RENO, Nev., Feb. 7, 2007 (PRIME NEWSWIRE) -- AMERCO (Nasdaq:UHAL), parent of U-Haul International, Inc., North America's largest do-it-yourself moving and storage operator, today reported a net loss for its third quarter ending December 31, 2006, of $12.7 million, or $0.61 per share, compared with net earnings of $11.9 million, or $0.57 per share, for the same period last year.
For the nine-month period ending December 31, 2006, net earnings available to common shareholders were $96.7 million, or $4.62 per share, compared with net earnings of $109.6 million, or $5.26 per share, for the same period last year. Included in the December 31, 2006 nine-month results is a nonrecurring after-tax charge of $0.20 per share associated with the Company's second quarter debt amendment. Included in the December 31, 2005 nine-month results is a nonrecurring after-tax charge of $1.08 per share associated with the Company's first quarter debt refinancing. Taking into account these nonrecurring charges, adjusted earnings per share were $4.82 for the nine-months ending December 31, 2006 and $6.34 for the nine-months ending December 31, 2005.
"Our self-moving revenues continued to be adversely impacted by softness in one-way pricing caused by competitive pressure," stated Joe Shoen, chairman of AMERCO. "The fourth quarter will see us continue an aggressive program of replacing our existing truck fleet with newer models. The 'contest for the customers' is longer than four quarters. We will endure the rest of the winter and be well positioned as the customer's best choice this spring," concluded Shoen.
Highlights of Third Quarter Fiscal 2007 Results
* During the third quarter of fiscal 2007, self-moving equipment rentals decreased $25.3 million, compared with the third quarter of fiscal 2006. The negative trend in one-way revenue per transaction seen in the Company's fiscal 2007 second quarter continued in the third quarter. The Company has responded in kind to our competitor's aggressive one-way self-moving price strategies, resulting in lower rental revenues. The Company has experienced an increase in one-way transactions when compared with the third quarter of fiscal 2006 and is attempting to improve revenue per transaction while maintaining growth in transactions. * During the third quarter, nearly 2,400 rental trucks were placed into service, bringing the total for the nine months ended December 31, 2006 to over 16,000. Sales of rental equipment removed from the fleet continued ahead of last year's pace, resulting in a small net increase in the size of the rental fleet. * As part of our program to reduce current taxes, approximately 70 percent of these new trucks were purchased as opposed to leased. Based upon the Company's accelerated depreciation method, this has the effect of increasing depreciation charges in the earlier years of ownership. Depreciation expense, before gains and losses on sales, increased $13.1 million for the third quarter of fiscal 2007 compared with the third quarter of fiscal 2006, and $37.1 million for the nine months ended December 31, 2006 compared with the nine months ended December 31, 2005. * The Company has added to its self-storage portfolio through the acquisition of new facilities and the expansion of existing facilities, adding over 355,000 square feet in fiscal 2007. * Earnings from operations at the insurance companies improved $4.0 million for the third quarter of fiscal 2007 when compared with the third quarter of fiscal 2006.
AMERCO will hold its investor call for the third quarter of fiscal 2007 on Thursday, February 8, 2007, at 8 a.m. Mountain 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.
Use of Non-GAAP Financial Information
The company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, the Company uses certain non-GAAP performance measures, including adjusted earnings per share, to provide a better understanding of the Company's underlying operational results. The Company uses adjusted earnings per share to present the impact of certain nonrecurring transactions or events that management expects to occur only infrequently.
About AMERCO
AMERCO is the parent company of U-Haul International, Inc., North America's largest do-it-yourself moving and storage operator, AMERCO Real Estate Company, Republic Western Insurance Company and Oxford Life Insurance Company. With a network of over 15,400 locations in all 50 United States and 10 Canadian provinces, the Company has the largest consumer truck-rental fleet in the world, with over 93,000 trucks, 80,675 trailers and 33,500 towing devices.
U-Haul has also been a leader in the storage industry since 1974, with more than 380,000 rooms and more than 33.5 million square feet of storage space at more than 1,050 owned and managed facilities throughout North 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 Form 10-Q for the quarter ended December 31, 2006, which is on file with the SEC.
Report on Business Operations
Listed on a consolidated basis are revenues for our major product lines for the third quarter of fiscal 2007 and fiscal 2006.
Quarter Ended December 31,
--------------------------
2006 2005
-------- --------
(Unaudited)
(In thousands)
Self-moving equipment rentals $ 328,149 $ 353,409
Self-storage revenues 31,765 29,784
Self-moving & self-storage
products & service sales 46,351 47,316
Property management fees 5,914 4,289
Life insurance premiums 29,454 30,743
Property & casualty insurance premiums 6,555 9,949
Net investment & interest income 13,019 12,807
Other revenue 5,631 7,373
-------- --------
Consolidated revenue $ 466,838 $ 495,670
-------- --------
Listed on a consolidated basis are revenues for our major product lines for the first nine months of fiscal 2007 and fiscal 2006.
