Latest news with #ManuelChavez
Yahoo
14-05-2025
- Business
- Yahoo
Q1 2025 Mobile Infrastructure Corp Earnings Call
Casey Kotary; Investor Relations; Mobile Infrastructure Corp Manuel Chavez; Chairman of the Board, Chief Executive Officer; Mobile Infrastructure Corp Stephanie Hogue; President, Secretary, Treasurer & Director; Mobile Infrastructure Corp John Massocca; Analyst; B. Riley Securities, Inc. Kevin Steinke; Analyst; Barrington Research Associates, Inc. Operator Good day, and welcome to the Mobile Infrastructure Corporation first quarter 2025 earnings conference call. (Operator Instructions) This event is being recorded. I would now like to turn the conference over to Casey Kotary, Investor Relations representative. Please go ahead. Casey Kotary Thank you, operator. Good morning, everyone, and thank you for joining us to review Mobile's first quarter 2025 performance. With us today from mobile are Manuel Chavez, CEO; and Stephanie Hogue, President. In a moment, we will hear management's statements about the company's results of operations as of the first quarter of 2025. 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 and 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. 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. Mobile's earnings release and the most recent quarterly report on 10-Q provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of reasons why mobile uses these measures. I will now turn the call over to Mobile's CEO, Manuel Chavez, to discuss first quarter 2025 performance. Manuel? Manuel Chavez Thank you, Casey, and thank you all for participating in today's call to review our first quarter results and discuss our business outlook. To start off, underlying operating metrics moved in the right direction and the strategic pillars we detailed in March are firmly on track. That said, seasonal headwinds and some other factors muted top line growth in Q1. Our infrastructure and consumer lens, combined with improved data is guiding disciplined capital deployment in positioning mobile infrastructure for value creation. Before we get into the details, I'd like to reground you on the long-term journey that guides our actions. When we spoke in early March barely 7 weeks ago, we set out a multiyear, multipronged strategy consisting of 2 primary focus areas. Our first focus area, as expected, is to continue to convert the balance of our core portfolio into management agreements, driving increased utilization via increasing our monthly residential and commercial contracts. The second focus area is our portfolio optimization strategy in which we aim to rotate out certain parking assets that have greater value for alternative stakeholders than they do as long-term assets in our portfolio. Into new assets that more closely align with the key characteristics of our core portfolio, ultimately, maximizing value for our mobile shareholders. As a reminder, our core portfolio is defined as parking structures that are near multiple demand drivers and likely clustered close to assets that are already in our portfolio. We believe rotating the noncore segment of mobile's portfolio can generate at least $100 million of proceeds that can be used to reinvest into our robust acquisition pipeline. Second, our team is a meaningful opportunity to further leverage data and enhance processes and use rigorous management of our coal portfolio to increase asset utilization and grow NOI. Because specialized parking properties do not change hands quickly, this takes time and today's remarks are meant to be a progress report on initiatives whose most visible milestones will surface over the coming quarters. Mobile infrastructure's garages occupy a distinctive niche. They are hard infrastructure, essential nodes in the flow of urban mobility, yet also behave like consumer microcosms their performance rising and following the daily human patterns. That dual nature shape the quarter story. The first quarter is our lightest season, and this year was no different. Adding to the typical seasonality, weather proved harsher than usual. Construction disrupted several Central Business District corridors and in Cincinnati, 1 of our largest markets, the convention center closed for renovation, creating less demand in our transient and overnight hotel traffic. Even so, the team delivered a solid opening 90 days of 2025. Business development outreach secured more than 250 net new monthly contracts and lifted contract volume sequentially and essentially flat pricing. Our pipeline for new monthly business continues to grow, evidence that our go-to-market discipline is taking hold. These transactions declined versus the prior year quarter, but average transient rate grows demonstrating low to protect price even when volume is softer. We also saw encouraging early signs from a wave of downtown residential conversions. For example, the mercantile and the newly opened One West 7 apartments in Cincinnati are seeing success in leasing even through the first quarter, a time when people are less likely to move. We are seeing some demand for parking from these new lessees higher use of virtually converts to plan, we will remain patient with our pricing lever until that threshold is reached. 