Amerco (UHAL)

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Q3 2009 Earnings Call Transcript

February 5, 2009 at 10:00 am ET


Jennifer Flachman - Director of Investor Relations

Edward Shoen - Chairman of the Board, President

Jason Berg - Principal Accounting Officer

Gary Horton - Treasurer


Ross Haberman - Haberman Fund

Gary Lenhoff - Ironworks



I will be your conference Operator today. At this time, I would like to welcome everyone to the AMERCO third quarter fiscal 2009 investor call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. At this time, I would like to turn the call over Ms. Jennifer Flachman. Ma’am, you may begin the call.

Jennifer Flachman

Thank you for joining us today, and welcome to the AMERCO third quarter fiscal 2009 investor call. Before we begin, I would like to remind everyone that certain of the statements during this call regarding general revenues, income and general growth of our business constitute forward-looking statements contemplated under the Private Securities Litigation Reform Act of 1995, and certain factors could cause actual results to differ materially from those projected.

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 31st, 2008, which is on file with the Securities and Exchange Commission.

Participating in the call today will be Joe Shoen, AMERCO’s Chairman. I will now turn the call over to Joe.

Edward Shoen

Good day. I am speaking to you from Phoenix. I have Jason Berg, our Chief Accounting Officer; and Gary Horton, our Chief Financial Officer; and Rocky Wardrip, all on the line with us and they will be available for questions after the remarks. We finished a rough quarter here ending December. November was poor. December was worse. The good news is that January is firming up or has firmed up. We continue to trim expenses and have reduced some CapEx much as we have been doing over the last six months to 12 months on expenses. The CapEx reduction is really going to just show up here in the fourth quarter.

Year-to-date, we are up slightly in total transactions and that is composed of us being up a modest amount in what we call in-town truck transactions and down slightly less transactions in a one-way truck transactions. Unfortunately, these nets to a revenue decline as in-town transactions have a lower dollar value per transaction. Total customer is up. Total dollar is down.

U-Haul remains a need-based business. Our point-of-sale teams are focused on wowing our customers with superior service. We have been through troughs before. We will get through this one. I expect us to maintain or improve our competitive position through this process.

Both Republic Western and Oxford Insurance companies are on plan. Their investment portfolios are very solid. I do not look for any surprises that they finish a year. Of course I am monitoring our liquidity. I intend to keep us highly liquid in the near time. This has been our strategy for 18 months. If you look at a 20-year history of this Company, you would see we have never been as liquid as we have been in the last 18 months and of course a burnt child was scared of fire and we are trying to be extremely prudent and I believe we are.

I will go ahead now and turn it over to Jason Berg, our Chief Accounting Officer. He will go through the numbers then we will go to Q&A.

Jason Berg

Thank you, Joe. Good morning. Yesterday, we reported a third quarter loss of $1.46 per share, compared to a $0.69 loss for the same period in fiscal 2008. U-Move revenues for the quarter decreased $15 million. For the quarter and for the first nine months of this fiscal year, we have been operating with fewer trucks on average than last year at this time.

For the quarter, our average box truck count was down a few hundred units compared to the same period last year and for the nine months on average we have down about 3%. However, by the end of December our box truck fleet was up about 1,200 units compared to the same date of previous year. Several factors contributed to the decline of revenue for the quarter. First, we experienced the decrease in overall transaction during the quarter led by one-way rentals.

One factor that we know influenced the decrease in activity was the comparatively worse weather large portions of the country experience during December and parts of November. The revenue and transaction declines we saw in the third quarter were not nationwide, as we had several areas that saw revenue increases in the system.

Another issue likely interacting with our results are the uncertain conditions in our economy. It is reasonable to consider that the negative consumer sentiment prevalent through much of the country has not been conducive to our attempts at increasing revenue. But we do not have any special insight into our competitors’ financial result. Our own assessment of the marketplace was that our revenue results were down. We are in a comparatively better position than others. Secondarily, our revenue results for quarter were subject to fluctuation and currency conversion as we translated our Canadian operations to the US dollar.

In the third quarter of last year, there was unusual weakness in the US dollar compared to the Canadian dollar. This has since reversed and the variance in conversion rates magnified our U-Move revenue decrease by approximately $4 million for the quarter. This had a minimal effect on our results for the first two quarters of this year. However, if currency rates continue where they are at currently we could see this continue to have some impact on our reported revenues to the second quarter of next year.

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