AMERCO REPORTS FIRST QUARTER FISCAL 2023 FINANCIAL RESULTS

Rhea-AI Summary

AMERCO (Nasdaq: UHAL) reported net earnings of $334 million, or $17.03 per share, for Q1 fiscal 2023, down from $345.2 million, or $17.60 per share, year-over-year. Self-moving equipment rental revenues increased by $55.4 million, or 5.4%, and self-storage revenues rose by $35.8 million, or 26%. Occupancy rates improved, with a 19% increase in occupied units. However, operating earnings decreased by $1.4 million due to rising costs. Cash and credit availability in the Moving and Storage segment stood at $3.1 billion, reflecting strong liquidity.

Positive

• Self-moving equipment rental revenues increased by $55.4 million, or 5.4%.
• Self-storage revenues rose by $35.8 million, or 26%.
• 19% increase in average number of occupied self-storage units.
• Cash and credit availability increased to $3,087.5 million.

Negative

• Net earnings decreased from $345.2 million to $334 million.
• Operating earnings declined by $1.4 million despite increased total revenues.
• Fleet maintenance and repair costs surged by $32.1 million.

RENO, Nev., August 3, 2022 /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, 2022, of $334.0 million, or $17.03 per share, compared with net earnings of $345.2 million, or $17.60 per share, for the same period last year.

"Customers have choices. We are doing our best to hang on to every customer and serve them well," stated Joe Shoen, chairman of AMERCO. "We are watching costs closely. We are still a long way off from normalizing our rental equipment investments."

Highlights of First Quarter Fiscal 2023 Results

• Self-moving equipment rental revenues increased $55.4 million, or 5.4% for the first quarter of fiscal 2023 compared with the first quarter of fiscal 2022. Revenue per transaction for our In-Town and one-way markets increased. Compared to the same period last year, we increased the number of retail locations, independent dealers, trucks, trailers and towing devices in the rental fleet.
  
  
  
• Self-storage revenues increased $35.8 million, or 26.0% for the first quarter of fiscal 2023 compared with the first quarter of fiscal 2022. The average monthly number of occupied units during the quarter increased by 19%, or 81,900 units, compared to the same quarter last year. Our reported occupancy of all properties regardless of length of time in the portfolio increased 5% to 85% for the first quarter. The occupancy ratio for the subset of these properties that have been stabilized at 80% for the last 24 months increased 1% to 98% during the quarter. The growth in revenues and square feet rented comes from a combination of occupancy gains at existing locations, the addition of new capacity to the portfolio and from an improvement in average revenue per occupied foot. Over the last twelve months, we have added approximately 5.0 million net rentable square feet to the self-storage portfolio with approximately 1.5 million square feet of that coming online during the first quarter of fiscal 2023.
  
  
  
• Sales of self-moving and self-storage products and services increased $4.5 million, or 4.3% compared with the first quarter of fiscal 2022 due to increased sales of hitches, moving supplies and propane.
  
  
  
• For the first quarter of fiscal 2023 compared with the first quarter of fiscal 2022, depreciation, net of gains on sales decreased $7.9 million. Depreciation expense on the rental equipment fleet decreased $0.1 million to $126.5 million. Net gains on the sales of rental trucks increased $14.0 million from an increase in resale values. All other depreciation increased $6.2 million to $51.6 million.
  
  
  
• For the first quarter of fiscal 2023 compared with the first quarter of fiscal 2022 gross rental equipment capital expenditures were approximately $351 million compared with approximately $310 million. Proceeds from sales of rental equipment were $156 million compared with $176 million. Spending on real estate related acquisitions and development were approximately $278 million compared with $184 million, respectively.
  
  
  
• Fleet maintenance and repair costs increased $32.1 million in the first quarter of fiscal 2023 compared with the same period last year due to preventative maintenance resulting from higher fleet activity combined with a slowdown in the rotation of new equipment into the fleet and older equipment out of the fleet. The addition of new equipment has been affected by delays at our original equipment manufacturers.
  
  
  
• Operating earnings at our Moving and Storage operating segment decreased $1.4 million compared with the same period last year. Total revenues increased $130.3 million and total costs and expenses increased $131.7 million.
  
  
  
• Cash and credit availability at the Moving and Storage segment was $3,087.5 million at June 30, 2022 compared with $2,723.2 million at March 31, 2022.
  
  
  
• We are holding our 16^th Annual Virtual Analyst and Investor meeting on Thursday, August 18, 2022 at 11 a.m. Arizona Time (2 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 2023 on Thursday, August 4, 2022, 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.