29 of our 40 garages are now annex by the end of calendar year 2025, we will have transitioned 75% of our portfolio to run under management contracts with the balance scheduled for conversion in 2026 and in 2027. Management contracts allow for full rate autonomy structures in crucially granular data on utilization, parker mix and rate elasticity. That data allows us to fine-tune decisions with a precision unavailable previously. Building a data-driven decision process has taken time, and we believe the effects will become more obvious later this year and into 2026. Portfolio optimization remains an important pillar of our strategy. Last year's sale of 3 assets at attractive multiples confirm the latent value of our real estate holdings. These 3 assets were sold at a sub 2% capitalization rate on NOI, which is a function of our assets often playing a critical role in the real estate development plans of alternative stakeholders. Building on that success, we have launched a 36 addition program targeting $100 million of noncore properties whose value will be derived from the underlying land or equally as importantly, the buyer who would like to control the parking experience for their customers or employees. Certainly, the location supported by multiple demand drivers and higher net operating income potential in markets where we already hold scale advantages. We are working towards roughly 1/3 of those assets to be under active negotiations or in contract by year-end, and we are preparing the balance sheet accordingly. Over the past quarter, the term debt, full asset debt and single asset level facilities to ensure we can close sales swiftly and reallocate the capital in a manner that is accretive to shareholders. Looking beyond the traditional parking income, we are layering complementary revenue streams into the portfolio. Revenue sharing negotiations are in late stages for electric vehicle charging at several garages as is the longer-term vehicle storage and assets that have greater availability throughout the year, and exploratory discussions with autonomous vehicle operators continue positioning our central to located assets as future fleet hubs. Each initiative is intended to add durable cash flow and enhance asset value. We look forward to sharing more details on those initiatives in coming quarters. Again, in short, seasonal headwinds muted top line growth, yet the underlying operating metrics moved in the right direction, strategic pillars we detailed in March are firmly on track. Our infrastructure plus consumer wins, combined with ever richer data is guiding disciplined capital deployment and positioning mobile infrastructure for sustained value creation. Thank you for your time and continued support. I will now turn the call over to our President, Stephanie Hogue, who will elaborate on our financial performance for the quarter. Stephanie? Stephanie Hogue Good morning, everyone, and thank you, Emmanuel. My remarks today will move through 3 interconnected topics: our balance sheet efforts, the financial performance of our assets and importantly, our path forward. Starting with our balance sheet. As you recall, last September, we put a $40 million credit facility in place to give holders of our preferred stock, a cash option rather than converting into common shares and immediately selling in the open market, which not only would have resulted in substantial dilution but also created a downward pressure on a similarly traded stock. In addition, and as importantly, we reinstated the dividend to those shareholders, which was a core reason that they made the investment in the first place. That facility is doing its job. During the first quarter, we redeemed just $1.2 million of preferred, which is the lowest quarter of redemptions or conversion since early 2024. The preferred outstanding now sits at $19 million, down from $39.5 million at the start of last year. At the same time, we continue to repurchase common shares. We have repurchased approximately 82,000 shares this quarter at an average price of $3.23. Our internal NAV remains $7.25 per share which does not assess for their operational value or replacement value premiums. Considering material discount of Mobile stock price relative to NAV, we intend to continue taking potential dilution off the table by settling preferred redemptions with cash and buying back our stock in the open market. This dovetails into our financing strategy. After refinancing $87.5 million of secured debt late last year, we are now working through our debt maturities through 2027 and evaluating alternative structures that offer flexibility around our capital rotation strategy of noncore assets. Traditional CMBS is restricted with asset sales, redeployment of capital and operating changes like leases to management contracts. As a result, we've had continued focus on enhancing our balance sheet as an important value driver longer term, and it will allow us to continue to execute on our strategy. With that backdrop in place, let's turn to what's happening inside the assets themselves. The shift to management contracts is paying dividends. Today, most of our revenue is recorded on an accrual basis, giving us a clear view of operating performance. Once we strip out performance from Detroit, which I will discuss shortly, the Global stall increased 1% year-over-year in the first quarter. Because an empty space can never be resold, our first priority is increasing utilization once this metric meets satisfactory thresholds, we will look to optimize price. Better data is also reshaping our revenue mix. monthly or contract parking currently represents more than 35% of management contract parking revenue, providing stickier cash flow and smoothing the seasonality inherent in transient demand. The accounting noise that once clouded period-to-period comparisons is largely behind us, and we can now measure performance on a truly apples-to-apples basis. Underpinning this progress is the improvement in parking technology, allowing us to make data-informed decisions. License plate recognition, data aggregation and other tools are giving us granular insights into consumer behavior. Peaks and values and utilization have the ability to charge consumers according to their usage needs and pricing sensitivities that may not have been obvious with older technologies. We continuously evaluate our third-party operators on a simple metric, who can deliver accurate, actionable data, the fastest so we can adjust accordingly. Looking ahead, our road map is clear. First and foremost, we intend to continue to reposition our balance sheet through a more flexible debt facility that supports our