U-Haul Holding (UHAL) 4 Feb 212021 Q3 Earnings call transcript

Good morning and welcome to the AMERCO Third Quarter Fiscal 2021 Investor Call and Webcast. 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 Sebastien Reyes. ahead. go Please,

thank the and joining today. us Good third you quarter to AMERCO call. fiscal Welcome morning for XXXX investor

Exchange begin, expenses, constitute income forward-looking remind to general growth statements including I'd business, certain and limitation, we may as and statements meaning Safe our the of without revenue, the of within of call, Section during everyone XXA XXXX, XXE Act XXXX, Securities of Harbor regarding the Act statements the of of Securities the this amended. Before as provisions that amended, of of Section like

to Forward-looking statements cause are and those projected. of inherently or from factors materially subject which predicted cannot could quantified. differ Certain risks be some to results actual uncertainties,

AMERCO's Form operating please Financial and this which U.S. For AMERCO. now risks of Exchange for a XX-Q is Chief discussion the At of the to Jason December and affect on refer results, business XX, to and Securities Berg, Commission. Officer quarter may turn over the ended that with XXXX, the call I'll file future time, uncertainties

share, answers a few that. $X.XX Yesterday, XXXX. then prepared open third the to we'll and earnings locations working my some speaking same remarks, CEO, today. out from for Shoen, field, share minutes for of you in today our in was and is be questions after here to on fiscal Thanks, of in we a Sebastien. the the go Arizona. $X.XX I'm ahead Chairman Phoenix, our to and up of unable period and quarter a After office traveling reported Joe compared in call

of of third to third the year will throughout otherwise my usual presentations, As unless year, compared comparisons of my this last noted. be the for quarter all quarter

for course of and self-moving products our demand see we the customer to the services. Over strong continued quarter, third

in our independent teams and of rentals of with responses dealers, government's pandemic teams, been serve The our already $XXX that all a saw to us million. was efforts it. superior the onset storage calls the XX% increase or in the the position technology frontline since Equipment an of field Our of answering to put customers. have and the combined place, about moving

new U-Move we're increase trailers good planned under many for $XXX corporate We've business, XX%, the For the even ramp trailers $XXX the decline. the likely growth last million us to weather total nine-month experienced program. first similar is million or dealers, new normal XXXX. year. is to from That's of still Compared now rough quarter. for down rotation in result would of put refer of our rental as on we volume this fiscal it number of by the investments customers. additional the delays, ability locations, this seen business, to disruption negatively up nine sales Capital We're were with a possible. in that unforeseen year's trucks suggest we've our rental the period the take in of note, The last That's box Proceeds quickly fiscal supply The Absent to year. equipment decreases last without $XXX period our will revenue below a month combination to billion first that equipment of and of normalize months, be to fleet the mile prior independent Sales delays that conditions. and along CapEx nine same million. Of fleet. what $XXX months. or for revenue of to to nine levels. decreased a for trucks January. manufacturing of from the the retired years going increased as A the to an made fleet XXXX a up estimate year serve rental COVID-XX $X.XXX months affecting spending to million nearly years last responsible continue year-and-a-half working for are this to for in two expenditures are what in the us any fleet retail year, account as position same

sales to success have industry, and as have prices continues rooms. However, continue well improved. whole, The filling to a self-storage in do we

XX,XXX at occupied same occupied last the we to our the increase an at end unit of time count year. units Looking December, had compared of

During to earnings our September-over-September XX,XXX call, I reported quarter second rooms. you growth of

accelerate, Revenues pace for see and to filling is up XX%. self-storage of has into as you January continued or so go $XX were So doing the we rooms can well. as million

now, the second increase. quarter experienced blended all-in a our row an rate in occupancy For

