AMERCO Reports Third Quarter Fiscal 2020 Financial Results

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RENO, Nev., Feb. 5, 2020 /PRNewswire/ -- AMERCO UHAL, parent of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company, today reported net earnings available to shareholders for its third quarter ended December 31, 2019, of $30.9 million, or $1.58 per share, compared with net earnings of $78.6 million, or $4.01 per share, for the same period last year.

For the nine-month period ended December 31, 2019, net earnings available to shareholders were $319.7 million, or $16.31 per share, compared with net earnings of $370.0 million, or $18.89 per share, for the same period last year.

"We maintained our expected rate of renting new storage rooms while continuing our strategy of releasing new self-storage product in markets underserved by U-Haul," stated Joe Shoen, chairman of AMERCO. "As I cautioned in November, I expected our business with last mile delivery companies might be flat or down. We saw a decline in this segment of the business during the quarter. Business with our core residential moving customers improved, but as I indicated last quarter, there is room for more progress."

Highlights of Third Quarter Fiscal 2020 Results

  • Self-moving equipment rental revenues decreased $4.7 million or 1% during the third quarter of fiscal 2020, compared with the third quarter of fiscal 2019. The decline was a result of a reduction in our Corporate Account business. The third quarter of fiscal 2019 experienced a higher than usual volume of Corporate Account rentals. Outside of that portion of the business, we had revenue increases for both our In-town and one-way markets. We increased the number of retail locations, trucks, trailers and towing devices in the rental fleet compared with the same period last year.
  • Self-storage revenues increased $13.3 million during the third quarter of fiscal 2020, compared with the third quarter of fiscal 2019. The average monthly amount of occupied square feet increased by 16%, or 45,000 units, during the third quarter of fiscal 2020 compared with the same period last year. The growth in revenues comes from a combination of occupancy gains at existing locations and from the addition of new facilities to the portfolio. Over the last twelve months, we have added approximately 6.1 million net rentable square feet or an 18% increase to our owned self-storage portfolio with approximately 1.2 million of that coming on during the third quarter.
  • For the third quarter of fiscal 2020 compared with the third quarter of fiscal 2019, depreciation, net of gains and losses on sales increased $26.6 million. Depreciation expense on the rental equipment fleet increased $16.6 million primarily due to a larger fleet, while net losses on the disposals of rental equipment increased $2.9 million. All other depreciation increased $7.0 million due primarily to the increase in new moving and storage locations.
  • For the first nine months of fiscal 2020 and fiscal 2019 gross truck and trailer capital expenditures totaled approximately $1,161 million compared with $882 million, proceeds from the sales of rental equipment totaled $591 million compared with $559 million and spending on real estate related acquisitions and projects totaled approximately $600 million compared with $639 million, respectively.
  • Fleet maintenance and repair costs increased $13.6 million in the third quarter of fiscal 2020 compared with the same period last year.
  • Operating earnings at our Moving and Storage operating segment decreased $58.2 million in the third quarter of fiscal 2020 compared with the same period last year. Total revenues increased $7.4 million and total costs and expenses increased $65.6 million.
  • Cash and credit availability at the Moving and Storage operating segment was $659.2 million at December 31, 2019 compared with $724.5 million at March 31, 2019.
  • On December 4, 2019, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on December 19, 2019. The dividend was paid on January 6, 2020.

AMERCO will hold its investor call for the third quarter of fiscal 2020 on Thursday, February 6, 2020, at 8 a.m. Arizona Time (10 a.m. Eastern). The call will be broadcast live over the Internet at www.amerco.com. To hear a simulcast of the call, or a replay, visit www.amerco.com.

About AMERCO

AMERCO is the parent company of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company. U-Haul is in the shared use business and was founded on the fundamental philosophy that the division of use and specialization of ownership is good for both U-Haul customers and the environment.

Certain of the statements made in this press release regarding our business constitute forward-looking statements as contemplated under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of various risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. For a brief discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to our Form 10-Q for the quarter ended December 31, 2019, which is on file with the SEC.

Report on Business Operations

Listed below on a consolidated basis are revenues for our major product lines for the third quarter of fiscal 2020 and 2019.





Quarter Ended December 31,





2019



2018





(Unaudited)





(In thousands)

Self-moving equipment rentals

$

621,471

$

626,136

Self-storage revenues



106,701



93,392

Self-moving and self-storage product and service sales



54,454



55,665

Property management fees



9,098



7,899

Life insurance premiums



31,164



34,778

Property and casualty insurance premiums



19,267



17,668

Net investment and interest income



33,782



32,211

Other revenue



51,943



51,342

Consolidated revenue

$

927,880

$

919,091

Listed below are revenues and earnings from operations at each of our operating segments for the third quarter of fiscal 2020 and 2019.





