities ranging from 2027 to 2034.
Speaker Change: With the completion of these refinancings substantially all of our secured 2024 and 2025 debt maturities have been extended.
Speaker Change: We continue to optimize our capital structure on an opportunistic basis.
Stephanie Hogue: Now let's discuss our fourth quarter results. Revenue of $9.2 million in the fourth quarter increased 16% from $7.9 million in the fourth quarter of 2023. We have converted 29 assets to management contracts, and this results in higher revenue, as we recognize revenue based on usage, rather than cash collections, which can be more episodic. As we have discussed in the past, we view accrual-based revenue recognition for management contracts as a reliable metric for investors to monitor our underlying business trends. We plan to convert additional locations in 2026 and 2027 as leases roll over. Revenue per available stall or revenue pass, a key metric we use in our portfolio, increased once again in the fourth quarter.
Speaker Change: Now, let's discuss our fourth quarter results revenue of nine $2 million in the fourth quarter increased 16% from $7 $9 million in the fourth quarter of 2023, we have already 29 assets to management contracts and this resulted in higher revenue as we recognize revenue based on usage rather than cash.
Speaker Change: Cash collections, which can be more episodic.
Speaker Change: As we have discussed in the past, we view accrual based revenue recognition for management contracts as a reliable metric for investors to monitor our underlying business trends, we plan to convert additional locations in 2026 and 2027 as leases roll over.
Speaker Change: Revenue per available stall or resin pass a key metric we use in our portfolio increased once again in the fourth quarter.
Stephanie Hogue: Same location revenue pass increased 1% from the prior year to $200.44. We believe that this metric reached an inflection point in the third quarter, and we continue to expect positive progress. As we convert additional locations to management contracts, ResPath provides investors a view of portfolio-level performance. Property operating expenses were $1.9 million compared to half a million dollars in last year's fourth quarter. The increase primarily resulted from the shift to management contracts and the related accounting treatment of recognizing asset-level expenses within our financial system. Property taxes were $1.7 million compared to $1.9 million last year. Net operating income, or NOI, was $5.5 million, up about 1% from last year's fourth quarter.
Speaker Change: Same location restaurants increased 1% from the prior year to $200.44 per stock. We believe that this metric reached an inflection point in the third quarter and we continue to expect positive progress as we convert additional locations to management contrast, restaurants provides investors a view on portfolio.
Speaker Change: Levels of performance.
Speaker Change: Property operating expenses were $1 $9 million compared to half a million dollars in last year's fourth quarter.
Speaker Change: The increase primarily resulted from the shift to management contracts and the related accounting treatment of recognizing asset level expenses within our financial statements.
Speaker Change: Property taxes were $1 $7 billion compared to one $9 million last year net operating income or NOI was $5 $5 million up about 1% from last year's fourth quarter.
Stephanie Hogue: NOI represented 60% of fourth quarter 2024 revenue, with the bulk of the growth derived from our managed locations, underscoring the benefit of the shift of the business model. General and administrative expenses of $1.2 million were down from $1.5 million in the prior year's fourth quarter. This excluded non-cash compensation of $1 million in the current year quarter compared with $2.4 million of non-cash comp in the prior year quarter. As we have discussed in the past, mobile infrastructure benefits from operating leverage and can grow without significant G&A increases, as our infrastructure can readily support a larger asset base.
Speaker Change: NOI represented 60% of fourth quarter 2020 for revenue with the bulk of the growth derived from our managed locations underscoring the benefit of the shift of the business model.
Speaker Change: General and administrative expenses of $1.2 million were down from $1 $5 million in the prior year's fourth quarter, that's excluding non cash compensation of $1 million in the current year quarter, compared with $2 4 million of noncash comp in the prior year quarter.
Speaker Change: As we have discussed in the past mobile infrastructure benefits from operating leverage and can grow without significant G&A increases as our infrastructure can readily support a larger asset base.
