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November 5, 2021 3:00 PM, EDT

Americold Third-Quarter Profit Lags, CEO Fired

Americold Americold

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Refrigerated warehouse operator Americold Realty Trust logged a large increase in third-quarter revenue, but earnings didn’t keep pace and dipped from the same period a year earlier. Americold also fired its CEO.

The Atlanta-based company said net income fell 57.3% to $5.3 million, or 2 cents diluted earnings per share, from $12.4 million, 6 cents, a year ago.

Revenue, however, rose 42.5% to $708.8 million from $497.5 million in the third quarter of 2020. Americold attributed the revenue gain to recent acquisitions, warehouse and transportation operations, expansion projects and price increases.

During the quarter Americold completed its purchase of ColdCo in St. Louis for $20.5 million and the acquisition of Newark Facility Management in Newark, N.J., for $376.5 million. It also finished a C$13.2 million expansion project in Calgary, Alberta.

The company named George Chappelle as interim CEO.

Fred Boehler

Boehler

On Nov. 3, Americold said it terminated CEO Fred Boehler’s contract “without cause.” Boehler also resigned as a trustee. The board has hired an executive search firm to find a permanent replacement.

Americold said Boehler’s firing was not related to any disagreement with the board of directors or members of management concerning corporate strategy or financial or accounting matters. It did not elaborate. Chappelle has served in executive positions at Tyson Foods and other food companies. He was named to Americold’s board.

“We’re focused on working efficiently while taking the time we need to find the best leader to take Americold into the future. We’re confident that this leadership change comes at the right time for Americold and that George is the right person to lead Americold through this period of transition,” Mark Patterson, Americold’s chairman of the board of trustees, told industry analysts and investors in a Nov. 3 conference call.

It also named Rob Bass, chief supply chain and global properties officer of Best Buy, and Pamela Kohn, chief merchandising officer of Sally Beauty Holdings, to the board.

The cold storage industry remains challenged by the COVID-19 pandemic, Rob Chambers, Americold’s chief commercial officer, said on the call.

“Our physical occupancy improved sequentially versus the second quarter, in line with our expectations and consistent with normal seasonality, but remains below third quarter 2020 levels, and well below pre-COVID levels for a typical third quarter,” he said.

 

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Pandemic-related food production disruptions are expected to continue through the middle of next year, Chambers said.

“We’ve seen supply chain disruptions in the past, and inventory holdings have consistently recovered to normalized levels over time,” he said.

The company’s third-quarter financial performance included growing revenue in its global warehouse segment by 39.7% to $542 million. Net operating income in the segment, a financial measure used to analyze the profitability of income-generating real estate investments, increased 13.5% to $145 million. Americold’s global warehouse segment same-store revenue increased 2.3% in total but 2% flat on a constant currency basis.

The company, whkich has 1.5 billion cubic feet of refrigerated storage, ended the quarter with 248 facilities.

Americold ranks No. 25 on the Transport Topics Top 50 list of largest logistics companies in North America.

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