About U-Haul

Since 1945, U-Haul has been the No. 1 choice of do-it-yourself movers, with a network of more than 23,000 locations across all 50 states and 10 Canadian provinces. U-Haul Truck Share 24/7 offers secure access to U-Haul trucks every hour of every day through the customer dispatch option on their smartphones and our proprietary Live Verify technology. Our customers' patronage has enabled the U-Haul fleet to grow to approximately 186,000 trucks, 128,000 trailers and 46,000 towing devices. U-Haul is the third largest self-storage operator in North America and offers 895,000 rentable storage units and 76.6 million square feet of self-storage space at owned and managed facilities. U-Haul is the largest retailer of propane in the U.S., and continues to be the largest installer of permanent trailer hitches in the automotive aftermarket industry. U-Haul has been recognized repeatedly as a leading "Best for Vets" employer and was recently named one of the 15 Healthiest Workplaces in America.

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, 2022, 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 2023 and 2022.

		Quarter Ended June 30,
		2022		2021
		(Unaudited)
		(In thousands)
Self-moving equipment rentals	$	1,090,775	$	1,035,377
Self-storage revenues		173,177		137,393
Self-moving and self-storage product and service sales		109,351		104,885
Property management fees		9,139		8,449
Life insurance premiums		25,781		28,705
Property and casualty insurance premiums		19,972		16,869
Net investment and interest income		33,573		34,999
Other revenue		136,072		106,179
Consolidated revenue	$	1,597,840	$	1,472,856

 

Listed below are revenues and earnings from operations at each of our operating segments for the first quarter of fiscal 2023 and 2022.

		Quarter Ended June 30,
		2022		2021
		(Unaudited)
		(In thousands)
Moving and storage
Revenues	$	1,523,598	$	1,393,254
Earnings from operations before equity in earnings of subsidiaries		481,617		482,995
Property and casualty insurance
Revenues		23,082		23,456
Earnings from operations		8,351		9,232
Life insurance
Revenues		54,103		58,659
Earnings from operations		1,573		2,366
Eliminations
Revenues		(2,943)		(2,513)
Earnings from operations before equity in earnings of subsidiaries		(382)		(385)
Consolidated Results
Revenues		1,597,840		1,472,856
Earnings from operations		491,159		494,208

 

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,
		2022		2021
		(Unaudited)
		(In thousands, except occupancy rate)
Unit count as of June 30		620		553
Square footage as of June 30		51,845		46,847
Average monthly number of units occupied		518		436
Average monthly occupancy rate based on unit count		84.5 %		79.7 %
Average monthly square footage occupied		44,847		38,671

 

AMERCO AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30,		March 31,
		2022		2022
		(Unaudited)
		(In thousands)
ASSETS
Cash and cash equivalents	$	3,098,271	$	2,704,137
Reinsurance recoverables and trade receivables, net		219,574		229,343
Inventories and parts, net		164,579		158,888
Prepaid expenses		231,714		236,915
Investments, fixed maturities and marketable equities		2,669,986		2,893,399
Investments, other		557,124		543,755
Deferred policy acquisition costs, net		129,568		103,828
Other assets		53,477		60,409
Right of use assets – financing, net		568,223		620,824
Right of use assets – operating, net		72,538		74,382
Related party assets		45,190		47,851
		7,810,244		7,673,731
Property, plant and equipment, at cost:
Land		1,354,587		1,283,142
Buildings and improvements		6,154,373		5,974,639
Furniture and equipment		858,094		846,132
Rental trailers and other rental equipment		671,880		615,679
Rental trucks		4,873,554		4,638,814
		13,912,488		13,358,406
Less: Accumulated depreciation		(3,891,128)		(3,732,556)
Total property, plant and equipment, net		10,021,360		9,625,850
Total assets	$	17,831,604	$	17,299,581
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses	$	722,617	$	677,785
Notes, loans and finance leases payable, net		6,232,564		6,022,497
Operating lease liabilities		72,277		74,197
Policy benefits and losses, claims and loss expenses payable		988,030		978,254
Liabilities from investment contracts		2,374,250		2,336,238
Other policyholders' funds and liabilities		11,999		10,812
Deferred income		63,647		49,157
Deferred income taxes, net		1,292,369		1,265,358
Total liabilities		11,757,753		11,414,298
Common stock		10,497		10,497
Additional paid-in capital		453,819		453,819
Accumulated other comprehensive income (loss)		(89,246)		46,384
Retained earnings		6,376,431		6,052,233
Cost of common stock in treasury, net		(525,653)		(525,653)
Cost of preferred stock in treasury, net		(151,997)		(151,997)
Total stockholders' equity		6,073,851		5,885,283
Total liabilities and stockholders' equity	$	17,831,604	$	17,299,581