noncore asset rotation and reduces refinancing risk. We will maintain rigorous capital allocation discipline balancing share repurchases against investing in assets or revenue-generating upgrades to our current facilities, and we will evaluate data faster when our operators to make more informed decisions to drive increased utilization. Now let's move on to our first quarter results. Financial results for the first quarter still have some element of lease conversion to management contract noise within the results. As the percent rent leases recognized revenue on an as-collected cash basis, first quarter revenue of 2024 had a $600,000 benefit for activity occurring in the fourth quarter of 2023. Revenue of $8.2 million in the first quarter was stable compared to 2024 operating revenue when adjusting for this accounting change. That said, on a GAAP basis, revenue decreased 6.7% from $8.8 million in the first quarter of 2024. Revenue per available stall or RevPas, a key metric we use to manage our portfolio was down modestly in the first quarter. However, we have provided an adjusted RevPas that excludes our Detroit location to give our view of our business progress. Detroit is 1 of our larger assets, and we spoke previously about the headwinds of this asset faces. But also of the longer-term opportunities, we believe the redevelopment in Detroit creates. As (inaudible), including it in RevPas skews their year-over-year comparisons for the remainder of the portfolio. Excluding Detroit, same location was $184 per stall as compared to $183 per stall in the prior year, driven by modestly higher overall utilization stronger transient and residential pricing rates and an increase in corporate monthly parking. As we convert more assets to management contracts and a larger portion of our portfolio is included in (inaudible) our RevPas metric will become an increasingly valuable measure of our performance, offering a more clear and comprehensive of our business. That said, as a reminder, our first quarter typically sees flow and we experienced several quarter specific impacts that further performance, namely significant weather in the Midwest, temporary road closures and the temporary closure of Cincinnati's Convention Center for a $240 million upgrade. Property operating expenses were $1.9 million to $1.5 million in last year's first quarter. The increase primarily resulted from the shift to management contracts and the related accounting treatment of recognizing asset level expenses within our financial statements. Properties had $1.9 million approximately compared to last year. Net operating income, or NOI, was $4.5 million, down 17% from last first quarter. Last year's NOI included the previously mentioned $600,000 of revenue that essentially dropped entirely to the bottom line. General and administrative expenses of $1.3 million were slightly up from $1.2 million in the prior year's first quarter. This excluded noncash compensation of $700,000 in the current year quarter compared with $1.8 million of noncash comp in the prior year quarter. We continue to believe that the portfolio can scale significantly while corporate G&A can be held roughly flat. Adjusted EBITDA was $2.7 million, down about 21% from $3.5 million in the prior year, and adjusted EBITDA margin was 33.4%, It is worth noting here too that the $600,000 of prior period revenue increased profitability by a similar amount, explaining much of the year-to-date change. Turning to our balance sheet, at the end of the first quarter, Mobile Infrastructure had $16 million of cash and restricted cash on hand. We ended the quarter with total debt outstanding of $214 million compared with $213 million at the end of 2024. While our first quarter is always seasonally slow, we remain confident in our annual plan and are maintaining our 2025 guidance for revenue of $37 million to $40 million, Net operating income, or NOI, for 2025 is still expected to range from $23.5 billion to $1 trillion, representing a year-on-year growth of 7% at the midpoint. We expect adjusted EBITDA to be between $16.5 million and $18 million. To close the heavy 2024 contract conversions refinancing groundwork capital structure redesign is translating into more consistent revenue approval, so per operating insights and I believe a stronger growth. We have more work ahead, but the trajectory is positive and unmistakable. Thank you for your continued support of mobile infrastructure. And with that, I will turn the call to the operator to open the line for questions. Operator We will now begin the question-and-answer session. (Operator Instructions) John Massocca, B. Riley. John Massocca Good morning. Just focusing in on some of the, headwinds in 125, obviously weather probably shouldn't be a factor, at least in 2 and 3Q as much, but, things around, for instance, the convention center remodel in Cincinnati or maybe the other kind of construction things that were called out. I mean, could those have longer tails? Could that be kind of affecting the rest of the year here? Manuel Chavez The convention center redevelopment in Cincinnati, actually the completion time frame was moved up and as of late, they're they're expecting opening of that in December of this year or January of next year. We also had some street closures associated with exterior facade. In some apartment building redevelopments which are coming to completion as well. John Massocca Okay, and anything else on the operating expense side in the quarter that was either one time or maybe more permanent. I thought I remember in the press release something around security was kind of called out just just curious if there's any how we should kind of think about that op X number going forward. Stephanie Hogue Yeah, security definitely has been an expense that we're seeing through the portfolio. There was an element of expense though in in this quarter that was moved forward, so it was planned R&M for the year, that