The nine we rate had rooms. XX,XXX from year XX,XXX quarter this -- We period added XX% same year. over rooms went of the first months year. to XX% we've during just the Last year added third for nine-month last new added this

from this same real of months million, million year. first space. acquisitions For last development of and estate as That's we've nine time warehouse well U-Box down $XXX year, as $XXX the in invested self-storage

of Our goal is to increase investment. the pace

feet upon going to XXX that projects. find in that's development. fit dependent our However, opportunities have We X.X new model. our ability million be rentable That's approximately currently economic to square across

that of yet phase, but around additional in we We that XX not cohort properties the active are own. development have an

these with is in quarter million earnings improvements back lines, the quarter. the increased $XXX major growth our of $XX storage three CapEx, XX% product or we and increased segment, to are million our $XXX moving the into CapEx ramp for going to take us some product lines all These moving in January. million, total supplies, of with Retail for storage hitches reporting to a gains. and And As Operating and towing continue sales of month equipment seeing accessories, propane. are up. time

the of rentals see well last another below quarters, in increase. operating For and liability revenue were the quarter, personnel, rate revenue maintenance below quarterly we expense costs in should volume they largest fleet, repair trend. will repair the and of saw increase costs, our maintenance but two the it three and categories, The next we increases well but over be

not recorded For expense an be for to year ownership personnel, spread likely the four over in whereas will that company contribution employee the we this year our stock last a yet recognized fourth plan. expense That out has quarter, quarters.

We totaled improve existing segment this At our continue to our million. moving availability liquidity facilities, and and and December of from XXst at position. cash cash storage year $X.XXX loan

our paid call. Session Thank and During to $X quarter, Question-and-Answer like dividend. of declared that, cash hand begin to per the third Rash Naveed you. I the to our we With [ph], back portion special share operator, question-and-answer call the would a

now Instructions] from first go [Operator ahead. will session. the question Please with being question-and-answer Zacks. We comes The Steven Ralston

Good morning.

Good morning, Steve.

And through am one I third Congratulations, on say this I in the an and the extreme reported you estate amazing it transaction. $X, business. thought, historically very And quarter, numbers. except with where $X of leverage real had often, was a with don't between the year company fiscal aggressive $X estimate. shows came $X-plus and I for quarter. my I the the looking usually you has in And

a -- business. driver that, were because it talk the was to challenge the obviously If rental the be quite you in quarter being well second that, on about -- quarter saying repositioning vehicles fiscal that. the conservative And you call, you going could accomplished

this your Obviously you large And it And you able have, when that about volume was this and field teams. come in? to have demand. a strong one-liner. You sort there you and better? could you're But talk gave congratulated you leverage pricing of infrastructure, utilize consumer

great a Thank great, It's Steven. question. you, Sure.

much. couple a pieces. I into down of you it break I'll So if redirect, I'll wander let to too Then, start

or trucks which quarter, driven would from either was being revenue is rate. coming that what is of the saw of think the transaction, this rate. was the per majority growth. are for revenue we we say quarter of what of XX% equipment during mix a during more remainder transaction of The And in increase that this refer transaction, was to I combination the of coming maybe form that you that I saw per rented miles that, So that of as from

solved a from dealing with about teams we're call that. of to that more seeing. say, we're have it. our concerns the point if we they're – to to But been with they've And this So go don't at I still more any last still are attempting at all. see our across pronounced but country through little certainly lot cycle there's what you're you would – and equipment And adapt used I about degree to we've you're shows country. parts to working than dislocations. large coping the than in a equipment the the the you going the Nashville say think But that past through it. to in we're of placement – year always when it equipment We're talk any there's

through charge One that that is of the customers. work the ways prices through that we we

And for the of equipment the So it's we becomes in go put that and saw the demand. natural as the harder And us during places benefit certain up. rates quarter. to supply

the you answered So I'll haven't me, whole if question. I let redirect

percent up it Thank done up down. and fine. only noticed like went in you. I that's gone that No, in XX-some structure anything your area? costs a cost went Also, X%. there I Revenues seems Was think – the range cost that has

largest, mentioned probably big we our there. picked margin as I up Well, expenses personnel and our most is three the

significant up from in $X.X is is the revenue. seeing field in increase that maybe million coming costs for compensation. personnel And we're of the $X increase went a think I As expense quarter on pretty personnel our performance only million, what majority

hard year. quarter our was fairly So hit this of in first field the

or As transactions adjustable down performance-based with went down, went down revenue there compensation went and it.