Nine Months Ended December 31,
------------------------------
2006 2005
---------- ----------
(Unaudited)
(In thousands)
Self-moving equipment rentals $1,181,103 $1,201,374
Self-storage revenues 94,612 89,776
Self-moving & self-storage
products & service sales 175,718 176,371
Property management fees 13,747 12,558
Life insurance premiums 91,493 90,050
Property & casualty insurance premiums 18,407 20,172
Net investment & interest income 42,757 38,873
Other revenue 22,563 31,470
---------- ----------
Consolidated revenue $1,640,400 $1,660,644
---------- ----------
Listed below are revenues and earnings (losses) from operations at each of our operating segments for the third quarter of fiscal 2007 and 2006; for the insurance companies, the third quarter ended September 30, 2006 and 2005.
Quarter Ended December 31,
------------------------
2006 2005
--------- ---------
(Unaudited)
(In thousands)
Moving and storage
Revenues $ 418,493 $ 441,725
Earnings from operations 4,911 42,689
Property and casualty insurance
Revenues 11,667 12,827
Earnings (loss) from operations 738 (1,597)
Life insurance
Revenues 35,835 37,064
Earnings from operations 4,333 2,620
SAC Holding II
Revenues 10,810 10,870
Earnings from operations 3,011 3,630
Eliminations
Revenues (9,967) (6,816)
Earnings from operations (4,731) (1,923)
Consolidated results
Revenues 466,838 495,670
Earnings from operations 8,262 45,419
Listed below are revenues and earnings from operations at each of our operating segments for the first nine months of fiscal 2007 and 2006; for the insurance companies, the first nine months ended September 30, 2006 and 2005.
Nine Months Ended December 31,
-----------------------------
2006 2005
---------- ----------
(Unaudited)
(In thousands)
Moving and storage
Revenues $1,484,952 $1,504,671
Earnings from operations 233,622 276,227
Property and casualty insurance
Revenues 28,995 29,193
Earnings from operations 4,103 1,727
Life insurance
Revenues 112,703 111,407
Earnings from operations 11,687 9,357
SAC Holding II
Revenues 35,824 35,541
Earnings from operations 11,273 10,730
Eliminations
Revenues (22,074) (20,168)
Earnings from operations (16,004) (11,824)
Consolidated results
Revenues 1,640,400 1,660,644
Earnings from operations 244,681 286,217
The Company owns and manages self-storage facilities. Self-storage revenues reported in the condensed consolidated financial statements for Moving and Storage represent Company-owned locations only. U-Haul also provides property management services for storage locations and earns a fee for these services. These storage centers are not owned by the Company and therefore are not reported on the balance sheet and the rental revenues are not reported in the statements of operations (except for SAC Holding II). Self-storage data for both our owned and managed locations for the third quarter of fiscal 2007 and 2006 is as follows:
Quarter Ended December 31,
---------------------------
2006 2005
--------- ---------
(Unaudited)
(In thousands, except occupancy rate)
Room count as of December 31 381 377
Square footage as of December 31 33,566 32,720
Average number of rooms occupied 326 324
Average occupancy rate based on room
count 85.4% 86.1%
Average square footage occupied 29,203 28,843
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2006 2006
----------- ----------
(Unaudited)
Assets (In thousands)
Cash and cash equivalents $ 313,131 $ 155,459
Reinsurance recoverables and trade
receivables, net 214,517 230,179
Notes and mortgage receivables, net 1,810 2,532
Inventories, net 69,525 64,919
Prepaid expenses 40,310 53,262
Investments, fixed maturities and
marketable equities 693,622 695,958
Investments, other 176,240 209,361
Deferred policy acquisition costs, net 42,466 47,821
Other assets 94,858 102,094
Related party assets 239,912 270,468
----------- ----------
1,886,391 1,832,053
----------- ----------
Property, plant and equipment, at cost:
Land 187,257 175,785
Buildings and improvements 803,988 739,603
Furniture and equipment 295,772 281,371
Rental trailers and other rental equipment 201,277 201,273
Rental trucks 1,505,270 1,331,891
SAC Holding II - PP&E 79,946 79,217
----------- ----------
3,073,510 2,809,140
Less: Accumulated depreciation (1,287,405) (1,273,975)
----------- ----------
Total property, plant and equipment 1,786,105 1,535,165
----------- ----------
Total assets $3,672,496 $3,367,218
=========== ==========
Liabilities & stockholders' equity
Liabilities:
Accounts payable & accrued expenses $ 242,798 $ 235,878
AMERCO notes and loans payable 1,223,405 965,634
SAC Holding II notes & loans payable,
non-recourse to AMERCO 75,253 76,232
Policy benefits & losses, claims & loss
expenses payable
792,366 800,413
Liabilities from investment contracts 402,431 449,149
Other policyholders' funds & liabilities 9,476 7,705
Deferred income 12,853 21,346
Deferred income taxes 121,979 108,092
Related party liabilities 3,408 7,165
----------- ----------