Quarter Ended December 31,





2019



2018





(Unaudited)





(In thousands)

Moving and storage









Revenues

$

846,364

$

838,928

Earnings from operations before equity in earnings of subsidiaries



61,769



119,959

Property and casualty insurance 









Revenues



25,366



22,146

Earnings from operations



9,884



11,001

Life insurance  









Revenues



58,889



60,435

Earnings from operations



9,190



7,429

Eliminations









Revenues



(2,739)



(2,418)

Earnings from operations before equity in earnings of subsidiaries



(278)



(287)

Consolidated Results









Revenues



927,880



919,091

Earnings from operations



80,565



138,102

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. Self-storage data for our owned locations follows:





Quarter Ended December 31,





2019



2018





(Unaudited)





(In thousands, except occupancy rate)

Unit count as of December 31



487



411

Square footage as of December 31



40,835



34,693

Average monthly number of units occupied



323



277

Average monthly occupancy rate based on unit count



66.9%



68.0%

Average monthly square footage occupied



29,318



25,126

Listed below on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2020 and 2019.





Nine Months Ended December 31,





2019



2018





(Unaudited)





(In thousands)

Self-moving equipment rentals

$

2,174,392

$

2,124,451

Self-storage revenues



309,940



271,097

Self-moving and self-storage product and service sales



207,601



207,819

Property management fees



23,487



22,507

Life insurance premiums



96,229



107,586

Property and casualty insurance premiums



51,056



46,732

Net investment and interest income



102,629



85,043

Other revenue



192,009



177,940

Consolidated revenue

$

3,157,343

$

3,043,175

Listed below are revenues and earnings from operations at each of our operating segments for the first nine months of fiscal 2020 and 2019.





Nine Months Ended December 31,





2019



2018





(Unaudited)





(In thousands)

Moving and storage









Revenues

$

2,916,314



2,813,747

Earnings from operations before equity in earnings of subsidiaries



492,652



556,228

Property and casualty insurance 









Revenues



69,199



58,557

Earnings from operations



27,442



21,573

Life insurance   









Revenues



179,069



177,910

Earnings from operations



19,912



16,812

Eliminations









Revenues



(7,239)



(7,039)

Earnings from operations before equity in earnings of subsidiaries



(836)



(863)

Consolidated Results









Revenues



3,157,343



3,043,175

Earnings from operations



539,170



593,750

The Company owns and manages self-storage facilities. Self-storage revenues reported in the consolidated financial statements represent Company-owned locations only. Self-storage data for our owned locations follows:





Nine Months Ended December 31,





2019



2018





(Unaudited)





(In thousands, except occupancy rate)

Unit count as of December 31



487



411

Square footage as of December 31



40,835



34,693

Average monthly number of units occupied



316



272

Average monthly occupancy rate based on unit count



68.2%



69.4%

Average monthly square footage occupied



28,646



24,553

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS







December 31,



March 31,





2019



2019





(Unaudited)









(In thousands)

ASSETS









Cash and cash equivalents

$

631,951

$

673,701

Reinsurance recoverables and trade receivables, net



200,164



224,785

Inventories and parts, net



103,003



103,504

Prepaid expenses



188,780



174,100

Investments, fixed maturities and marketable equities



2,469,468



2,235,397

Investments, other



336,727



300,736

Deferred policy acquisition costs, net



106,354



136,276

Other assets



71,821



78,354

Right of use assets – financing, net



1,130,473



-

Right of use assets - operating



107,974



-

Related party assets



47,988



30,889





5,394,703



3,957,742

Property, plant and equipment, at cost:









   Land



1,018,010



976,454

   Buildings and improvements



4,522,855



4,003,726

   Furniture and equipment



733,063



689,780

   Rental trailers and other rental equipment



511,872



590,039

   Rental trucks



3,454,759



4,762,028





10,240,559



11,022,027

Less: Accumulated depreciation



(2,640,940)



(3,088,056)

   Total property, plant and equipment, net



7,599,619



7,933,971

Total assets

$

12,994,322

$

11,891,713

LIABILITIES AND STOCKHOLDERS' EQUITY









Liabilities:









   Accounts payable and accrued expenses

$

551,770

$

556,873

   Notes, loans and finance/capital leases payable, net



4,548,609



4,163,323

   Operating lease liability



107,581



-

   Policy benefits and losses, claims and loss expenses payable



1,015,663



1,011,183

   Liabilities from investment contracts



1,753,428



1,666,742

   Other policyholders' funds and liabilities



12,924



15,047

   Deferred income



31,459



35,186

   Deferred income taxes, net



869,671



750,970

Total liabilities



8,891,105



8,199,324











Common stock



10,497



10,497

Additional paid-in capital



453,819



453,326

Accumulated other comprehensive income (loss)



39,517



(66,698)

Retained earnings



4,277,034



3,976,962

Cost of common shares in treasury, net



(525,653)



(525,653)

