AMERCO Reports Second Quarter Fiscal 2019 Financial Results

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November 7, 2018 4:15 PM EST

RENO, Nev., Nov. 7, 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 shareholders for its second quarter ended September 30, 2018, of $163.5 million, or $8.35 per share, compared with net earnings of $124.6 million, or $6.36 per share, for the same period last year.

For the six-month period ended September 30, 2018, net earnings available to shareholders were $291.4 million, or $14.87 per share, compared with net earnings of $250.8 million, or $12.81 per share, for the same period last year.

"Growth in equipment rental revenue and occupied storage rooms continued during the quarter and we have the capacity for additional improvement," stated Joe Shoen, chairman of AMERCO. "Truck sales are improving, returning some revenue and expense that was in the third quarter last year into this second quarter. Discretionary personnel bonus amounts that were recognized in the second quarter last year have not yet been determined. We have lots of work to do and are about it."

Highlights of Second Quarter Fiscal 2019 Results

  • Self-moving equipment rental revenues increased $41.2 million or 6% during the second quarter of fiscal 2019, compared with the second quarter of fiscal 2018 from improvements in both One-way and in-town markets. 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 Company-owned locations, along with box trucks, trailers and towing devices in the rental fleet.
  • Self-storage revenues increased $11.0 million during the second quarter of fiscal 2019, compared with the second quarter of fiscal 2018. The average monthly amount of occupied square feet increased by 11% during the second quarter of fiscal 2019 compared with the same period last year. The growth in revenues and square feet rented comes from a combination of improved occupancy at existing locations as well as the addition of new facilities to the portfolio. Over the last twelve months, we have added approximately 4.4 million net rentable square feet or a 15% increase to our owned self-storage portfolio with over 1.2 million of that coming on during the second quarter.
  • For the second quarter of fiscal 2019 compared with the second quarter of fiscal 2018, depreciation, net of gains and losses on sales decreased $0.5 million. Depreciation expense on the rental equipment fleet increased $4.3 million primarily due to a larger fleet while gains on the sales of rental trucks increased $7.1 million. We sold more used trucks and the average sales proceeds per trucks were nominally better in the second quarter of fiscal 2019, compared with the prior year period. All other depreciation increased $2.3 million from the increase in new moving and storage locations.
  • For the first six months of fiscal 2019 and fiscal 2018 gross truck and trailer capital expenditures were approximately $787 million compared with $665 million, proceeds from the sales of rental equipment were $428 million compared with $256 million and spending on real estate related acquisitions and projects were approximately $481 million compared with $258 million.
  • Fleet maintenance and repair costs increased $11.8 million in the second quarter of fiscal 2019 compared with the same period last year. While up for the quarter, these costs did decrease year-over-year for the month of September.
  • Operating earnings at our Moving and Storage operating segment increased $18.7 million in the second quarter of fiscal 2019 compared with the same period last year. Total revenues climbed $61.7 million and total costs and expenses increased $43.0 million.
  • The effective federal income tax rate for second quarter of fiscal 2019 benefited from the Tax Reform Act. Had this rate been in effect for the second quarter of fiscal 2018 it would have increased earnings by $25.0 million or $1.28 per share, to $149.7 million, or $7.64 per share for the quarter.
  • Cash and credit availability at the Moving and Storage operating segment was $678.2 million at September 30, 2018 compared with $882.0 million at March 31, 2018.
  • On August 23, 2018, we declared a cash dividend on our Common Stock of $0.50 per share to holders of record on September 10, 2018. The dividend was paid on September 24, 2018.

AMERCO will hold its investor call for the second quarter of fiscal 2019 on Thursday, November 8, 2018, 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, 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 second quarter of fiscal 2019 and 2018.

