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. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Casey Kotary, Investor Relations Representative. Please go ahead ma’am.

Thank you, operator. Good afternoon everyone and thank you for joining us to review Mobile’s fourth quarter and full year 2024 performance. With us today for 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 fourth quarter and full year 2024. 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. 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 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’s CEO, Manuel Chavez, to discuss fourth quarter and full year 2024 performance. Manuel?

Thank you, Jaycee, 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 accomplishments. 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 perspectives. Second, we build 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 and that it provides us as owners with important consumer analytics, which we utilize to assess parking trends in our markets. 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…

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. 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. 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 refinancings, substantially all of our secured 2024 and 2025 debt maturities have been extended. We continue to optimize our capital structure on an opportunistic basis. 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,…

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 add more value to stakeholders and developers than the parking income they provide. 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 stall. In September of last year, as Stephanie mentioned, we announced several strategic actions to enhance shareholder value, including funding future preferred stock redemptions in cash rather than common stock to mitigate dilution, 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. 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. Operator, now I would like to open the call to questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question will come from John Massocca with B. Riley Securities. Please go ahead.

Good morning.

Good morning, John.

So maybe going to 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 redevelopment opportunities for buyers?

Yes. 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. And so what we’ve done is, we’ve done a detailed analysis of 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, the best owner of these assets is. And what our goal 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. But it is something that we will be repeating and executing on throughout the next three years.

What’s the likelihood of significant transaction volume in the current calendar year, if you will?

Yes, 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.

What are kind of the plans around the line of credit, particularly as it pertains to refinancing, just given where interest rates kind of moved in the last couple of weeks.

Yes, it’s definitely something that’s on our mind. As you know, just sort of taking a step back, John, when we put that in place, really the thought was 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 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 credit. So working through those things now have been since the fourth quarter and expect to have more information to share next quarter for sure.

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 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 2026 and 2027. 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.

That’s it for me. I’ll hop back in the queue.

Thanks, John.

[Operator Instructions] Our next question will come from Marc Riddick with Sidoti. Please go ahead.

Hey, good morning.

Good morning, Marc.

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 talk a little bit about maybe your demand expectations? And then I have a follow-up on that.

Yes, 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 core portfolio. We’ve really been focusing on that for a year, honing in on the identified opportunities and diversifying out the demand drivers. So 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, 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.

Yes. 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. And then we’ve got a slight uptick in transient volumes.

Okay. Great. And then is there sort of 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?

Yes. 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 2025, 2026 and 2027. And there’s an impact both to demand to my point, but also to pricing and new products coming online.

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 RevPAS was actually up a bit in the fourth quarter year-over-year. And there does obviously there’s some seasonality there right, but if you’re just looking at the fourth quarter itself, RevPAS 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 – I’m not sure if the calendar was necessarily as favorable as it could have been?

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.

Okay, great. Thank you very much.

Thank you.

Thanks.

The next question will come from Kevin Steinke with Barrington Research. Please go ahead.

Thanks and good morning. Thanks for taking my question. So you talked obviously about accelerating your portfolio optimization efforts and 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?

Yes. 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. We’re looking to develop a critical mass in the markets that we move into or 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, as I mentioned in our prepared remarks, 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.

Thank you.

Thanks, Kevin.

The next question is a follow-up from John Massocca with B. Riley Securities. Please go ahead.

Hey, John.

Perhaps you’re muted, Mr. Massocca.

Apologies. I was muted there. Just a quick one for me. What’s the RevPAS growth assumption that’s baked into guidance, roughly?

So most of the RevPAS growth is coming from utilization, expected utilization growth as opposed to rate growth for the year.

Okay. All right. And are you expecting it to kind of be single digit growth kind of similar to what you’re seeing on the NOI and EBITDA side or…

Yes, it’ll be in line with revenue growth John.

Okay. That’s it for me. Thank you very much.

Great, thanks.

This concludes our question-and-answer session. 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.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.