them. made as and kind So of two was it vent last in quarters comment. they've general Well, a up some the tough now that on

in bonus total, headcount. lid up. been costs seeing to go we're a So on keep But able those we've

spread ESOP hit fewer a But then will this medical the this flat $X $XX mentioned of costs in that it us for – have months the should trucks. year, tune quarter the still the hasn't nine part million I that expense kept margin sold most on a whereas much. think I fourth quarter. of first has repair, out $X remained cost that and positive the or year the probably and utilizing On that for in it probably that care people was year benefited hit keep about evenly million Our maintenance last area. medical million we've have virus we yet out the here to year the as And plan relatively of

repairs the the the of maintenance repair two that and sale and on components are to prep maintenance preventative fleet. our do then we So for structure biggest trucks

So can. of volume the bit transactions. fleet as we we doing preventative been we've where We're due on as a behind to year little were fast maintenance the last

repair and maintenance But So costs for that's quarter. the offset costs a prepping see in trucks fourth maintenance in we'll preventative rise decrease been by sale. again

So otherwise, revenues the fall some those those other expense the smaller categories tax two categories. out kind year largest that increases All I outpaced we sticking costs. in but And see the are now. that for of recall category right don't any other in property

you. Thank

expense be this Your in up a that ESOP to or year line is last with bit going year?

or million. It be probably say will line we $X would then in

congratulations All right. Again on quarter. amazing

you. Thank

Craig with [Operator comes Instructions] from Please The Artisan Inman next Partners. question go ahead.

-- thought I miles driver was of the Hey I driven. Hey. repair is biggest that Jason,

surprising. seeing and about up a is number that? that Can So not you repair talk maintenance lot

the last question But, good Sure, answer didn't I’ll. enough. I

maintenance. by by is preventative units this maybe That where I the porches, created just expense want bad repair use as offset down, of the maintenance think decrease up. which the XXXX-plus sold. by our to don't maintenance, say, the is preventative driven for we're there portion miles quarter, is being It's driven pun So, the and I

cargo for the so ones sale, the those had pickups unit with And and the that vans the for past. issues we've cost in prepping the

much as of quarter. had running costs for through haven't We the those

do talking November we we simply seeing backlog of usually right and So that you're we're because higher bit transactions in now, increase an still have a what but have in December. that's don't -- than little normal in about volume where this

of control. catch this but additional not first the anything quarter that's we some up have out it's of So will in year,

well, Okay. probably the is I'll the I in but really this formulated US mean mobility hadn't try I question now. it. rise on

across So bigger what's going to the mean migration with are making you or regard all new the going driving found think head country? about freedom this to through I management's business how of pulled we now and the of of we're around your thoughts a business. kind level evolution that's utilization on forward or the Some permanently just migration fleet? of affecting right at have demand around

public trying is an interesting to to what now we've the everywhere question. the stores. be opportunity our for but I us Yeah. company expand into has is foresee -- think certainly And where going is this markets with we That's business the model what more didn't decades been And for coming, to working that be. created this

keep been we'd worked vibrant independent So or has network markets there's company get spurred least that that markets oftentimes that I've a have how working enough of on new that this big into. markets economics the us for And a of a and areas. there's in yet. number haven't with over mentioned, years, cover those at there's enough the many been in, those still we're markets dealers I people we store so plan where to can the that not we're think XX,XXX

early I those to much -- that dealer that I this pandemic, of continue get think than in to us. kind ways there process the affected Early in dealer has meet on, path, the find down find in pushed on network and more or this along us for was our this network us mentioned markets, economical demand.

As more critical We shut we of critical down essential businesses redeemed business. essential their were open. stayed workers,

So thing. entire throughout open independent do we to Many weren't remained dealers that. able the our of

grown that the network the And to half last a of our U-Haul a December are at as year. from think locations. business we've help a little them relatively reason growth we're of year, I dealers they've years, network. way of up and over with in dealer tried use we're The second letting pace by we open. X,XXX and be this has last them several stay But come many the keeping the open company to over back having very strong been flat Now dealer

a making customers. the we're to closer conserved effort get to So

think don't I business So, dramatically this has our changed model.

its other its a some ways, to in little I think go in us ways and reaffirmed think it harder at encouraged bit I it.

you product? is more on Yes. it your this do of is a the one-time for reports move condition a in terms How get demand permanent or

good on a may this. for feel have Joe different real guess that. don't I I opinion have a

our business upon just think life any always I of would said I've that that, is based happen.