Quarter Ended September 30,

2018

2017

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

781,713

$

740,558

Self-storage revenues

91,493

80,472

Self-moving and self-storage product and service sales

72,913

73,268

Property management fees

7,192

6,831

Life insurance premiums

35,920

38,862

Property and casualty insurance premiums

16,283

15,026

Net investment and interest income

28,227

26,469

Other revenue

70,766

61,200

Consolidated revenue

$

1,104,507

$

1,042,686

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

Quarter Ended September 30,

2018

2017

(Unaudited)

(In thousands)

Moving and storage

Revenues

$

1,026,934

$

965,208

Earnings from operations before equity in earnings of subsidiaries

235,874

217,162

Property and casualty insurance 

Revenues

20,522

19,199

Earnings from operations

7,859

6,087

Life insurance  

Revenues

59,612

60,430

Earnings from operations

7,502

6,718

Eliminations

Revenues

(2,561)

(2,151)

Earnings from operations before equity in earnings of subsidiaries

(291)

(354)

Consolidated Results

Revenues

1,104,507

1,042,686

Earnings from operations

250,944

229,613

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,

2018

2017

(Unaudited)

(In thousands, except occupancy rate)

Room count as of September 30

398

341

Square footage as of September 30

33,553

29,104

Average monthly number of rooms occupied

276

249

Average monthly occupancy rate based on room count

70.6%

73.9%

Average monthly square footage occupied

24,867

22,408

Listed below on a consolidated basis are revenues for our major product lines for the first six months of fiscal 2019 and 2018.

Six Months Ended September 30,

2018

2017

(Unaudited)

(In thousands)

Self-moving equipment rentals

$

1,498,315

$

1,410,416

Self-storage revenues

177,705

157,190

Self-moving and self-storage product and service sales

152,154

152,179

Property management fees

14,608

13,593

Life insurance premiums

72,808

77,953

Property and casualty insurance premiums

29,064

26,841

Net investment and interest income

52,832

53,686

Other revenue

126,598

108,753

Consolidated revenue

$

2,124,084

$

2,000,611

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

Six Months Ended September 30,

2018

2017

(Unaudited)

(In thousands)

Moving and storage

Revenues

1,974,819

1,847,735

Earnings from operations before equity in earnings of subsidiaries

436,269

437,902

Property and casualty insurance 

Revenues

36,411

35,305

Earnings from operations

10,572

11,523

Life insurance  

Revenues

117,475

121,086

Earnings from operations

9,383

10,154

Eliminations

Revenues

(4,621)

(3,515)

Earnings from operations before equity in earnings of subsidiaries

(576)

(703)

Consolidated Results

Revenues

2,124,084

2,000,611

Earnings from operations

455,648

458,876

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,

2018

2017

(Unaudited)

(In thousands, except occupancy rate)

Room count as of September 30

398

341

Square footage as of September 30

33,553

29,104

Average monthly number of rooms occupied

269

243

Average monthly occupancy rate based on room count

70.1%

73.5%

Average monthly square footage occupied

24,266

21,895

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

March 31,

2018

2018

(Unaudited)

(In thousands)

ASSETS

Cash and cash equivalents

$

652,440

$

759,388

Reinsurance recoverables and trade receivables, net

207,665

193,538

Inventories and parts, net

93,071

89,877

Prepaid expenses

183,350

166,129

Investments, fixed maturities and marketable equities

2,015,402

1,919,860

Investments, other

407,774

399,064

Deferred policy acquisition costs, net

138,938

124,767

Other assets

180,475

244,782

Related party assets

30,257

33,276

3,909,372

3,930,681

Property, plant and equipment, at cost:

   Land

899,095

827,649

   Buildings and improvements

3,581,419

3,140,713

   Furniture and equipment

656,389

632,803

   Rental trailers and other rental equipment

562,167

545,968

   Rental trucks

4,597,016

4,390,750

10,296,086

9,537,883

Less: Accumulated depreciation

(2,881,613)

(2,721,142)

   Total property, plant and equipment

7,414,473

6,816,741

Total assets

$

11,323,845

$

10,747,422

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

   Accounts payable and accrued expenses

$

535,185

$

511,115

   Notes, loans and leases payable, net

3,686,572

3,513,076

   Policy benefits and losses, claims and loss expenses payable

1,198,053

1,248,033

   Liabilities from investment contracts

1,490,172

1,364,066

   Other policyholders' funds and liabilities

13,342

10,040

   Deferred income

34,136

34,276

   Deferred income taxes, net

733,218

658,108

Total liabilities

7,690,678

7,338,714

Common stock

10,497

10,497

Additional paid-in capital

453,006

452,746

Accumulated other comprehensive loss

(62,238)

