PR Newswire | Nov 4, 2020 04:31PM EST

11/04 15:30 CST

Amerco Reports Second Quarter Fiscal 2021 Financial Results RENO, Nev., Nov. 4, 2020

RENO, Nev., Nov. 4, 2020 /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 shareholders for its second quarter ended September 30, 2020, of $266.4 million, or $13.58 per share, compared with net earnings of $156.3 million, or $7.97 per share, for the same period last year.

For the six-month period ended September 30, 2020, net earnings available to shareholders were $354.1 million, or $18.06 per share, compared with net earnings of $288.7 million, or $14.73 per share, for the same period last year.

"We drastically cut rental equipment additions in March as OEM plants closed and we prepared for the worst. Likewise, we cut real estate acquisition and development investment. It will take about two years to normalize rental equipment investment, probably longer on real estate investment," stated Joe Shoen, chairman of AMERCO. "In both self-storage and self-move, we are in very competitive markets. This remains a close game. We are committed to winning. Over the last 7 months, we have simply outworked our peer group. No one knows what next year will bring."

Highlights of Second Quarter Fiscal 2021 Results

* Self-moving equipment rental revenues increased $126.7 million or 16% during the second quarter of fiscal 2021, compared with the second quarter of fiscal 2020. As government-imposed restrictions on public activity have lessened and customer behavior has evolved, revenue and transactions for both our In-town and one-way markets improved for trucks and trailers. For July, August and September revenues increased by approximately 11%, 14% and 24%, respectively. Compared to the same period last year, we increased the number of retail locations, independent dealers, box trucks and trailers in the rental fleet. * Self-storage revenues increased $10.3 million or 10% during the second quarter of fiscal 2021, compared with the second quarter of fiscal 2020. The average monthly number of occupied units increased by 15%, or 50,000 units, during the second quarter of fiscal 2021 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of occupancy gains at existing locations and from the addition of new capacity to the portfolio. Over the last twelve months, we added approximately 4.4 million net rentable square feet, or an 11% increase, with approximately 0.6 million of that coming on during the second quarter of fiscal 2021. * Sales of self-moving and self-storage products and services increased $25.5 million, or 35% compared with the second quarter of fiscal 2020 due to increased sales of hitches, moving supplies and propane. * For the second quarter of fiscal 2021 compared with the second quarter of fiscal 2020, depreciation, net of gains and losses on sales decreased $14.1 million. Depreciation expense on the rental equipment fleet decreased $10.5 million as new truck production has been slowed by COVID-19 related delays at manufacturers, while gains on the sales of rental trucks increased $10.1 million from higher resale values and additional box truck sales. All other depreciation increased $6.5 million from the increase in new moving and storage locations. * For the first six months of fiscal 2021 and fiscal 2020 gross truck and trailer capital expenditures were approximately $395 million compared with $1,037 million, proceeds from the sales of rental equipment were $310 million compared with $397 million and spending on real estate related acquisitions and projects were approximately $226 million compared with $423 million. * Fleet maintenance and repair costs decreased $6.8 million in the second quarter of fiscal 2021 compared with the same period last year. * Operating earnings at our Moving and Storage operating segment increased $145.0 million in the second quarter of fiscal 2021 compared with the same period last year. Total revenues climbed $175.8 million and total costs and expenses increased $30.8 million. * Cash and credit availability at the Moving and Storage operating segment was $1,293.3 million at September 30, 2020 compared with $498.1 million at March 31, 2020. * On August 20, 2020, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on September 7, 2020. The dividend was paid on September 21, 2020.

AMERCO will hold its investor call for the second quarter of fiscal 2021 on Thursday, November 5, 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 AMERCOAMERCO 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 September 30, 2020, 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 second quarter of fiscal 2021 and 2020.

Quarter Ended September 30,

2020 2019

(Unaudited)

(In thousands)

Self-moving equipment rentals $ 931,030 $ 804,325

Self-storage revenues 115,273 104,965

Self-moving and self-storage product and service sales 98,628 73,121

Property management fees 7,840 7,233

Life insurance premiums 31,057 32,355

Property and casualty insurance premiums 15,869 18,365

Net investment and interest income 33,333 33,098

Other revenue 91,878 76,752

Consolidated revenue $ 1,324,908 $ 1,150,214

Listed below are revenues and earnings from operations at each of our operating segments for the second quarter of fiscal 2021 and 2020.