just came up either timing or it was the right opportunity to do it, so we expect that that is online with guidance through the year. John Massocca Okay, and then, the Renaissance Center in Detroit, splitting it out from rev pass, is that kind of indication that that that asset maybe is potentially going to be a drag. On kind of the overall portfolio, in a near to intermediate term, just given some of the secular things going on with that specific asset or just kind of curious what the outlook for that specific asset is just giving you split it out from the rest of the. Portfolio. Manuel Chavez Yeah, Detroit's one of our biggest markets and that asset is, premier riverfront location, but connected directly to the Renaissance Center. And so what's happened is that asset is moved from a revenue perspective, it's moved to a trough much more quickly than we than we anticipated. Which is disappointing on one hand, but on the other hand, it says that the sort of movement of current tenants in the Renaissance Center is happening more quickly, meaning they're moving out, which should make way for the redevelopment. The downward pressure on our overall performance, once this asset does truly hit the trough, that downward pressure will lessen up. But we wouldn't anticipate any type of real growth there outside of some potential construction work being, construction worker parking. Outside of that, we wouldn't anticipate any real growth until, The redevelopment is completed there. John Massocca Is there a rough time frame for when you would expect that asset to kind of rough or maybe or we we already gotten there? Manuel Chavez I think we're getting pretty close. John Massocca And then you called out debt a little bit. Looking for maybe alternative sources of kind of debt capital they're more conducive to your operating model. I mean, can you provide a little more color on on the conversations you're having today and maybe kind of. A rough timeline for when we might expect something on the. Refinancing to that extent. Stephanie Hogue Yeah, John, most of our maturities are 26 and 27, so we're moving a little bit faster from a refinancing perspective, than we would otherwise. One of the challenges is you look at our debt, portfolio is you have a lot of CMBS portfolios that were done kind of prior to, 2020. And they're restrictive in what and when we can sell assets as you know the the noncore asset piece of our strategy is is really important so we'll have more to come later this year we've been working on it as you know markets are somewhat volatile so working to really find the right answer for the company long term that allows us to execute quickly on sales as they come. But also, recycle that capital into assets that look more like the core portfolio, so I would say later this year we'll have more detail, but working on it to give us really a lot of flexibility within the portfolio. John Massocca Okay, that's it for me. Thank you very much. Thanks. Operator Again, if you have a question, please press star then one. Your next question comes from Kevin Steiny with Barrington Research. Please go ahead. Kevin Steinke Hey thanks good morning just wanted to start out by asking about the improved contract parking demand trends you're seeing. And maybe how sustainable that is and then you also mentioned initially some pricing sensitivity. Around monthly commercial parking, although you mentioned that could. Kind of go away as as the utilization bills so maybe just kind of the timeline of how that typically works in terms of maybe when pricing s sensitivity lessons in response to higher utilization. Stephanie Hogue Yeah, that's a great question. I would say it's sort of a tale of two stories, transient, as we're seeing, continued activity in downtown so it was. Certainly slower than we expected in the first quarter rates held, so people that are coming downtown for, whether it's dinner events, why they're moving around the city, there's not a lot of pricing sensitivity, but you're right, it is absolutely in kind of the return to office trend, right now there's a surplus in downtown parking. Because people have by and large not been working Monday through Friday in offices in city courts, so as that trend is shifting, we're getting a lot more inbounds as opposed to just outbounds of us calling, we're seeing our operators are reporting that they're getting more inbounds from people looking for large blocks of parking. As that continues and garages fill up, we will see that pricing power shift towards towards the company. Kevin Steinke Okay, thanks. And then. You mentioned some momentum on the ancillary revenue initiatives specifically calling out revenue sharing for EVs sound like maybe some. Revenue generation coming from that later in the year perhaps, could you talk about that more and how widespread that is in terms of, across your asset portfolio. Absolutely. Stephanie Hogue We have EV in several of our garages. I would say. Performance and utilization takes time to build. Customers need to know that it's there, that it is available, so it's not that you put an EV charger in and automatically it's a 100% utilization. We're really focusing on garages that have that residential demand elements because those are people that don't have an alternative place necessarily to charge. They can't drive home and plug it in at their house, so EV charging will become more important. But it is one of those things that just takes, probably several quarters before you really have insight in terms of utilization and that's subject to people knowing it's there that they're using it consistently, and it's, priced accordingly. Kevin Steinke Okay, understood, thanks for taking the questions. Operator Thanks for the questions. This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Los Angeles Times
21-02-2025
- Business
- Los Angeles Times
Costa Mesa's Measure K promised a public process for rezoning. Will it deliver?
