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AMERCO Reports First Quarter Fiscal 2019 Financial Results

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AMERCO Reports First Quarter Fiscal 2019 Financial Results

PR Newswire

RENO, Nev., Aug. 8, 2018 /PRNewswire/ -- AMERCO (NASDAQ: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 common shareholders for its first quarter ended June 30, 2018, of $127.8 million, or $6.53 per share, compared with net earnings of $126.2 million, or $6.44 per share, for the same period last year.

"Increased revenue for the quarter was driven by more transactions in our moving business and increased rooms rented in our self-storage portfolio compared to this period last year," stated Joe Shoen, chairman of AMERCO. "I continue to work on repair expense.  We are not there yet."

Highlights of First Quarter Fiscal 2019 Results

  • Self-moving equipment rental revenues increased $46.7 million, or 7.0% for the first quarter of fiscal 2019 compared with the first quarter of fiscal 2018. One-way and in-town transactions both increased leading to the improved revenue results. Sales of our Safemove and related protection packages contributed to the revenue growth. Compared with the same period last year, we increased the number of retail locations, independent dealers, box trucks, trailers and towing devices in the rental fleet.
  • Self-storage revenues increased $9.5 million, or 12.4% for the first quarter of fiscal 2019 compared with the first quarter of fiscal 2018. The average monthly amount of occupied square feet increased by 10.7% during the first quarter of fiscal 2019 compared with the same period last year. Over the last twelve months, we have added approximately 4.3 million net rentable square feet to the self-storage portfolio with approximately 1.4 million of that coming on during the first quarter. Average monthly occupancy throughout the first quarter of fiscal 2019 for the entire storage portfolio was 70%. Of this amount, facilities open for more than three years averaged 84% while facilities open less than three years averaged 42%.
  • For the first quarter of fiscal 2019 compared with the first quarter of fiscal 2018, depreciation, net of gains and losses on sales increased $0.1 million. Depreciation expense on the rental equipment fleet increased $7.2 million primarily due to a larger fleet. Gains on the sales of rental trucks increased $11.2 million. We sold more used trucks and the average sales proceeds per trucks were nominally better in the first quarter of fiscal 2019, compare with the prior year period. All other depreciation increased $4.1 million from the increase in new moving and storage locations.
  • For the first quarter of fiscal 2019 compared with the first quarter of fiscal 2018 gross truck and trailer capital expenditures were approximately $440 million compared with approximately $396 million. Proceeds from sales of rental equipment were $187 million compared with $140 million. Spending on real estate related acquisitions and projects were approximately $219 million compared with $143 million, respectively.
  • Fleet maintenance and repair costs increased $40.8 million in the first quarter of fiscal 2019 compared with the same period last year. Higher repair and maintenance spending was primarily associated with the portion of the fleet nearing resale.
  • Operating earnings at our Moving and Storage operating segment decreased $20.3 million compared with the same period last year. Total revenues climbed $65.4 million and total costs and expenses increased $85.7 million.
  • The effective federal income tax rate for first quarter of fiscal 2019 benefited from the Tax Reform Act. Had this rate been in effective for the first quarter of fiscal 2018 it would have increased earnings by $23.9 million or $1.22 per share, to $150.1 million, or $7.66 per share for the quarter.
  • Cash and credit availability at the Moving and Storage segment was $838.3 million at June 30, 2018 compared with $882.0 million at March 31, 2018.
  • On June 6, 2018, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on June 21, 2018. The dividend was paid on July 5, 2018.
  • We are holding our 12th Annual Virtual Analyst and Investor meeting on Thursday, August 23, 2018 at 11:00 a.m. Arizona Time (2:00 p.m. Eastern). This is an opportunity to interact directly with Company representatives through a live video webcast on amerco.com. A brief presentation by the Company will be followed by a question and answer session.

AMERCO will hold its investor call for the first quarter of fiscal 2019 on Thursday, August 9, 2018, at 8 a.m. Arizona Time (11 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 June 30, 2018, 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 first quarter of fiscal 2019 and 2018.



Quarter Ended June 30,



2018


2017



(Unaudited)



(In thousands)

 Self-moving equipment rentals

$

716,602

$

669,858

 Self-storage revenues


86,212


76,718

 Self-moving and self-storage product and service sales


79,241


78,911

 Property management fees


7,416


6,762

 Life insurance premiums


36,888


39,091

 Property and casualty insurance premiums


12,781


11,815

 Net investment and interest income


24,605


27,217

 Other revenue


55,832


47,553

 Consolidated revenue

$

1,019,577

$

957,925

Listed below are revenues and earnings from operations at each of our operating segments for the first quarter of fiscal 2019 and 2018.