Stephanie Hogue: Adjusted EBITDA was $3.9 million, up 16% from $3.3 million in the prior year, and adjusted EBITDA margin was $42.3 million.
Speaker Change: Adjusted EBITDA was $3 $9 million up 16% from $3 $3 million in the prior year and adjusted EBITDA margin was 42, 3%.
Stephanie Hogue: Shifting to full-year results, revenue of $37 million increased 22.3% year-over-year, with NOI of $22.6 million, up 7.2% when compared to 2022. Adjusted EBITDA of $15.8 million, increased 6.9% year-over-year in 2020. Turning to our balance sheet at the end of 2024, Mobile Infrastructure had $15.8 million of cash and restricted cash on hand. We ended the year with total debt outstanding of $213.2 million compared with $192.9 million at the end of 2024.
Speaker Change: Shifting to full year results revenue of $37 million increased 22, 3% year over year with NOI of $22 $6 million up 7.2% when compared to 2023.
Speaker Change: Adjusted EBITDA of $15 $8 million increased six 9% year over year in 2024.
Speaker Change: Turning to our balance sheet at the end of 2020 for mobile infrastructure had $15 $8 million of cash and restricted cash on hand, we ended the year with total debt outstanding of $213 $2 million compared with $192 $9 million at the end of 2023.
Speaker Change: Yeah.
Stephanie Hogue: While we continue to improve our financial footing and operations, we also spend considerable time examining the parking market of the future to ensure that we are properly positioned to support the demands of tomorrow, such as autonomous vehicles. We have significant advantages as our parking assets are in central business districts where parking is increasingly constrained and access to parking options is essential for autonomous vehicles. We are examining the preparations needed to be certain our facilities easily accommodate autonomous vehicles at scale. We are investing in features like EV charging, clearly marked driving lanes, and gateless entry and exit systems so that autonomous vehicles can both test our facilities today and easily knife a gate within them in the future.
Speaker Change: While we continue to improve our financial footing and operations. We also spent considerable time examining the parking market of the future to ensure that we are properly positioned to support the demands of tomorrow, such as autonomous vehicles.
Speaker Change: We have significant advantages as our parking assets are in central business districts, where parking is increasingly constrained and access to parking options is essential for autonomous vehicles. We are examining the preparations needed to be certain of our facilities easily a comedy autonomous vehicles at scale.
Speaker Change: We are investing in features like EV charging clearly marks driving lanes and gateway entry and exit it systems. So that autonomous vehicles can those test our facilities today and easily nicely with them in the future, we see reliable navigable parking facilities as a crucial element of downtown mobility, and we are doing wont be candidates.
Stephanie Hogue: We see reliable, navigable parking facilities as a crucial element of downtown mobility. And we are doing what we can at this early stage to ensure that we are a best-in-breed provider and a partner of choice to provide overnight storage or areas for maintenance. We recognize that it is early stage for these businesses, but we also know that by taking the right steps, we can build and partner with AV users in the future.
Speaker Change: Early stage to ensure that we are a best in breed provider and a partner of choice to provide overnight storage or areas for maintenance. We recognize that it is early stage for these businesses, but we also know that by taking the right steps, we can build and partner with a b users in the future.
Stephanie Hogue: Turning to 2025, we believe secular growth drivers together with another year of strong execution will result in continued expansion of our net operating income and adjusted EBITDA in 2025. We are introducing initial 2025 guidance for revenue of $37 to $40 million. Net Operating Income or NOI for 2025 is expected to range from $23.5 million to $25 million, representing year-on-year growth of 7% at the mid-20s. Adjusted EBITDA is expected to be between $16.5 million and $18 million. This guidance does exclude the impact of any potential asset sales that Manuel referenced.
Speaker Change: Turning to 2025, we believe secular growth drivers together with another year of strong execution will result in continued expansion of our net operating income and adjusted EBITDA in 2025.
Speaker Change: We are introducing initial 2025 guidance for revenue of $37 million to $40 million net operating income or NOI for 2025 is expected to range from $23 $5 million to $25 million representing year on year growth of 7% at the midpoint.
