AMERCO Reports Second Quarter Fiscal 2020 Financial Results

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November 6, 2019 4:25 PM EST

RENO, Nev., Nov. 6, 2019 /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, 2019, of $156.3 million, or $7.97 per share, compared with net earnings of $163.5 million, or $8.35 per share, for the same period last year.

For the six-month period ended September 30, 2019, net earnings available to shareholders were $288.7 million, or $14.73 per share, compared with net earnings of $291.4 million, or $14.87 per share, for the same period last year.

"We continued to fill self-storage rooms during the quarter while also adding new locations to the portfolio," stated Joe Shoen, chairman of AMERCO. "Growth in the fleet has led to additional depreciation and maintenance costs. We have not realized the truck and trailer revenue we expected from this investment. I am working to resolve this, but improvement will likely come slowly."

Highlights of Second Quarter Fiscal 2020 Results

  • Self-moving equipment rental revenues increased $22.6 million or 3% during the second quarter of fiscal 2020, compared with the second quarter of fiscal 2019 from improvements in both One-way and in-town markets. Compared with the same period last year, we increased the number of Company-owned locations, along with trucks, trailers and towing devices in the rental fleet.
  • Self-storage revenues increased $13.5 million during the second quarter of fiscal 2020, compared with the second quarter of fiscal 2019. The average monthly amount of occupied units increased by 17%, or 47,000 units during the second 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 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 1.5 million of that coming on during the second quarter.
  • For the second quarter of fiscal 2020 compared with the second quarter of fiscal 2019, depreciation, net of gains and losses on sales increased $18.9 million. Depreciation expense on the rental equipment fleet increased $17.1 million primarily due to a larger fleet while gains on the sales of rental trucks increased $6.0 million. All other depreciation increased $7.8 million from the increase in new moving and storage locations.
  • For the first six months of fiscal 2020 and fiscal 2019 gross truck and trailer capital expenditures were approximately $1,037 million compared with $787 million, proceeds from the sales of rental equipment were $397 million compared with $428 million and spending on real estate related acquisitions and projects were approximately $423 million compared with $481 million.
  • Fleet maintenance and repair costs increased $3.9 million in the second quarter of fiscal 2020 compared with the same period last year.
  • Operating earnings at our Moving and Storage operating segment decreased $6.9 million in the second quarter of fiscal 2020 compared with the same period last year. Total revenues climbed $42.6 million and total costs and expenses increased $49.5 million.
  • Cash and credit availability at the Moving and Storage operating segment was $559.0 million at September 30, 2019 compared with $724.5 million at March 31, 2019.
  • On August 22, 2019, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on September 9, 2019. The dividend was paid on September 23, 2019.

AMERCO will hold its investor call for the second quarter of fiscal 2020 on Thursday, November 7, 2019, 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, 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 second quarter of fiscal 2020 and 2019.

Quarter Ended September 30,

2019

2018

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

804,325

$

781,713

Self-storage revenues

104,965

91,493

Self-moving and self-storage product and service sales

73,121

72,913

Property management fees

7,233

7,192

Life insurance premiums

32,355

35,920

Property and casualty insurance premiums

18,365

16,283

Net investment and interest income

33,098

28,227

Other revenue

76,752

70,766

Consolidated revenue

$

1,150,214

$

1,104,507

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

Quarter Ended September 30,

2019

2018

(Unaudited)

(In thousands)

Moving and storage

Revenues

$

1,069,552

$

1,026,934

Earnings from operations before equity in earnings of subsidiaries

228,987

235,874

Property and casualty insurance 

Revenues

23,528

20,522

Earnings from operations

9,092

7,859

Life insurance  

Revenues

59,859

59,612

Earnings from operations

6,941

7,502

Eliminations

Revenues

(2,725)

(2,561)

Earnings from operations before equity in earnings of subsidiaries

(280)

(291)

Consolidated Results

Revenues

1,150,214

1,104,507

Earnings from operations

244,740

250,944

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,

2019

2018

(Unaudited)

(In thousands, except occupancy rate)

Unit count as of September 30

471

398

Square footage as of September 30

39,629

33,553

Average monthly number of units occupied

323

276

Average monthly occupancy rate based on unit count

69.5%

70.6%

Average monthly square footage occupied

29,200

24,867

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

Six Months Ended September 30,

2019

2018

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

1,552,921

$

1,498,315

Self-storage revenues

203,239

177,705

Self-moving and self-storage product and service sales

153,147

152,154

Property management fees

14,389

14,608

Life insurance premiums

65,065

72,808

Property and casualty insurance premiums

31,789

29,064

Net investment and interest income

68,847

52,832

Other revenue

140,066

126,598

Consolidated revenue

$

2,229,463

$

2,124,084

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

Six Months Ended September 30,

2019

2018

(Unaudited)

(In thousands)

Moving and storage

Revenues

2,069,950

1,974,819

Earnings from operations before equity in earnings of subsidiaries

430,883

436,269

Property and casualty insurance 

Revenues

43,833

36,411

Earnings from operations

17,558

10,572

Life insurance  

Revenues

120,180

117,475

Earnings from operations

10,722

9,383

Eliminations

Revenues

(4,500)

(4,621)

Earnings from operations before equity in earnings of subsidiaries

(558)

(576)

Consolidated Results

Revenues

2,229,463

2,124,084

Earnings from operations

458,605

455,648

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,

2019

2018

(Unaudited)

(In thousands, except occupancy rate)

Unit count as of September 30

471

398

Square footage as of September 30

39,629

33,553

Average monthly number of units occupied

313

269

Average monthly occupancy rate based on unit count

69.0%

70.1%

Average monthly square footage occupied

28,310

24,266

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

March 31,

2019

2019

(Unaudited)

(In thousands)