Costa Mesa officials this week approved a nearly $2-million contract with a planning and engineering firm to chart a course toward rezoning numerous commercial, industrial and opportunity sites throughout the city to allow for more housing. Rezoning is a key element in delivering on a promise made in the city's Measure K, a 2022 initiative that overrides an earlier referendum requiring certain large-scale developments or zone changes be put to a vote of the people. It's also necessary for Costa Mesa to certify its compliance with a state mandate requiring the city plan for the creation of 11,760 new residential units by 2029. Like Measure K, the roadmap outlining how that will be done — the housing element portion of the city's general plan — came due in 2022. Revising the city's zoning codes and regulations is a daunting process estimated to take up to two years to complete. Yet, staffing shortages at City Hall, particularly in the city's planning department, have created major delays. Now, two years past the deadline and with the threat of punishment from the state looming, including allowing builders with state-compliant projects the right to bypass local laws, city leaders are in a race against time. 'There's a reason why we have to move swiftly on this,' Mayor Pro Tem Manuel Chavez said in a City Council meeting Tuesday. 'If we want to have a say in Costa Mesa about the kind of housing we build in the city, we have to take ownership of the fact that the longer we delay implementing this, the longer the risk comes into play.' Council members Tuesday unanimously approved a three-year, $1,850,611 professional services agreement with San Diego County-based firm Dudek to oversee the rezoning process. The contract includes an additional 10% contingency and may be extended up to two, one-year terms. Dudek planner Catherine Tang Saez assured the council her firm would help the city work swiftly and efficiently to meet its goals. The firm aims to prepare the housing element for final certification by November 2026. 'The sites have been selected, the densities have been set. There's been an obligation made to the state, and our job as consultants is to help the city, to take you to the finish line,' she said. But residents speaking in public comments urged the city not to run roughshod over the interests of community stakeholders in their haste to rezone the city, particularly when Measure K itself promised a public visioning process would take place. Some expressed their desire for a citizens advisory committee that would inform consultants and city staff of residents' wishes for certain streets and neighborhoods. 'Task force, task force, task force — this is so necessary to build community consensus on this major rezoning of the city,' said resident Richard Huffman. 'We've delayed so long on getting around to doing any visioning and working on this rezoning that now there's no time for it. This is just shameful.' Mayor John Stephens expressed a concern there was no formal mention of how Dudek and city staff would engage community members in the rezoning process. 'It seems like somebody could criticize us and say we've skipped that visioning process that was part of Measure K,' he said. Carrie Tai, the city's economic and development services director, explained the visioning process was baked into Dudek's proposal and promised the public would have multiple opportunities to weigh in throughout the two-year process. 'This absolutely encompasses the visioning process in a method that accommodates a schedule the city needs to deliver on,' Tai told the council. Councilwoman Andrea Marr said she didn't feel an advisory group was necessary, but urged city staff to do their best to engage a vast range of stakeholders in meaningful ways. 'There are more ways than just a task force to do visioning,' she said. '[But] I do want to make sure we're doing effective community engagement, that we are asking people what their vision is. This is a huge opportunity to make sure we're doing what the public wants.'