big deaths, do there's be people as some do the have well. that. normal that college. moving to we'll process to at, big ebb to they positioned to whole we'll other likely moved going I they're And So and well whole And cities mean bunch I that. around and a they'll see normal certain going to help there's if I how return adjust the and to where stay of think the to be away if of we'll not perhaps settles way. the back for school cities to life move equipment that's Or marriages, be that a changed people think it on flow how just events, will But of out natural going places. somewhat has and then moved our them and have to dust

versus missed the was the or volume transaction obviously And much the growth say, then of how I call the you of fleet changed. the first migration revenue has Did part just...

transaction quarter. this has been About XX% growth

doing And or of know cohort improved? is -- quarter number on I you're X-year on that XX% or just has if that any in terms occupancy the stabilized every annually Okay. that don't -- there

So I down X-year couple whole flames after ditched that of in ago. that went deal years a

of But So -- hasn't been XX% yet a Wilen, -- of one that our have how answer questions been but locations out liked one was, on can at him are he the you had you questions Jamie that the over given it it for occupancy. pick phone I best. many from have I'll the other give make I some but able to number ways you I to got few a and we the look I'll doing of

locations of locations year. the about that's those or December to locations XXX locations at for were were now XX% of locations end increase an from the over X% XX% year. of XXX our over And XX% about where occupancy last averages last And of or up compared XX% occupancy. December occupancy So to close

So occupancy at at open also or for that for the formula properties all of an done two of that it. was years. looking way I XX% least were had had one

stabilized competitors points. their and of up some was as what that was occupancy REIT of our number. was kind XX% that's And X -- use So average group a occupancy about

how look stabilized is probably up otherwise facilities property kind we've bunch up of it occupancy to points. seen had to you X matter as our no a a other whole at growth hoped. we So average And the X about are starting in as of fill

which tax the the still remember $XXX there? one in was on, that I helpful. couldn't where have I we're go to -- looks million then And That's is Yes. but it you like refund which look Okay. getting some -- at it iteration about it's at.

Yes.

about but we that Treasury have interest now filed it. $XXX million. it's and those, are the haven't total we've year we we is $XXX point filed the received for to U.S. And the million refunds for -- I filed are that -- the I returns. paying in tax December think going So think passed Then where waiting them carry-backs for are its now refund our And yet. being fiscal that then 'XX about on

So received we cash that's through yet. in and all of up still process we during and quarter today haven't that the actually any -- but

Great. me. that’s for Okay. all

Jamie time. But doing. perhaps on like of sent some. to I be asking the today. submit And he to is we're could Wilen not ahead in he would time White slide ahead call But like of not send I some did the has questions people now, promise House questions

for to everyone. wanted hit questions I those So

quarter. increased for the at second Jamie's So, rates first question straight occupancy was nicely self-storage

are this answer locations comparison. locations ago looking year the into rates self-storage for Given at would at this -- the to to the rates changed rates say answer. it new occupancy I up be our can last How so His rates of all we COVID are rise average we so customers construction, year? portfolio next is yes what year? square foot Well, year? is per XX-month expect facilities levels? fiscal that continue about pause our would going be square of in figures, flat you Now, quote many the will reasonable understand in to But blend the a I because for just question the average that of fiscal And new facilities? feet Have how versus in but many I in looks a this our our rate portfolio. once number. do versus last next that did is, X%. year, moving were expectation that I locations, would add typically Those have a across nine-month relatively so year whole to just

So square this we've new nine first the for year, months feet. of X,XXX,XXX done

to XXXX, of all project to our we all that's now but active going next fiscal here has another list feet, projected build in not Right square out million For happen feet. did square months. XX the X.X us X,XXX,XXX

do There XXXX. And XXXX, year had and year utilization to was the new versus This next where only not we that trucks fleet His we to With were strained a fiscal that's obviously of X.X nicely, the prior this would for capacity always of as the utilization expect above are delivery marginally. where what in were probably and continue I close fiscal So a year vehicles reach end well closer to question, grew has for So a we fantastic suspect truck point the the pause rental to available? look like million be about levels of can we're I'll is in growth end of square answer XXXX, fleet demand. Joe result, ever due to did we while Did fiscal higher. going we the given truck And to fleet by periods in maybe the supply that time past. profitability. month, the rental feet. going volume you give years? up drove to

that fleet, accentuating just significant and of these demand high You areas add it's the one-way into movement that. the now

fleet So this I we've been to that in demand today. the we've how again the made handle really is want to investments stress able previously

the that and to We assume you to continue forward. to specifically -- corporate the the going when the during they trucks so short buildup, the during this whole to too UPS should many are fleets you I are only to question, supplementing answer Amazon, of expect will is utilization yes. own FedEx that fleet holidays? about next His So talk question used holiday not want referring crunch. business,

when delivery when will than So So always above with rentals majority should a to say they operating We have those a managers in we of do have whole the time that corporate just there call smaller what talking are work us last about, fill be expect accounts, with we're of business. -- account mile that. for during -- that we accounts we are the that that capacity? team

