Good afternoon, and welcome to the Mobile Infrastructure Corporation Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.

Thank you, operator. Good afternoon, everyone. And thank you for joining us to review Mobile's fourth quarter and full year 2023 performance. With us today for mobile are Manuel Chavez, CEO and Stephanie Hogue, President and CFO. During this conference call, we will make forward-looking statements to assist you in understanding Mobile management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially, and I refer you to our March 14 2024, press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today but specifically disclaim any obligation to do so. I will now turn the call over to mobile CEO, Manuel Chavez, to discuss fourth quarter and full year 2023 performance, Manuel?

Thank you, Casey. And thank you all for participating in today's call to review our fourth quarter results and discuss our outlook for 2024. As this is our first conference call since listing on the New York Stock Exchange of America, so I’ll begin with a brief overview of the company and then discuss for quarter business performance and the progress we expect to achieve in 2024. Mobile Infrastructure is the owner of a diversified portfolio of 43 parking assets, which are split between garages and lots and 21 markets with an average MSA population of about 2.9 million people, most of whom drive to their destinations. In 2022, this asset portfolio was valued at $520 million by an independent national financial services firm. And since 2022, our net operating income has increased by 9.5%. Thus, while we are a small cap company, our underlying asset base is quite substantial. Our team has deep industry expertise in acquiring and operating parking assets. The parking industry represents an enormous addressable market, yet the vast majority of parking assets are passively managed. In contrast, our corporate strategy is centered around actively managing each of our assets with the objective of driving utilization, rate optimization, and economies of scale. To support these goals, we have invested in technology infrastructure that provides our team with a unique insight and a differentiated competitive perspective across our entire portfolio. Longer term, we intend to leverage our experience relationships and technology to become the acquirer of choice in the fragmented parking industry. And we see secular industry trends that point to the potential for significant value creation. But more on that a little later. But this snapshot of Mobile Infrastructure as a base, here are the key takeaways from our fourth quarter results. First, we substantially improved…

Thank you, Manuel. And good afternoon, everyone. I will provide additional details about our financial performance in the fourth quarter of 2023 and the full year, as well as review or guidance for 2024. Fourth quarter revenue of $7.9 million increased 14% year-over-year as compared to $6.9 million in the fourth quarter of 2022. We benefited from higher rent revenue as parking activity increased. We saw particular strengths in parking activity at ourselves and southwestern locations, which benefited from broad based activity as well as continued historically high demand for premier events and higher hotel and valet traffic. At the same time, our team's disciplined approach to our cost structure resulted in reduced property operating expenses of $544,000, or roughly half of 2020 to $912,000. We manage property level cost more tightly through reduction of discretionary spending, insurance and professional fees. Property taxes were $1.9 million, up slightly from $1.7 million a year ago. The impact of higher revenue and lower operating expenses resulted in net operating income, or NOI of $5.5 million, which was up 27.7% year-over-year and represented 69% of revenue. General and Administrative expenses of $3.9 million increased $1.2 million year-over-year, reflecting public company costs as well as non-cash compensation expense of $2.4 million. Adjusted EBITDA was $3.4 million up 36.5% from $2.5 million last year, and represented a 43% margin on revenue. We believe our cost structure can support significant contribution margins on incremental revenue growth. Shifting to full year results, revenue of $30 million increased 4% year-over-year, with NOI of $21.1 million, up 10% when compared to 2022. Similar to the fourth quarter lower property operating costs, allowed NOI to grow significantly faster than revenue. Adjusted EBITDA of $14.8 million increased 34% year-over-year in 2023. As Manuel mentioned, we converted 26 locations to management contracts…

Thank you, Stephanie. To sum up, Mobile Infrastructure has a substantial asset portfolio that is set to have another year of improved performance in 2024. Our active management strategy is unique in our industry, and has enabled us to gain share in our markets and will continue to be a differentiator for us as we further improve our operations in 2024. We have ambitious long-term growth plans that are underpinned by a favorable secular trends and a robust acquisition pipeline. And our management team has significant ownership and it's fully aligned with the shareholders interests. Operator. Now I would like to open the call for questions.

Thank you, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from Brian Maher with B. Riley. Please go ahead.

Great, thank you. And good afternoon. Just a few for me today. In the pipeline, I think you said $300 million Stephanie, how many assets would that represent? And maybe for Manuel How long do you think it takes until you see positive indicators to pull the trigger on some of those or is it just simply a matter of the equity value of your stock?