Quarter Ended September 30,

2020 2019

(Unaudited)

(In thousands)

Moving and storage

Revenues $ 1,245,318 $ 1,069,552

Earnings from operations before equity in earnings of subsidiaries 373,956 228,987

Property and casualty insurance

Revenues 22,673 23,528

Earnings from operations 12,069 9,092

Life insurance

Revenues 59,560 59,859

Earnings from operations 6,040 6,941

Eliminations

Revenues (2,643) (2,725)

Earnings from operations before equity in earnings of subsidiaries (275) (280)

Consolidated Results

Revenues 1,324,908 1,150,214

Earnings from operations 391,790 244,740

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 September 30,

2020 2019

(Unaudited)

(In thousands, except occupancy rate)

Unit count as of September 30 520 471

Square footage as of September 30 43,985 39,629

Average monthly number of units occupied 373 323

Average monthly occupancy rate based on unit count 71.9% 69.5%

Average monthly square footage occupied 33,296 29,200

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2021 and 2020.

Six Months Ended September 30,

2020 2019

(Unaudited)

(In thousands)

Self-moving equipment rentals $ 1,585,315 $ 1,552,921

Self-storage revenues 224,228 203,239

Self-moving and self-storage product and service sales 189,978 153,147

Property management fees 15,187 14,389

Life insurance premiums 61,965 65,065

Property and casualty insurance premiums 29,603 31,789

Net investment and interest income 50,315 68,847

Other revenue 155,554 140,066

Consolidated revenue $ 2,312,145 $ 2,229,463

Listed below are revenues and earnings from operations at each of our operating segments for the first six months of fiscal 2021 and 2020.

Six Months Ended September 30,

2020 2019

(Unaudited)

(In thousands)

Moving and storage

Revenues 2,171,618 2,069,950

Earnings from operations before equity in earnings of subsidiaries 525,617 430,883

Property and casualty insurance

Revenues 36,307 43,833

Earnings from operations 12,847 17,558

Life insurance

Revenues 109,213 120,180

Earnings from operations 7,960 10,722

Eliminations

Revenues (4,993) (4,500)

Earnings from operations before equity in earnings of subsidiaries (548) (558)

Consolidated Results

Revenues 2,312,145 2,229,463

Earnings from operations 545,876 458,605

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:

Six Months Ended September 30,

2020 2019

(Unaudited)

(In thousands, except occupancy rate)

Unit count as of September 30 520 471

Square footage as of September 30 43,985 39,629

Average monthly number of units occupied 360 313

Average monthly occupancy rate based on unit count 69.8% 69.0%

Average monthly square footage occupied 32,153 28,310

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, March 31,

2020 2020

(Unaudited)

(In thousands)

ASSETS

Cash and cash equivalents $ 1,215,568 $ 494,352

Reinsurance recoverables and trade receivables, net 213,397 186,672

Inventories and parts, net 100,595 101,083

Prepaid expenses 447,073 562,904

Investments, fixed maturities and marketable equities 2,495,342 2,492,738

Investments, other 425,527 360,373

Deferred policy acquisition costs, net 93,407 103,118

Other assets 71,314 71,956

Right of use assets - financing, net 970,361 1,080,353

Right of use assets - operating 101,946 106,631

Related party assets 32,397 34,784

6,166,927 5,594,964

Property, plant and equipment, at cost:

Land 1,052,205 1,032,945

Buildings and improvements 4,863,590 4,663,461

Furniture and equipment 767,290 752,363

Rental trailers and other rental equipment 531,465 511,520

Rental trucks 3,644,674 3,595,933

10,859,224 10,556,222

Less: Accumulated depreciation (2,902,673) (2,713,162)

Total property, plant and equipment, net 7,956,551 7,843,060

Total assets $ 14,123,478 $ 13,438,024

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Accounts payable and accrued expenses $ 630,666 $ 554,353

Notes, loans and finance/capital leases payable, net 4,701,225 4,621,291

Operating lease liability 101,976 106,443

Policy benefits and losses, claims and loss expenses payable 1,015,189 997,647

Liabilities from investment contracts 1,838,280 1,802,217

Other policyholders' funds and liabilities 5,426 10,190

Deferred income 41,715 31,620

Deferred income taxes, net 1,183,370 1,093,543

Total liabilities 9,517,847 9,217,304

Common stock 10,497 10,497

Additional paid-in capital 453,819 453,819

Accumulated other comprehensive income 78,156 34,652

Retained earnings 4,740,809 4,399,402

Cost of common stock in treasury, net (525,653) (525,653)