Speaker Change: Adjusted EBITDA is expected to be between 16, and a half million dollars and $18 million. This guidance does exclude the impact of any potential asset sales that Daniel reference with that I will turn the call back over to Emmanuel.
Stephanie Hogue: With that, I will turn the call back over.
Manuel Chavez: Thank you, Stephanie. To sum up, we are pleased with the accomplishments of 2024 and are looking ahead to accelerated growth in 2025. Underpinning our expectations for 2025 are projections for further increases in contract parking revenue and a pickup in transient volumes after the dip we saw in 2024. We have already begun our plan to revamp the company's portfolio, which will result in monetizing several assets that have more value to stakeholders and developers than the parking income they provide.
Emmanuel: Thank you Stephanie.
Emmanuel: We are pleased with the accomplishments of 2024 and are looking ahead to accelerated growth in 2025.
Speaker Change: Underpinning our expectations for 2025, our projections for further increases in contract parking revenue.
Speaker Change: And they pick up in transient volumes after the dip we saw in 2024.
Speaker Change: We have already begun our planned to revamp the company's portfolio.
Speaker Change: Whoa result in monetizing several assets that have more value to stakeholders and developers and the parking income they provide.
Manuel Chavez: continue to work towards gaining more sponsorship amongst investors. In 2024, we provided additional financial metrics by which to measure our progress. such as net asset value and revenue per available stall. in September of last year, as Stephanie mentioned.
Speaker Change: We continue to work towards gaining more sponsorship amongst investors in 2024, we provided additional financial metrics by which to measure our progress such as net asset value and revenue per available store.
Speaker Change: In September of last year, as Stephanie mentioned, we.
Manuel Chavez: We announce several strategic actions to enhance shareholder value. including funding future preferred stock redemptions in cash rather than common stock to mitigate delusions. paying all accrued dividends to the preferred stockholders to date and commencing a stock repurchase plan. Since the beginning of 2025, we are pleased to report that two sell-side analysts have initiated coverage of mobile infrastructure with buy ratings. And we hope to have additional coverage in the near future. Our management team and board are committed to continuing to explore strategies to address the gap between our net asset value and our share price.
Speaker Change: We announced several strategic actions to enhance shareholder value.
Speaker Change: Including funding future preferred stock redemptions in cash rather than common stock to mitigate dilution.
Speaker Change: Paint all accrued dividend to the preferred stockholders to date.
Speaker Change: Commencing a stock repurchase plan.
Speaker Change: Since the beginning of 2025, we are pleased to report a two.
Speaker Change: Two sell side analysts have initiated coverage of mobile infrastructure with buy ratings and we hope to have additional coverage in the near future.
Speaker Change: Our management team and board are committed to continuing to explore strategies to address the gap between our net asset value in our share price.
Operator: Operator, now I would like to open the call to questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two.
Speaker Change: Operator.
Speaker Change: Now I would like to open the call to questions.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you're using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Operator: And at this time, we'll pause momentarily to assemble our roster.
John Masaka: And the first question will come from John Masaka with B. Reilly Securities. Please go ahead. Good morning. Good morning, John.
Speaker Change: And the first question will come from John Masako with B Riley's B Riley Securities. Please go ahead.
John Masako: Good morning.
Speaker Change: Good morning, John.
John Masaka: So maybe going to, you know, the property capital recycling plan, can you maybe talk about what kind of dispositions you're expecting over that 36-month period, like cadence and just overall volume, and is this something that you think You can repeat over time or is it something where it's really about optimizing the portfolio to be more focused on parking versus maybe some of the surface lots that are more development opportunities for buyers? Yeah, right now in our portfolio, we have some assets that are their highest and best use is parking relative to the parking income. We've got other assets where their highest and best use is to a stakeholder or to a developer.
John Masako: So maybe going to.
