PR Newswire | Aug 5, 2020 04:10PM EDT

08/05 15:10 CDT

AMERCO Reports First Quarter Fiscal 2021 Financial Results RENO, Nev., Aug. 5, 2020

RENO, Nev., Aug. 5, 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 common shareholders for its first quarter ended June 30, 2020, of $87.7 million, or $4.47 per share, compared with net earnings of $132.4 million, or $6.76 per share, for the same period last year.

"Customer demand for U-Haul products and services has rebounded as society learns to cope with the effects of COVID-19," stated Joe Shoen, chairman of AMERCO. "As essential critical workers, the U-Haul team has stood tall and come through for the customer."

Highlights of First Quarter Fiscal 2021 Results

* Self-moving equipment rental revenues decreased $94.3 million, or 12.6% for the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020. Either through force of government or personal caution, self-moving rental activity decreased as a result of COVID-19 during the first quarter of fiscal 2021. The decline in equipment rental revenues, as compared to the same period the previous year, did improve throughout the quarter. April, May and June revenues were down approximately 30%, 8% and 4%, 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 $10.7 million, or 10.9% for the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020. The average number of units occupied during the quarter increased by 15%, or 44,000 compared to the same quarter 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 have added approximately 5.2 million net rentable square feet to the self-storage portfolio with approximately 1.3 million square feet of that coming online during the first quarter. * Sales of self-moving and self-storage products and services increased $11.3 million, or 14.2% compared with the first quarter of fiscal 2020 due to increased sales of hitches, moving supplies and propane. * For the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020, depreciation, net of gains on sales increased $25.1 million. Depreciation expense on the rental equipment fleet increased $2.5 million to $124.9 million. Net gains on the sales of rental trucks decreased $15.6 million from a reduction in auction activity due to COVID-19. All other depreciation increased $7.0 million to $41.9 million from the increase in new moving and storage locations. Net gains on disposal of real estate decreased $1.4 million from the condemnation of a property in the first quarter of fiscal 2020. * For the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020 gross truck and trailer capital expenditures were approximately $123 million compared with approximately $561 million. Proceeds from sales of rental equipment were $74 million compared with $158 million. Spending on real estate related acquisitions and development were approximately $103 million compared with $218 million, respectively. We will continue to calibrate our capital spending based in part upon the evolving effects of COVID-19. * Fleet maintenance and repair costs decreased $27.8 million in the first quarter of fiscal 2021 compared with the same period last year. * Operating earnings at our Moving and Storage operating segment decreased $50.2 million compared with the same period last year. Total revenues decreased $74.1 million and total costs and expenses decreased $23.9 million. * Cash and credit availability at the Moving and Storage segment was $840.9 million at June 30, 2020 compared with $498.1 million at March 31, 2020. * We are holding our 14th Annual Virtual Analyst and Investor meeting on Thursday, August 20, 2020 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 2021 on Thursday, August 6, 2020, 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 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 June 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 first quarter of fiscal 2021 and 2020.

Quarter Ended June 30,

2020 2019

(Unaudited)

(In thousands)

Self-moving equipment rentals $ 654,285 $ 748,596

Self-storage revenues 108,955 98,274

Self-moving and self-storage product and service sales 91,350 80,026

Property management fees 7,347 7,156

Life insurance premiums 30,908 32,710

Property and casualty insurance premiums 13,734 13,424

Net investment and interest income 16,982 35,749

Other revenue 63,676 63,314

Consolidated revenue $ 987,237 $ 1,079,249

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

Quarter Ended June 30,

2020 2019

(Unaudited)

(In thousands)

Moving and storage

Revenues $ 926,300 $ 1,000,398

Earnings from operations before equity in earnings of subsidiaries 151,661 201,896

Property and casualty insurance

Revenues 13,634 20,305

Earnings from operations 778 8,466

Life insurance

Revenues 49,653 60,321

Earnings from operations 1,920 3,781

Eliminations

Revenues (2,350) (1,775)

Earnings from operations before equity in earnings of subsidiaries (273) (278)

Consolidated Results

Revenues 987,237 1,079,249

Earnings from operations 154,086 213,865

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,

2020 2019

(Unaudited)

(In thousands, except occupancy rate)

Unit count as of June 30 516 452

Square footage as of June 30 43,393 38,175

Average monthly number of units occupied 347 302

Average monthly occupancy rate based on unit count 67.6% 68.4%

Average monthly square footage occupied 31,010 27,421

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, March 31,

2020 2020

(Unaudited)