Cost of preferred stock in treasury, net (151,997) (151,997)

Unearned employee stock ownership plan stock - -

Total stockholders' equity 4,605,631 4,220,720

Total liabilities and stockholders' equity $ 14,123,478 $ 13,438,024

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended September 30,

2020 2019

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals $ 931,030 $ 804,325

Self-storage revenues 115,273 104,965

Self-moving and self-storage products and service sales 98,628 73,121

Property management fees 7,840 7,233

Life insurance premiums 31,057 32,355

Property and casualty insurance premiums 15,869 18,365

Net investment and interest income 33,333 33,098

Other revenue 91,878 76,752

Total revenues 1,324,908 1,150,214

Costs and expenses:

Operating expenses 574,083 565,413

Commission expenses 99,365 86,099

Cost of sales 60,933 43,930

Benefits and losses 45,452 45,825

Amortization of deferred policy acquisition costs 5,552 6,515

Lease expense 6,870 6,356

Depreciation, net of gains on disposals 137,438 151,553

Net (gains) losses on real estate 3,425 (217)

Total costs and expenses 933,118 905,474

Earnings from operations 391,790 244,740

Other components of net periodic benefit costs (246) (264)

Interest expense (40,525) (39,122)

Pretax earnings 351,019 205,354

Income tax expense (84,654) (49,028)

Earnings available to common shareholders $ 266,365 $ 156,326

Basic and diluted earnings per common share $ 13.58 $ 7.97

Weighted average common shares outstanding: Basic and diluted 19,607,788 19,602,566

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six Months Ended September 30,

2020 2019

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals $ 1,585,315 $ 1,552,921

Self-storage revenues 224,228 203,239

Self-moving and self-storage products and service sales 189,978 153,147

Property management fees 15,187 14,389

Life insurance premiums 61,965 65,065

Property and casualty insurance premiums 29,603 31,789

Net investment and interest income 50,315 68,847

Other revenue 155,554 140,066

Total revenues 2,312,145 2,229,463

Costs and expenses:

Operating expenses 1,066,745 1,099,885

Commission expenses 168,540 166,998

Cost of sales 113,764 92,859

Benefits and losses 85,029 94,831

Amortization of deferred policy acquisition costs 12,440 12,579

Lease expense 13,473 13,392

Depreciation, net of gains on disposals 303,109 292,153

Net (gains) losses on real estate 3,169 (1,839)

Total costs and expenses 1,766,269 1,770,858

Earnings from operations 545,876 458,605

Other components of net periodic benefit costs (493) (527)

Interest expense (80,046) (78,010)

Pretax earnings 465,337 380,068

Income tax expense (111,246) (91,320)

Earnings available to common shareholders $ 354,091 288,748

Basic and diluted earnings per common share $ 18.06 $ 14.73

Weighted average common shares outstanding: Basic and diluted 19,607,788 19,600,211

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 September 30, 2020, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during the first six months of fiscal 2021. The table below shows adjusted PPE as of September 30, 2020 and March 31, 2020, by including the ROU-financing. The assets included in the ROU-financing is not a true book value as some of the assets are recorded at between 70% and 100% of value based on the lease agreement.

September 30, March 31,

2020 2020

ROU Property, Property, Plant September 30, Assets Plant and Equipment and Equipment

2020 Financing Adjusted Adjusted

(Unaudited)

(In thousands)

Property, plant and equipment, at cost

Land $ 1,052,205 $ - $ 1,052,205 $ 1,032,945

Buildings and improvements 4,863,590 - 4,863,590 4,663,461

Furniture and equipment 767,290 20,965 788,255 773,476

Rental trailers and other rental equipment 531,465 115,875 647,340 627,592

Rental trucks 3,644,674 1,637,456 5,282,130 5,334,014

Right-of-use assets, gross 10,859,224 1,774,296 12,633,520 12,431,488

Less: Accumulated depreciation (2,902,673) (803,935) (3,706,608) (3,508,075)

Total property, plant and equipment, net $ 7,956,551 $ 970,361 $ 8,926,912 $ 8,923,413

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SOURCE AMERCO