John Masako: The property capital recycling plan can you maybe talk about what kind of dispositions you're expecting over that 36 month periods like cadence and just overall volume in <unk> is this something that you think.
John Masako: You can repeat over time or is it something where it's really about optimizing the portfolio to be more focused on parking versus maybe some of the surface lots that are more redevelopment opportunities for buyers.
John Masako: Yeah.
John Masako: Right now in our portfolio, we have some assets that are at their highest and best use is parking relative to the parking income and we've got other assets, where their highest and best use is to a stakeholder or to a developer and so what we've done is we've done a detailed them.
Manuel Chavez: And so what we've done is we've done a detailed analysis of the portfolio to bifurcate the different strategies there. And so we've already begun discussions with stakeholders and developers in these different markets to identify who the best owner of these assets is. And what our goal is, is we're going to reposition the portfolio to be a very plain vanilla parking infrastructure portfolio whose value is derived from the durability and the consistency of its revenue growth over time. And so this is going to take some time to do because we want to do it in a disciplined way and truly identify the best owner of these assets.
John Masako: Dallas is a portfolio to bifurcate.
John Masako: The different strict strategies there.
John Masako: And so we've already begun.
John Masako: Discussions with stakeholders.
John Masako: And developers in these different markets to identify who the best the best owner of these assets.
John Masako: Is.
John Masako: And what our goal is as we're going to reposition the portfolio to be a very plain vanilla parking infrastructure portfolio, whose value is derived from the durability of the consistency of its revenue growth over time.
John Masako: And so this is going to take some time to do because we want to do it in a disciplined way and truly identify the best owner of these of these assets.
Manuel Chavez: But it is something that we will be repeating. and executing on throughout the next three years.
John Masako: But it is something that we will be repeating.
John Masako: And executing on throughout the next three years.
John Masaka: I guess, what's the likelihood of significant transaction volume in the current calendar year, if you will? So in 2025, it is our objective to be under contract for about a third of these non-core assets by the end of the year.
Speaker Change: I guess, what's the likelihood of a significant transaction volume in the current calendar year.
John Masako: Yeah. So in 2025 that is our objective to be under contract.
John Masako: For about a third of these noncore assets by the end of the year.
Stephanie Hogue: You know, what are kind of the plans around the line of credit, you know, particularly as it pertains to refinancing, just given where interest rates have kind of moved in the last couple of weeks? Yeah, it's definitely something that's on our mind, as you know, you know, just sort of taking a step back, John, when we put that in place. Really, the thought was, you know, where the share price was and the conversions putting continued downward pressure, it was a more creative place to be to have that line of credit in place. So, you know, evaluating a number of options, kind of a larger kind of continued look at the balance sheet, as well as kind of a smaller transaction that just addresses the line of So, working through those things now have been since the fourth quarter and expect to have more information to share next quarter for sure.
John Masako: Yeah, what are kind of the plans around the line of credits and particularly as it pertains to refinancing just given where interest rates have kind of moved in the last couple of weeks.
John Masako: Yeah, It's it's definitely something that's on our mind as you know I'm, just sort of taking a step back John when we put that in place.
John Masako: It really be the thought was you know where the share price was and the conversions putting continued downward pressure. It was a more accretive place to be to have that line of credit in place. So you know is evaluating a number of options kind of a larger kind of continued look at the balance sheet as well as kind of a <unk>.
John Masako: Mahler transaction that just addresses the line of credit so working through those things now have been since the fourth quarter and expect to have more information to share them next quarter for sure.
John Masako: Okay.
Manuel Chavez: And then last one, anything related to the Detroit property you called out in the call that would impact 2025 guidance or is that all the disruption? I mean, obviously the upside is later on, but it would the disruption be something that's a 2026, 2027 event. We've got the disruption and the stress on the parking income baked into our guidance for 2025 in the Detroit property. Throughout 26 and 27, we'll have to see how they phase out redevelopment of that. There will naturally be an opportunity for construction and vendor parking throughout the redevelopment process. But you're exactly right, the true upside for this, and it is a huge impact, it could be 10% to 15% impact on our consolidated NOI just from this one asset alone, is really at the culmination of the redevelopment.