ASSETS

Cash and cash equivalents

$

525,231

$

673,701

Reinsurance recoverables and trade receivables, net

222,481

224,785

Inventories and parts, net

102,357

103,504

Prepaid expenses

194,250

174,100

Investments, fixed maturities and marketable equities

2,413,350

2,235,397

Investments, other

320,992

300,736

Deferred policy acquisition costs, net

111,708

136,276

Other assets

72,432

78,354

Right of use assets – financing, net

1,185,629

-

Right of use assets – operating

105,298

-

Related party assets

12,902

30,889

5,266,630

3,957,742

Property, plant and equipment, at cost:

   Land

1,016,918

976,454

   Buildings and improvements

4,371,637

4,003,726

   Furniture and equipment

716,287

689,780

   Rental trailers and other rental equipment

495,264

590,039

   Rental trucks

3,560,034

4,762,028

10,160,140

11,022,027

Less: Accumulated depreciation

(2,570,568)

(3,088,056)

   Total property, plant and equipment

7,589,572

7,933,971

Total assets

$

12,856,202

$

11,891,713

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

   Accounts payable and accrued expenses

$

546,260

$

556,873

   Notes, loans and leases payable, net

4,497,912

4,163,323

   Operating lease liability

104,832

-

   Policy benefits and losses, claims and loss expenses payable

1,022,134

1,011,183

   Liabilities from investment contracts

1,720,995

1,666,742

   Other policyholders' funds and liabilities

10,911

15,047

   Deferred income

35,926

35,186

   Deferred income taxes, net

859,164

750,970

Total liabilities

8,798,134

8,199,324

Common stock

10,497

10,497

Additional paid-in capital

453,761

453,326

Accumulated other comprehensive income (loss)

17,151

(66,698)

Retained earnings

4,255,906

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

(1,597)

(4,048)

Total stockholders' equity

4,058,068

3,692,389

Total liabilities and stockholders' equity

$

12,856,202

11,891,713

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended September 30,

2019

2018

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

804,325

$

781,713

Self-storage revenues

104,965

91,493

Self-moving and self-storage products and service sales

73,121

72,913

Property management fees

7,233

7,192

Life insurance premiums

32,355

35,920

Property and casualty insurance premiums

18,365

16,283

Net investment and interest income

33,098

28,227

Other revenue

76,752

70,766

     Total revenues

1,150,214

1,104,507

Costs and expenses:

Operating expenses

565,413

529,350

Commission expenses

86,099

85,334

Cost of sales

43,930

46,402

Benefits and losses

45,825

45,773

Amortization of deferred policy acquisition costs

6,515

5,899

Lease expense

6,356

8,170

Depreciation, net of gains on disposals

151,553

132,625

Net (gains) losses on real estate

(217)

10

     Total costs and expenses

905,474

853,563

Earnings from operations

244,740

250,944

Other components of net periodic benefit costs

(264)

(254)

Interest expense

(39,122)

(35,030)

Pretax earnings

205,354

215,660

Income tax expense

(49,028)

(52,118)

Earnings available to common shareholders

$

156,326

$

163,542

Basic and diluted earnings per common share

$

7.97

$

8.35

Weighted average common shares outstanding: Basic and diluted

19,602,566

19,591,312

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six Months Ended September 30,

2019

2018

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

1,552,921

$

1,498,315

Self-storage revenues

203,239

177,705

Self-moving and self-storage products and service sales

153,147

152,154

Property management fees

14,389

14,608

Life insurance premiums

65,065

72,808

Property and casualty insurance premiums

31,789

29,064

Net investment and interest income

68,847

52,832

Other revenue

140,066

126,598

     Total revenues

2,229,463

2,124,084

Costs and expenses:

Operating expenses

1,099,885

1,025,904

Commission expenses

166,998

164,591

Cost of sales

92,859

96,283

Benefits and losses

94,831

94,327

Amortization of deferred policy acquisition costs

12,579

11,930

Lease expense

13,392

16,339

Depreciation, net of gains on disposals

292,153

259,052

Net (gains) losses on real estate

(1,839)

10

     Total costs and expenses

1,770,858

1,668,436

Earnings from operations

458,605

455,648

Other components of net periodic benefit costs

(527)

(507)

Interest expense

(78,010)

(70,284)

Pretax earnings

380,068

384,857

Income tax expense

(91,320)

(93,466)

Earnings available to common shareholders

$

288,748

291,391

Basic and diluted earnings per common share

$

14.73

$

14.87

Weighted average common shares outstanding: Basic and diluted

19,600,211

19,590,946

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, 2019, the balance of ROU-Financing also included the rental equipment purchased under new financing liability leases during the first six months of fiscal 2020. The table below shows adjusted property, plant and equipment, net as of September 30, 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.

September 30,

2019

September 30,

ROUAssets

Property,Plant andEquipment

March 31,

2019

Financing

Adjusted

2019

(Unaudited)

(In thousands)

Property, plant and equipment, at cost

Land

$

1,016,918

$

-

$

1,016,918

$

976,454

Buildings and improvements

4,371,637

-

4,371,637

4,003,726

Furniture and equipment

716,287

27,414

743,701

689,780

Rental trailers and other rental equipment

495,264

125,747

621,011

590,039

Rental trucks

3,560,034

1,759,118

5,319,152

4,762,028

Right-of-use assets, gross

10,160,140

1,912,279

12,072,419

11,022,027

Less: Accumulated depreciation

(2,570,568)

(726,650)

(3,297,218)

(3,088,056)

Total property, plant and equipment, net

$

7,589,572

$

1,185,629

$

8,775,201

$

7,933,971

 

Cision View original content:http://www.prnewswire.com/news-releases/amerco-reports-second-quarter-fiscal-2020-financial-results-300953263.html

SOURCE AMERCO


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