 

AMERCO AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Quarter Ended June 30,
		2022		2021
		(Unaudited)
		(In thousands, except share and per share data)
Revenues:
Self-moving equipment rentals	$	1,090,775	$	1,035,377
Self-storage revenues		173,177		137,393
Self-moving and self-storage products and service sales		109,351		104,885
Property management fees		9,139		8,449
Life insurance premiums		25,781		28,705
Property and casualty insurance premiums		19,972		16,869
Net investment and interest income		33,573		34,999
Other revenue		136,072		106,179
Total revenues		1,597,840		1,472,856
Costs and expenses:
Operating expenses		733,167		614,529
Commission expenses		118,493		113,149
Cost of sales		79,671		69,915
Benefits and losses		44,100		47,298
Amortization of deferred policy acquisition costs		7,672		8,823
Lease expense		7,475		7,647
Depreciation, net of gains on disposals		113,796		121,717
Net (gains) losses on disposal of real estate		2,307		(4,430)
Total costs and expenses		1,106,681		978,648
Earnings from operations		491,159		494,208
Other components of net periodic benefit costs		(304)		(280)
Interest expense		(49,799)		(39,178)
Pretax earnings		441,056		454,750
Income tax expense		(107,054)		(109,575)
Earnings available to common stockholders	$	334,002	$	345,175
Basic and diluted earnings per common stock	$	17.03	$	17.60
Weighted average common stock outstanding: Basic and diluted		19,607,788		19,607,788

 

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, 2022, the balance of ROU-financing also includes the rental equipment purchased under new financing liability leases during fiscal 2023. The tables below show adjusted PPE as of June 30, 2022 and March 31, 2022, by including the ROU-financing. 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.

 

						June 30,		March 31,
						2022		2022
		June 30,		ROU Assets		Property, Plant and Equipment		Property, Plant and Equipment
		2022		Financing		Adjusted		Adjusted
		(Unaudited)
		(In thousands)
Property, plant and equipment, at cost
Land	$	1,354,587	$	-	$	1,354,587	$	1,283,142
Buildings and improvements		6,154,373		-		6,154,373		5,974,639
Furniture and equipment		858,094		14,731		872,825		860,863
Rental trailers and other rental equipment		671,880		159,618		831,498		785,193
Rental trucks		4,873,554		1,044,124		5,917,678		5,753,062
Subtotal		13,912,488		1,218,473		15,130,961		14,656,899
Less: Accumulated depreciation		(3,891,128)		(650,250)		(4,541,378)		(4,410,225)
Total property, plant and equipment, net	$	10,021,360	$	568,223	$	10,589,583	$	10,246,674

 

					March 31,
					2022
		March 31,		ROU Assets	Property, Plant and Equipment
		2022		Financing	Adjusted
		(In thousands)
Property, plant and equipment, at cost
Land	$	1,283,142	$	-	$	1,283,142
Buildings and improvements		5,974,639		-		5,974,639
Furniture and equipment		846,132		14,731		860,863
Rental trailers and other rental equipment		615,679		169,514		785,193
Rental trucks		4,638,814		1,114,248		5,753,062
Subtotal		13,358,406		1,298,493		14,656,899
Less: Accumulated depreciation		(3,732,556)		(677,669)		(4,410,225)
Total property, plant and equipment, net	$	9,625,850	$	620,824	$	10,246,674

 

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SOURCE AMERCO

FAQ

What were AMERCO's earnings for Q1 fiscal 2023?

AMERCO reported net earnings of $334 million, or $17.03 per share, for Q1 fiscal 2023.

How did UHAL's self-storage revenues perform in Q1 fiscal 2023?

Self-storage revenues increased by $35.8 million, or 26%, compared to the same period last year.

What factors contributed to the decline in AMERCO's operating earnings?

Operating earnings decreased by $1.4 million due to a rise in total costs and expenses, which outpaced revenue growth.

What is the cash and credit availability for AMERCO's Moving and Storage segment?

As of June 30, 2022, cash and credit availability stood at $3,087.5 million.

When will AMERCO hold its investor call for Q1 fiscal 2023?

AMERCO's investor call for Q1 fiscal 2023 is scheduled for August 4, 2022, at 8 a.m. Arizona Time.