John Masako: And then last one anything related to the Detroit property, you called out in the call that would impact 2025 guidance or is that all.
John Masako: Is it disruption I mean, obviously the upside if later on but with the disruption would be something that's a 'twenty 'twenty six 'twenty seven event.
John Masako: We've got the the disruption in the the the stress on the parking income baked into our guidance for 2025 and in the Detroit.
John Masako: Property throughout 'twenty six 'twenty seven.
John Masako: We'll have to see how they how they phase out redevelopment of that.
John Masako: There will naturally be an opportunity for construction.
John Masako: And then their parking throughout the redevelopment process, but youre exactly right. The true outside for this in it and it has a huge impact if you'd be 10% to 15% impact on our consolidated NOI just from this one asset alone.
John Masako: It is really at the.
John Masako: The culmination of the redevelopment.
John Masaka: Okay, that's it for me. I'll hop back in the queue. Thanks, John. Again, if you have a question, please press star, then 1.
John Masako: Okay.
John Masako: That's it for me I'll hop back in the queue.
John Masako: Thanks, John.
Speaker Change: Again, if you have a question. Please press Star then one our next question will come from Marc Riddick with Sidoti. Please go ahead.
Mark Riddick: Our next question will come from Mark Riddick with Sidoti. Please go ahead. Hey good morning. Good morning, Mark.
Marc Riddick: Hey, good morning.
Speaker Change: Good morning, Mark.
Mark Riddick: So I was wondering if you could talk a little bit about some of the puts and takes that are built into the full-year guide on the revenue range. And in particular, I was sort of thinking about, just from, you talked about the ongoing general economic challenges, but I was wondering if you'd talk a little bit about maybe your demand expectations, and then I have a follow-up. Yeah, absolutely. I'll kick it off. Manuel, jump in. I mean, our focus, as Manuel referenced in his remarks, is continued focus on contract leasing in the in the core portfolio.
Speaker Change: So I was wondering if you could talk a little bit about some of the puts and takes that.
Speaker Change: That are built into the full year guide.
Speaker Change: The revenue range and in particular I was sort of thinking about just from a you talked about the ongoing general economic challenges, but I was wondering if you can talk a little bit about maybe your your demand expectations and then I have a follow up on that.
Speaker Change: Yeah, absolutely I'll kick it off maybe I'll jump in I mean, our focus as an annual referenced in his remarks is continued focus on contract leasing in the and our core portfolio.
Stephanie Hogue: We've really been focusing on that for, you know, a year honing in on the identified opportunities and diversifying out the demand drivers. So, you know, not just the return to office trends, but the new hospitality, new residential coming online and really kind of getting ahead of that. So, I think, you know, as we look at 2025, a lot of the impact of growth is on utilization and we'll continue to kind of make impact where we can. Yeah, I think that's right. We've got accelerated growth in our contract parking, that's for both commercial and residential. We have decelerated the attrition, which has really been the headwind for us over the past several years.
Speaker Change: We've really been focusing on that for you know a year honing in on the identified opportunities and diversifying out the demand drivers. So you know not just the return to office trends, but the new hospitality new.
Speaker Change: Residential coming online and really kind of getting ahead of that so I think you know as we look at 2025, a lot of the impact of growth is on is on utilization.
Speaker Change: And we'll continue to kind of make impacts where we can.
Speaker Change: I think I don't think that's right we've got.
Speaker Change: We've got accelerated growth in our contract parking that's for both commercial and residential we are we have decelerated.
Speaker Change: The attrition, which has really been really been a headwind for us over the past several years.
Manuel Chavez: And then we've got a slight uptick in transient volume.
Speaker Change: And then we've got a slight slight uptick in transient volumes.
Speaker Change: Yeah.