(4,623)

Retained earnings

3,917,087

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

(7,535)

(7,823)

Total stockholders' equity

3,633,167

3,408,708

Total liabilities and stockholders' equity

$

11,323,845

$

10,747,422

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended September 30,

2018

2017

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

781,713

$

740,558

Self-storage revenues

91,493

80,472

Self-moving and self-storage products and service sales

72,913

73,268

Property management fees

7,192

6,831

Life insurance premiums

35,920

38,862

Property and casualty insurance premiums

16,283

15,026

Net investment and interest income

28,227

26,469

Other revenue

70,766

61,200

     Total revenues

1,104,507

1,042,686

Costs and expenses:

Operating expenses

529,350

492,250

Commission expenses

85,334

83,351

Cost of sales

46,402

42,866

Benefits and losses

45,773

47,109

Amortization of deferred policy acquisition costs

5,899

5,944

Lease expense

8,170

8,575

Depreciation, net of gains on disposals

132,625

133,144

Net (gains) losses on real estate

10

(166)

     Total costs and expenses

853,563

813,073

Earnings from operations

250,944

229,613

Other components of net periodic benefit costs

(254)

(232)

Interest expense

(35,030)

(32,023)

Pretax earnings

215,660

197,358

Income tax expense

(52,118)

(72,719)

Earnings available to common shareholders

$

163,542

$

124,639

Basic and diluted earnings per common share

$

8.35

$

6.36

Weighted average common shares outstanding: Basic and diluted

19,591,312

19,588,571

 

AMERCO AND CONSOLIDATED ENTITIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six Months Ended September 30,

2018

2017

(Unaudited)

(In thousands, except share and per share data)

Revenues:

Self-moving equipment rentals

$

1,498,315

$

1,410,416

Self-storage revenues

177,705

157,190

Self-moving and self-storage products and service sales

152,154

152,179

Property management fees

14,608

13,593

Life insurance premiums

72,808

77,953

Property and casualty insurance premiums

29,064

26,841

Net investment and interest income

52,832

53,686

Other revenue

126,598

108,753

     Total revenues

2,124,084

2,000,611

Costs and expenses:

Operating expenses

1,025,904

908,942

Commission expenses

164,591

158,716

Cost of sales

96,283

90,461

Benefits and losses

94,327

94,829

Amortization of deferred policy acquisition costs

11,930

12,265

Lease expense

16,339

16,862

Depreciation, net of gains on disposals

259,052

259,479

Net losses on real estate

10

181

     Total costs and expenses

1,668,436

1,541,735

Earnings from operations

455,648

458,876

Other components of net periodic benefit costs

(507)

(464)

Interest expense

(70,284)

(62,368)

Pretax earnings

384,857

396,044

Income tax expense

(93,466)

(145,198)

Earnings available to common shareholders

$

291,391

$

250,846

Basic and diluted earnings per common share

$

14.87

$

12.81

Weighted average common shares outstanding: Basic and diluted

19,590,946

19,588,231

 

NON-GAAP FINANCIAL RECONCILIATION SCHEDULE

Quarter Ended

Six Months Ended

September 30, 2017

September 30, 2017

(Unaudited)

(In thousands, except share and per share amounts)

AMERCO and Consolidated Subsidiaries

Earnings per common share: basic and diluted

$

6.36

12.81

Tax Reform Act adjustment, per common share basic and diluted

1.28

2.50

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

$

7.64

15.31

Tax Reform Act adjustment

$

25,024

49,015

Tax Reform Act adjustment, per common share basic and diluted

$

1.28

2.50

Weighted average shares outstanding: basic and diluted

19,588,571

19,588,231

 

Cision View original content:http://www.prnewswire.com/news-releases/amerco-reports-second-quarter-fiscal-2019-financial-results-300745890.html

SOURCE AMERCO


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