Cost of preferred shares in treasury, net



(151,997)



(151,997)

Unearned employee stock ownership plan shares



-



(4,048)

Total stockholders' equity



4,103,217



3,692,389

Total liabilities and stockholders' equity

$

12,994,322

$

11,891,713

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS







Quarter Ended December 31,





2019



2018





(Unaudited)





(In thousands, except share and per share data)

Revenues:









Self-moving equipment rentals

$

621,471

$

626,136

Self-storage revenues



106,701



93,392

Self-moving and self-storage products and service sales



54,454



55,665

Property management fees



9,098



7,899

Life insurance premiums



31,164



34,778

Property and casualty insurance premiums



19,267



17,668

Net investment and interest income



33,782



32,211

Other revenue



51,943



51,342

     Total revenues



927,880



919,091











Costs and expenses:









Operating expenses



517,453



478,461

Commission expenses



66,542



67,493

Cost of sales



35,318



34,149

Benefits and losses



42,864



42,869

Amortization of deferred policy acquisition costs



8,046



6,654

Lease expense



6,490



7,890

Depreciation, net of (gains)/losses on disposal



170,074



143,473

Net losses on disposal of real estate



528



-

     Total costs and expenses



847,315



780,989











Earnings from operations



80,565



138,102

Other components of net periodic benefit costs



(263)



(253)

Interest expense



(39,973)



(34,827)

Pretax earnings



40,329



103,022

Income tax expense



(9,397)



(24,387)

Earnings available to common shareholders

$

30,932

$

78,635

Basic and diluted earnings per common share

$

1.58

$

4.01

Weighted average common shares outstanding: Basic and diluted



19,607,788



19,591,963

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS







Nine Months Ended December 31,





2019



2018





(Unaudited)





(In thousands, except share and per share data)

Revenues:









Self-moving equipment rentals

$

2,174,392

$

2,124,451

Self-storage revenues



309,940



271,097

Self-moving and self-storage products and service sales



207,601



207,819

Property management fees



23,487



22,507

Life insurance premiums



96,229



107,586

Property and casualty insurance premiums



51,056



46,732

Net investment and interest income



102,629



85,043

Other revenue



192,009



177,940

     Total revenues



3,157,343



3,043,175











Costs and expenses:









Operating expenses



1,617,338



1,504,365

Commission expenses



233,540



232,084

Cost of sales



128,177



130,432

Benefits and losses



137,695



137,196

Amortization of deferred policy acquisition costs



20,625



18,584

Lease expense



19,882



24,229

Depreciation, net of gains on disposal



462,227



402,525

Net (gains) losses on disposal of real estate



(1,311)



10

     Total costs and expenses



2,618,173



2,449,425











Earnings from operations



539,170



593,750

Other components of net periodic benefit costs



(790)



(760)

Interest expense



(117,983)



(105,111)

Pretax earnings



420,397



487,879

Income tax expense



(100,717)



(117,853)

Earnings available to common shareholders

$

319,680

$

370,026

Basic and diluted earnings per common share

$

16.31

$

18.89

Weighted average common shares outstanding: Basic and diluted



19,602,484



19,591,282

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE

As of April 1, 2019, we adopted the new accounting standard for leases. Part of this adoption resulted in approximately $1 billion of property, plant and equipment, net ("PPE") being reclassed to Right-of-Use Assets - Financing, net ("ROU-Financing"). As of December 31, 2019, the balance of ROU-Financing also included the rental equipment purchased under new financing liability leases during the first nine months of fiscal 2020. The table below shows adjusted property, plant and equipment, net as of December 31, 2019, by including the ROU-Financing to help compare our PPE assets with our March 2019 fiscal year end. The assets included in ROU-Financing are not a true book value as some of the assets are recorded at between 70% and 100% of value based on the lease agreement.













December 31,

















2019









December 31,



ROU

Assets



Property,

Plant and

Equipment



March 31,





2019



Financing



Adjusted



2019





(Unaudited)







(In thousands)



















Property, plant and equipment, at cost

















Land

$

1,018,010

$

-

$

1,018,010

$

976,454

Buildings and improvements



4,522,855



-



4,522,855



4,003,726

Furniture and equipment



733,063



27,309



760,372



689,780

Rental trailers and other rental equipment



511,872



117,987



629,859



590,039

Rental trucks



3,454,759



1,746,036



5,200,795



4,762,028

Right-of-use assets, gross



10,240,559



1,891,332



12,131,891



11,022,027

Less: Accumulated depreciation



(2,640,940)



(760,859)



(3,401,799)



(3,088,056)

Total property, plant and equipment, net

$

7,599,619

$

1,130,473

$

8,730,092

$

7,933,971

 

Cision View original content:http://www.prnewswire.com/news-releases/amerco-reports-third-quarter-fiscal-2020-financial-results-300999773.html

SOURCE AMERCO

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