Stephanie Hogue: Okay, great. And then is there sort of a... a revenue mix component that we should be thinking about, whether that's from the transient mix type of thing, or is there a pricing dynamic that you have in mind this year that you view as achievable? Yeah, I mean we're really excited about the demand mix. We've talked about it in prior quarters, but this shift to residential and Tier 2 CBD cores is a new product offering, and it is a 24-7 reserved product offering, which comes at a rate that has not historically been seen. So that is what we're most excited about as we think about 25, 26, and 27.
Speaker Change: Okay, Great and then is there sort of a.
Speaker Change: Our revenue mix component that we should be thinking about whether that's.
Speaker Change: From the the transient mix type of thing or is there a pricing dynamic that you that you have in mind this year that.
Speaker Change: Do you view as achievable.
Speaker Change: Yeah, I mean, we're really excited about the demand and mix them, we've talked about it in prior quarters, but this shift to residential and tier twos CBD course is a new product offering.
Speaker Change: And it is at 24, seven reserve product offering which comes at a rate that has not historically been seen that I that is what we're most excited about as we think about 'twenty five 'twenty six 'twenty seven mm yeah, and there was an impact of those two demands see my point, but also to pricing and new products coming online.
Stephanie Hogue: And there's an impact both to demand, to my point, but also to pricing and a new product coming online.
Stephanie Hogue: Okay, great. And then it was interesting that given the calendar shift that we've heard from so many folks about the fourth quarter, that RevPass was actually up a bit in the fourth quarter year over year. And there does, obviously, there's some seasonality there, right? But if we're just looking at the fourth quarter, so RevPass was up year over year. Can you talk about maybe a couple of the contributors that led to that? Because it seems as though the I'm not sure if the calendar was necessarily as favorable as it could have been.
Speaker Change: Okay, Great and then it was interesting that that.
Speaker Change: Given the the calendar shifts that we've heard from so many folks about the fourth quarter that Rep pass was actually up a bit in the fourth quarter year over year and there does obviously, there's some seasonality there right.
Speaker Change: But if you're just looking at the fourth quarter yourself.
Speaker Change: <unk> was up year over year can you talk about maybe a couple of contributors that led to that because it seems as though the calendar and I'm not sure if the calendar was necessarily.
Speaker Change: Favorable is it good or bad [laughter] right now so we saw.
Manuel Chavez: Bryan Maher, Casey Kotary, Manuel Chavez, Stephanie Hogue, Mobile Infrastructure Right. So we saw a flattening off and really an elimination on the attrition rate. And so we started to get some of those gains. We actually started to experience them in our net numbers. And then we went through some targeted rate increases in November and December of that quarter.
Speaker Change: We saw a flattening off and really and elimination on the on the attrition rate and so we started to get some of those gains. We we actually started to experience them in our net and our net numbers and then we went through some targeted rate increases and November and December of that quarter.
Mark Riddick: Okay, great. Thank you very much. Thank you.
Speaker Change: Okay, great. Thank you very much.
Speaker Change: Thanks.
Kevin Stanicki: The next question will come from Kevin Stanicki with Barrington Research. Please go ahead. Thanks and good morning. Thanks for taking my question.
Speaker Change: The next question will come from Kevin <unk> with Barrington Research. Please go ahead.
Speaker Change: Thanks, and good morning.
Speaker Change: Thanks for taking my question so.
Speaker Change: You talked obviously about accelerating your portfolio optimization efforts and.
Manuel Chavez: Just wondering if you thought about how meaningful proceeds from some of those divestitures could be in terms of reapplying some of that to your acquisition portfolio and how meaningful a benefit that could be to getting some deals done. Yeah, we estimate proceeds from these sales could be north of $100 million. Keep in mind, last year, in 2024, we began this asset rotation strategy, and we sold three assets for approximately $8 million, and it has less than a combined $50,000 impact on our NOI. Now, moving forward, as we're looking at how we're looking to redeploy those assets, we'll be looking at fewer and larger parking assets.
Speaker Change: Just wondering if you thought about how meaningful proceeds from.