Thanks, Brian. Good to hear from you. To answer the first part of your question. I'll kick it over to Manuel. The $300 million represents about 15 to 20 acquisitions and the pipeline.

Yes. So when it comes to acquisitions, our eyes are wide open. We're having continuous conversations with relationships throughout the country that we continue to build on that pipeline. There still is significant, yet a significant gap between seller valuations, as far as their expectations, and sort of what the market will bear. And it has been our experience that these seller expectations tend to lag the capital markets by a significant amount of time. So we're going to be very disciplined. And we're going to continue to build that pipeline and continue to build relationships and when sort of cost to capital, capital markets come in line with seller expectations, then we're going to look to execute. You brought a good point, though, there's another side of that coin, using our currency or stock. We believe our stock does not reflect the value of the portfolio. So we're going to continue to focus on organic growth and see where the stock goes. In the short term, we're discovering and discussing creative structures in order to facilitate transactions. And that's really how we're organizing the acquisition efforts.

And this asset class is new to some of -- there's not a whole lot of parking REITs out there in the market. What kind of cap rates is the bid/ask spread? How should we think about that?

Yeah, that's fair. Historically, parking assets have traded from depending on the market, they've traded from anywhere from mid-4 cap rates to mid-6 cap rates. There's been some movement in the market where you've seen 100 and 150 basis points of movement. But if you look back at the beginning of 2023, the cost of capital, at least debt capital was perhaps 500 basis points below where it is today. And so that's sort of the delta on the bid/ask that we're dealing with today.

Okay, and just shifting gears, on the conversions from leases to management contracts, how many more those are there to go and do you -- how many of the ones that remain do you think you should be able to get done in 2024?

Yeah, that's a great question. So we've converted 26, we're working through 3 additional, that we are confident should be done by through 2024. There are 2 potential that may be done that will take us to a total of 31. The balance of those are of the assets are on long term leases. So those will run off and as the lease terminates, then we will convert those to management contracts. But that's really a ’26-‘27 exercise.

Okay, and just two more for me, and I hope I'm not holding anybody up in the queue. But Stephanie, do you have kind of a run rate G&A number that that we can think about for the quarters for this year?

Not, we didn't, we did not budget by quarter, it's really annual. I think we're expecting between 5 and 6, still comparable to where we were last year, on a cash basis.

Okay. And then just last, and again, sticking with Stephanie, for a second. When you look at your expenses, where is the most low hanging fruit to get those numbers down as we move through the year?

On the property side, or on the corporate side?

Both.

On the property side, we had a number of discretionary expenses last year that were one time in nature. So some CapEx upgrades that was really related to technology and revenue control. There were also some engineers, engineering studies that we did. And those are, like I said, one time in nature, so we don't anticipate picking those up again, going forward. On the G&A side, I think we're pretty normalized for the year ahead, given the size of the company, I'm not sure. As a public company, they're just public company costs. I think we've got that pretty well normalized.

Thanks. That's all for me. And welcome to the world of quarterly conference calls.

We're looking forward to it, Brian.

Thank you. [Operator Instructions] Our next question comes from Bryan Frackman with Lion Street Capital. Please go ahead.

Hey, guys, congratulations on your first call.

Thank you.

Wanted to just touch base there on return to office. How does that dynamic impact your forecasting strategies and potentially sort of what are the assumptions embedded, and anything you want to sort of discuss on that topic?

Yeah, no, that's a great question, particularly with what we're seeing out there today. We are not basing our annual operating plan or budgeting on a return to office movement. The return to office move, quite frankly, been anecdotal. It's been our experience over the past 18 months, it's been almost flat. So our assumptions are that the status quo is the new normal. But what we do believe that is the continued densification of the urban core. We're firm believers and supporters of civic and public infrastructure, and that infrastructure remains a giant demand driver. For example, Athletic Stadium, ballparks and arenas, convention centers, concentration of hotel rooms, interstate connectivity, and the increasingly residential development and redevelopment. And so, our idea to grow our business is to focus on those demand drivers and to drive utilization and rental rates by capturing those demands.

Thanks, guys.

See you.

Thank you. And this concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any closing remarks.

Thank you, everybody. Appreciate your time this afternoon.

Thanks, all.

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines. And have a wonderful day.