So comes in the this business throughout year.

working I great a to organizations. why reason continue. with not any have that's going these see relationship don't We

self-storage we with As this you I remarks, depreciation the the fleet be changed saw much operators would dramatically in Okay. year? in business increase fiscal additions. during mentioned mile in of our not next pause the so to prepared expect What more with and last Amazon. traditional Depreciation the quarter construction with charges

think the I think fleet listed million XX-Q. down in million the it I depreciation nine and $XX.X was out months. $X.X for about we Quarter

I everyone up A quarters end not Well few start very think, see often. to this to fiscal of told year. trending you're back. that been pushed ago, I going towards that that's So the going we're

really million And $XX and the XX-foot think to depreciation, has other listed we're million pretty now have maybe at months. was All of the for quarter big the $X now and to the non-fleet So we starting think, $XX the looking produce I of those our for those up probably trucks, we're do next lot about nine effect. that a million, I timing of a of year. with middle production and

margins? comparable at largely a to required to report expect fourth their increase looking is profit we're us we quantify percentage on rate disadvantage. -- here quarters would And and that. you puts larger that revenues, I as that development we're at run increase, how a begin but that's our where how expense, layered quarter. now at in year from last lower not its self-storage Can into start U-Box at competitive starting related feel that the to reporting to to Looking point to at that Well, which the continue we

that their is So I no else results. and will in reporting one do are we're not line. What say in that because a moving hurry these is other revenues the storage revenue to embedded

do just for So managerial that that the kind the regarding should look can. you of of, if at a cut expenses EBITDA a be the -- it in and profit our pro allocates least and of, the sits of you line as change that to margins at at kind P&L able And you storage. look of get moving forma a direction them best the overall we as sense below And program. margin we

statement. points. This or So what our storage insurance things couple credit securities on. CECL. at marketable same it's lag within quarter in of companies our the still a we figure the one as in level value March they it's companies. not a the quite the positive the the by for So have it's expected and segments, hitting two loss going quarter? call overall are There's quite is moving change and but insurance income What the Both affected will of be standard for

XX-months, the segment $XXX,XXX. is Insurance think, around for going I a to our charge Life So have of

quarter there. will out to work them be of the fourth though $XXX,XXX benefit in a think get actually So about it that I to

negatively more the year. first in affected were of they think I half the

it's adjustment. company, For our a P&C smaller

they our that particular was the I effect quarter allowances think bond the has reduced ended the positive as market being improved the allowance. for corporate it their actually has market, end as improving in of up CECL up securities

we I question he asked and one then, from had think, in our Kindred cash at build. Galbraith come Steve And about

So of at just December, were at we cash. the end

available $XXX So moving had excluding and million. segments. At was March debt, we billion $X.XXX cash storage that the just at

couple a things on. So of going

versus the to as previous cash reduced up net But record flow CapEx about cash operating million nine-month on if we cash, sales at -- and million. non-GAAP were cautious, officially of takes. First, we also see $XXX the months in EBITDA nine try GAAP -- happens government EBITDA CapEx was million to the going were programs And increase. flow level don't a year. for the cash for now then to our less CapEx it's then see back tax and up so measurement. the espouse our it's And $XXX at presented believe, as because down We asset billion. we're $XXX you I statement flow right a $X.XXX regulation with what ramp direction That's look what a policy remain outlook COVID CapEx

So I questions. all think the that's

call So if I go ahead mind the can now. the doesn't appreciate support. We just operator and everyone's wrap-up right

then we'll our on release back to is on earnings XX next Our have be annual we'll And we'll file next call for those quarter be going our May May -- our fourth XX. results our XX-K.

your to you talk So and you thank participation we'll then. for all

now attending conference today's The for has concluded. presentation. Thank you

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