Speaker Change: Some of those divestitures could be in terms of you know reapplying some of that to your acquisition portfolio.
Speaker Change: And.
Speaker Change: You know how meaningful a benefit that could be to getting some deals done.
Speaker Change: Yeah, we.
Speaker Change: We estimate.
Speaker Change: Proceeds from these sales could be north of $100 million.
Speaker Change: Keep in mind last year in 2024, we began this asset rotation.
Speaker Change: Strategy, and we sold three assets for approximately $8 million.
Speaker Change: And it has less than a combined 50000 dollar impact.
Speaker Change: Our NOI.
Speaker Change: Yeah.
Speaker Change: Now moving forward as we're looking at how we're how we're looking to redeploy those assets, we will be looking at fewer fewer and larger parking assets. We're looking to develop a critical mass in the markets that we move into our the markets that we're currently and that we wanted to expand.
Kevin Stanicki: We're looking to develop a critical mass, and the markets that we move into are the markets that we're currently in that we want to expand. We want to be surrounded on the adjacent blocks by several different demand drivers. And we want to cluster those assets into sub-markets and even micro-markets that can give us some pricing advantages. But, you know, as I mentioned in our prepared marks right now, the best deal out there is mobile infrastructure stocks as far as parking asset play. All right. Well, I appreciate you taking the question. I'll turn it back over.
Speaker Change: We wanna be surrounded on the adjacent blocks by several different demand drivers.
Speaker Change: And we want to cluster those those assets into submarkets and even micro markets that can give us some pricing advantages but.
Speaker Change: But you know as I mentioned in our prepared remarks right now the best deal out there is mobile infrastructure socs.
Speaker Change: As far as parking ASUR claim.
Okay.
Speaker Change: Alright, well I appreciate you taking the question I'll turn it back over.
Kevin Stanicki: Thank you. Thanks, Kevin.
Speaker Change: Thank you thanks, Kevin.
John Masaka: The next question is a follow-up from John Moussaka with B. Reilly Securities. Please go ahead.
Speaker Change: The next question is a follow up from John Masako with B Riley Securities. Please go ahead.
Stephanie Hogue: Hey, John. Thank you. Perhaps you're muted, Mr. Misaka. Apologies, I was muted there. Just a quick one for me. What's the RevPath growth assumption that's based into guidance, roughly? So... So most of the Red Pass growth is coming from utilization and expected utilization growth as opposed to rate growth for the year. Okay. All right. And Amy, are you expecting it to kind of be, you know, single-digit growth, kind of similar to what you're seeing on the NOI and... Yeah, it'll be in line with revenue growth, John. That's it for me. Thank you very much.
John Masako: Hey, John.
Speaker Change: Perhaps you're muted Mr Masako.
John Masako: Apologies I was muted there just a quick one for me what's the Rev. Paas assumption growth assumption, that's baked into guidance roughly.
Speaker Change: So.
Speaker Change: Got it.
Speaker Change: So most of most of the Red pass growth is coming from utilization.
Speaker Change: And I expected utilization growth as opposed to two rate growth for the year.
Speaker Change: Okay.
Speaker Change: And then just any are you expecting it to kind of be you know single digit growth kind of similar to what you're seeing on the NOI and <unk>.
Speaker Change: EBITDA right or.
Speaker Change: Yeah, it'll be in line with revenue growth John.
Speaker Change: Okay.
Speaker Change: That'd be great. Thank you very much.
Speaker Change: Alright. Thanks.
Operator: This concludes our question and answer session.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. Manual Chavez for any closing remarks. Please go ahead Sir.
Manuel Chavez: I would like to turn the conference back over to Mr. Manuel Chavez for any closing remarks. Please go ahead, sir. Thank you all for your time this morning and tuning in. We look forward to updating the market on our progress next quarter. Thank you.
Manuel Chavez: Thank you all for your time this morning, and tuning in and we look forward to updating the market on our progress next quarter.
Speaker Change: Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].