(In thousands)

ASSETS

Cash and cash equivalents $ 825,074 $ 494,352

Reinsurance recoverables and trade receivables, net 208,371 186,672

Inventories and parts, net 100,835 101,083

Prepaid expenses 585,879 562,904

Investments, fixed maturities and marketable equities 2,393,522 2,492,738

Investments, other 395,123 360,373

Deferred policy acquisition costs, net 117,123 103,118

Other assets 70,415 71,956

Right of use assets - financing, net 1,026,928 1,080,353

Right of use assets - operating 106,682 106,631

Related party assets 9,406 34,784

5,839,358 5,594,964

Property, plant and equipment, at cost:

Land 1,043,952 1,032,945

Buildings and improvements 4,752,816 4,663,461

Furniture and equipment 754,641 752,363

Rental trailers and other rental equipment 513,623 511,520

Rental trucks 3,619,718 3,595,933

10,684,750 10,556,222

Less: Accumulated depreciation (2,811,749) (2,713,162)

Total property, plant and equipment, net 7,873,001 7,843,060

Total assets $ 13,712,359 $ 13,438,024

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Accounts payable and accrued expenses $ 582,356 $ 554,353

Notes, loans and finance/capital leases payable, net 4,777,963 4,621,291

Operating lease liability 106,614 106,443

Policy benefits and losses, claims and loss expenses payable 998,762 997,647

Liabilities from investment contracts 1,833,617 1,802,217

Other policyholders' funds and liabilities 6,764 10,190

Deferred income 42,789 31,620

Deferred income taxes, net 1,106,312 1,093,543

Total liabilities 9,455,177 9,217,304

Common stock 10,497 10,497

Additional paid-in capital 453,819 453,819

Accumulated other comprehensive income (loss) (13,732) 34,652

Retained earnings 4,484,248 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 4,257,182 4,220,720

Total liabilities and stockholders' equity $ 13,712,359 $ 13,438,024

AMERCO AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended June 30,

2020 2019

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals $ 654,285 $ 748,596

Self-storage revenues 108,955 98,274

Self-moving and self-storage products and service sales 91,350 80,026

Property management fees 7,347 7,156

Life insurance premiums 30,908 32,710

Property and casualty insurance premiums 13,734 13,424

Net investment and interest income 16,982 35,749

Other revenue 63,676 63,314

Total revenues 987,237 1,079,249

Costs and expenses:

Operating expenses 492,662 534,472

Commission expenses 69,175 80,899

Cost of sales 52,831 48,929

Benefits and losses 39,577 49,006

Amortization of deferred policy acquisition costs 6,888 6,064

Lease expense 6,603 7,036

Depreciation, net of gains on disposals 165,671 140,600

Net gains on disposal of real estate (256) (1,622)

Total costs and expenses 833,151 865,384

Earnings from operations 154,086 213,865

Other components of net periodic benefit costs (247) (263)

Interest expense (39,521) (38,888)

Pretax earnings 114,318 174,714

Income tax expense (26,592) (42,292)

Earnings available to common stockholders $ 87,726 $ 132,422

Basic and diluted earnings per common stock $ 4.47 $ 6.76

Weighted average common stock outstanding: Basic and diluted 19,607,788 19,597,697

NON-GAAP DISCLOSURE

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 June 30, 2020, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during the first quarter. The table below shows adjusted PPE as of June 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.

June 30, March 31,

2020 2020

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

2020 Financing Adjusted Adjusted

(Unaudited)

(In thousands)

Property, plant and equipment, at cost

Land $ 1,043,952 $ - $ 1,043,952 $ 1,032,945

Buildings and improvements 4,752,816 - 4,752,816 4,663,461

Furniture and equipment 754,641 21,111 775,752 773,476

Rental trailers and other rental equipment 513,623 115,967 629,590 627,592

Rental trucks 3,619,718 1,697,339 5,317,057 5,334,014

Right-of-use assets, gross 10,684,750 1,834,417 12,519,167 12,431,488

Less: Accumulated depreciation (2,811,749) (807,489) (3,619,238) (3,508,075)

Total property, plant and equipment, net $ 7,873,001 $ 1,026,928 $ 8,899,929 $ 8,923,413

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SOURCE AMERCO