UHAL

Amerco (UHAL)

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AMERCO (UHAL)

F4Q10 (Qtr End 03/31/10) Earnings Call

June 10, 2010 11:00 am ET

Executives

Jennifer Flachman – Director, IR

Joe Shoen – Chairman and President of AMERCO, CEO and Chairman of U-Haul

Jason Berg – Principal Accounting Officer of AMERCO

Analysts

Ian Gilson – Zacks Investment

Jim Barrett – C.L. King & Associates

Presentation

Operator

Good morning. My name is Shaina and I will be your conference operator today. At this time, I would like to welcome everyone to the AMERCO fourth quarter fiscal 2010 investor conference 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. Ms. Jennifer Flachman, you may begin your conference.

Jennifer Flachman

Thank you for joining us today. And welcome to the fourth quarter fiscal 2010 year-end investor call. Before we begin, I'd 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 year ended March 31, 2010, which is on file with the Securities and Exchange Commission. Participating in the call today will be Joe Shoen, Chairman of AMERCO. I'll now turn the call over to Joe.

Joe Shoen

Good morning. Jason Berg, Rocky Wardrip and myself are all speaking to you from Phoenix. You have all seen the numbers and we just completed a decent finish to what has been a tough year.

U-Move actions we took in the first and second quarters started to show results in the fourth quarter. It's been very difficult to get results over the past 18 months. However, throughout this period, we have continued to invest in our infrastructure to both squeeze out costs and increase customer satisfaction. These investments should make us very competitive going ahead.

Our self-storage business also ended the year a little better than it started. We pulled back new investment in self storage over the past year, yet we still finished with increased room inventory over the prior period. This will likely take at least the rest of this year to absorb. The basic self storage is okay.

Customers' expectations are high in the self-storage business. And an operator must meet these expectations in order to fill rooms. I believe we are well positioned to do this.

Overall or forward-looking, I think we are decently positioned going into this summer. And I expect the customer will continue to make us their first choice for do-it-yourself moving and storage. With that, I'm going to turn the call over to Jason. He will walk you through the numbers a little bit.

Jason Berg

Thanks Joe. Yesterday, we reported a fourth-quarter loss of $0.43 a share compared to $1.99 per share for the same period in fiscal 2009. For the full year of fiscal 2010, we reported net earnings of $2.74 per share compared with $0.02 a share in fiscal 2009.

U-Move revenues for the quarter increased $16 million or just under 6%. We finished the full year of fiscal 2010 down $3 million or less than 0.25 of a percentage point. Growth in revenue during the quarter came from transaction increases for both our In-Town and one-way segments.

Revenue growth was somewhat limited by lower average revenue per transaction, largely due to a shift in customer usage towards smaller equipment models. Additionally, we've seen the ratio of In-Town moves to One-Way moves increase compared to 2009. In-Town moves on average generate smaller dollar amounts per transaction than do One-Way moves, thus watering down our overall average revenue per transaction.

Competitive pressures in the market remain. Our transaction revenue trends over the second half of fiscal 2010 are encouraging as we transition into our busy season now. By the end of fiscal 2010, we had reduced the size of the box truck fleet by approximately 3000 trucks from the same time last year.

While we sold about the same number of units in fiscal 2010 as we did in 2009, the number of new box trucks added to the fleet decreased. In fact, capital spending on the fleet decreased nearly $300 million as we slowed the introduction of new trucks to the fleet during 2010.

Our plans for fiscal 2011 as of today are for fleet spending to increase approximately $150 million over fiscal 2010 amounts. Revenues for our storage program increased $323,000 for the fourth quarter of fiscal 2010, compared to the same period last year. For the full year, we had a $179,000 decrease.

While our all-in occupancy rates for the year were down a little over 3.5% compared to fiscal 2009, our trends are much improved from where we were at last year at this time. For example, in fiscal 2009, we had a decrease of approximately 1400 occupied rooms comparing the beginning of the year to the end, whereas, in fiscal 2010, we had an increase of 3500 rooms comparing the beginning of the year to the end of the year.

Our overall occupancy rate continues to be somewhat diluted by the addition of new product. In fiscal 2010, we added 6600 new rooms accounting for about 582,000 net rentable square feet. We invested nearly $46 million in real estate acquisitions, new construction and renovation and repair of existing facilities.

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