Total liabilities 2,883,969 2,671,614
----------- ----------
Stockholders' equity:
Series A common stock 929 929
Common stock 9,568 9,568
Additional paid-in-capital 374,722 367,655
Accumulated other comprehensive loss (40,650) (28,902)
Retained earnings 870,493 773,784
Cost of common shares in treasury, net (418,092) (418,092)
Unearned employee stock ownership
plan shares (8,443) (9,338)
----------- ----------
Total stockholders' equity 788,527 695,604
----------- ----------
Total liabilities & stockholders' equity $3,672,496 $3,367,218
=========== ==========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended
December 31,
2006 2005
---------- ----------
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues:
Self-moving equipment rentals $ 328,149 $ 353,409
Self-storage revenues 31,765 29,784
Self-moving and self-storage products and
service sales 46,351 47,316
Property management fees 5,914 4,289
Life insurance premiums 29,454 30,743
Property and casualty insurance premiums 6,555 9,949
Net investment and interest income 13,019 12,807
Other revenue 5,631 7,373
---------- ----------
Total revenues 466,838 495,670
---------- ----------
Costs and expenses:
Operating expenses 271,891 271,368
Commission expenses 39,316 42,548
Cost of sales 24,970 23,376
Benefits and losses 31,461 35,202
Amortization of deferred policy
acquisition costs 4,220 5,754
Lease expense 36,701 37,182
Depreciation, net of (gains) losses
on disposals 50,017 34,821
---------- ----------
Total costs and expenses 458,576 450,251
---------- ----------
Earnings from operations 8,262 45,419
Interest expense (22,131) (17,791)
---------- ----------
Pretax earnings (loss) (13,869) 27,628
Income tax benefit (expense) 4,389 (12,458)
---------- ----------
Net earnings (loss) (9,480) 15,170
Less: Preferred stock dividends (3,241) (3,241)
---------- ----------
Earnings (loss) available to common
shareholders $ (12,721) $ 11,929
========== ==========
Basic and diluted earnings (loss) per
common share $ (0.61) $ 0.57
========== ==========
Weighted average common shares outstanding:
Basic and diluted shares 20,922,433 20,865,684
========== ==========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended
December 31,
2006 2005
---------- ----------
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues:
Self-moving equipment rentals $1,181,103 $1,201,374
Self-storage revenues 94,612 89,776
Self-moving and self-storage products and
service sales
175,718 176,371
Property management fees 13,747 12,558
Life insurance premiums 91,493 90,050
Property and casualty insurance premiums 18,407 20,172
Net investment and interest income 42,757 38,873
Other revenue 22,563 31,470
---------- ----------
Total revenues 1,640,400 1,660,644
---------- ----------
Costs and expenses:
Operating expenses 814,078 827,861
Commission expenses 142,457 143,763
Cost of sales 88,734 85,337
Benefits and losses 90,909 89,225
Amortization of deferred policy
acquisition costs 14,671 17,806
Lease expense 112,095 107,055
Depreciation, net of (gains) losses
on disposals 132,775 103,380
---------- ----------
Total costs and expenses 1,395,719 1,374,427
---------- ----------
Earnings from operations 244,681 286,217
Interest expense (61,656) (52,672)
Amortization of fees on early
extinguishment of debt (6,969) (35,627)
---------- ----------
Pretax earnings 176,056 197,918
Income tax expense (69,624) (78,564)
---------- ----------
Net earnings 106,432 119,354
Less: Preferred stock dividends (9,723) (9,723)
---------- ----------
Earnings available to common shareholders $ 96,709 $ 109,631
========== ==========
Basic and diluted earnings per common share $ 4.62 $ 5.26
========== ==========
Weighted average common shares outstanding:
Basic and diluted shares 20,910,089 20,850,254
========== ==========
NON-GAAP FINANCIAL RECONCILIATION SCHEDULE
Nine Months Ended
December 31, 2006
------------------
(In thousands, except share and per share amounts)
AMERCO and Consolidated Entities
Amortization of fees on early extinguishment of
debt $ (6,969)
Income tax benefit 2,718
------------------
Amortization of fees on early extinguishment of
debt, net of taxes $ (4,251)
------------------
Amortization of fees on early extinguishment of
debt, net of taxes, per common share basic
and diluted $ (0.20)
------------------
Weighted average shares outstanding:
Basic and diluted 20,910,089
------------------
Nine Months Ended
December 31, 2005
------------------
(In thousands, except share and per share amounts)
AMERCO and Consolidated Entities
Fees and amortization on early extinguishment
of debt $ (35,627)
Income tax benefit 13,109
------------------
Fees and amortization on early extinguishment of
debt, net of taxes $ (22,518)
------------------
Fees and amortization on early extinguishment of
debt, net of taxes, per common share basic
and diluted $ (1.08)
------------------
Weighted average shares outstanding:
Basic and diluted 20,850,254
------------------