Quarter Ended June 30,



2018


2017



(Unaudited)



(In thousands)

 Moving and storage





 Revenues

$

947,885

$

882,527

 Earnings from operations before equity in earnings of subsidiaries


200,395


220,740

 Property and casualty insurance  





 Revenues


15,889


16,106

 Earnings from operations


2,713


5,436

 Life insurance   





 Revenues


57,863


60,656

 Earnings from operations


1,881


3,436

 Eliminations





 Revenues


(2,060)


(1,364)

 Earnings from operations before equity in earnings of subsidiaries


(285)


(349)

 Consolidated Results





 Revenues


1,019,577


957,925

 Earnings from operations


204,704


229,263

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 June 30,



2018


2017



(In thousands, except occupancy rate)

Room count as of June 30


383


328

Square footage as of June 30


32,394


28,044

Average monthly number of rooms occupied


262


237

Average monthly occupancy rate based on room count


69.6%


73.0%

Average monthly square footage occupied


23,666


21,383

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS








June 30,


March 31,



2018


2018



(Unaudited)





(In thousands)

ASSETS





Cash and cash equivalents

$

650,339

$

759,388

Reinsurance recoverables and trade receivables, net


207,987


193,538

Inventories and parts, net


94,901


89,877

Prepaid expenses


183,536


166,129

Investments, fixed maturities and marketable equities


1,950,876


1,919,860

Investments, other


396,622


399,064

Deferred policy acquisition costs, net


134,133


124,767

Other assets


248,320


244,782

Related party assets


30,486


33,276



3,897,200


3,930,681

Property, plant and equipment, at cost:





   Land


849,042


827,649

   Buildings and improvements


3,331,918


3,140,713

   Furniture and equipment


641,730


632,803

   Rental trailers and other rental equipment


547,291


545,968

   Rental trucks


4,533,758


4,390,750



9,903,739


9,537,883

Less: Accumulated depreciation


(2,799,455)


(2,721,142)

   Total property, plant and equipment


7,104,284


6,816,741

Total assets

$

11,001,484

$

10,747,422

LIABILITIES AND STOCKHOLDERS' EQUITY





Liabilities:





   Accounts payable and accrued expenses

$

518,033

$

511,115

   Notes, loans and leases payable, net


3,586,127


3,513,076

   Policy benefits and losses, claims and loss expenses payable


1,252,810


1,248,033

   Liabilities from investment contracts


1,409,705


1,364,066

   Other policyholders' funds and liabilities


9,857


10,040

   Deferred income


41,963


34,276

   Deferred income taxes, net


686,844


658,108

Total liabilities


7,505,339


7,338,714






Common stock


10,497


10,497

Additional paid-in capital


452,862


452,746

Accumulated other comprehensive loss


(45,966)


(4,623)

Retained earnings


3,763,339


3,635,561

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


(6,937)


(7,823)

Total stockholders' equity


3,496,145


3,408,708

Total liabilities and stockholders' equity

$

11,001,484

$

10,747,422

 

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS





Quarter Ended June 30,



2018


2017



(In thousands, except share and per share data)



(Unaudited)

Revenues:





Self-moving equipment rentals

$

716,602

$

669,858

Self-storage revenues


86,212


76,718

Self-moving and self-storage products and service sales


79,241


78,911

Property management fees


7,416


6,762

Life insurance premiums


36,888


39,091

Property and casualty insurance premiums


12,781


11,815

Net investment and interest income


24,605


27,217

Other revenue


55,832


47,553

Total revenues


1,019,577


957,925






Costs and expenses:





Operating expenses


496,554


416,692

Commission expenses


79,257


75,365

Cost of sales


49,881


47,595

Benefits and losses


48,554


47,720

Amortization of deferred policy acquisition costs


6,031


6,321

Lease expense


8,169


8,287

Depreciation, net of gains on disposals


126,427


126,335

Net losses on real estate


-


347

Total costs and expenses


814,873


728,662






Earnings from operations


204,704


229,263

Other components of net periodic benefit costs


(253)


(232)

Interest expense


(35,254)


(30,345)

Pretax earnings


169,197


198,686

Income tax expense


(41,348)


(72,479)

Earnings available to common shareholders

$

127,849

$

126,207

Basic and diluted earnings per common share

$

6.53

$

6.44

Weighted average common shares outstanding: Basic and diluted


19,590,585


19,587,891






 

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE






Quarter Ended



June 30, 2017



(Unaudited)

(In thousands, except share and per share amounts)






AMERCO and Consolidated Subsidiaries



Earnings per common share: basic and diluted

$

6.44

Tax Reform Act adjustment, per common share basic and diluted


1.22

Earnings per common share: basic and diluted before Tax Reform Act adjustment

$

7.66




Tax Reform Act adjustment

$

23,925

Tax Reform Act adjustment, per common share basic and diluted

$

1.22

Weighted average shares outstanding: basic and diluted


19,587,891

 

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SOURCE AMERCO

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