Earnings call transcript Q4 2023

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Operator

Good day, and welcome to the U-Haul Holding Company's Fourth Quarter Fiscal 2023 Year-End Investor Call. All participants will be in listen-only mode for the duration of the call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Sebastien Reyes. sir. ahead, go Please

Sebastien Reyes

thank Holding joining XXXX Company call. and to year-end today. the U-Haul fourth you morning, us for Welcome investor Good quarter fiscal

we our limitation, statements everyone revenue, expenses, to statements Before general this constitute regarding would growth and of of during without certain may the remind including, call income I begin, business that like XXE Exchange of Safe XXA of Section of statements forward-looking XXXX amended, amended. provisions as Harbor within Securities the meaning of of and as XXXX Section Securities Act of Act the the the

to Forward-looking inherently factors and are to which projected. statements of actual cannot cause predicted subject differ Certain risks quantified. uncertainties, those from or some materially results be could

operating of uncertainties the the this For to filed may week. XXXX, and a company's and public and risks U.S. SEC be will Commission the XX, XX-K with ended discussion March please the year results, Securities for filings which the refer and that future Form affect company's business Exchange

turn now Company. Joe the of Chairman I'll to U-Haul Holding call over Shoen,

Joe Shoen

Thanks, for fiscal joining for the call investor XXXX. year you and thank us on Sebastien,

in to As relatively comparing mileage declining times new in in-towns have confidence, compared year-over-year outstanding last move an more with The one-way decline less than rentals. and so year one. rentals outstanding move transactions prior seen new is not we to of shift consumer year a

foresee is year-over-year bad year adjust I have going as have as a not seems, been year companies as rentals last this good mile decline these present not to short, may it in comparable realities. ahead. it not declined seems. delivery do So, and the as Last as

business, competition believe in continue than are I We but holding we our have the truck more considerable rental own. to

of still by year's (ph) to OEM [rent-up] highs. last and continue driving are rate the be is acquisitions truck expense. solid, still below Self-storage New although occupancy repair this capacity; limited

focused on and of to I walking I management buy believe deployment and long-term self-storage capital. is have a continue good our tackling. locations. build We this

look meeting holding increasingly point you to our forward on teams sale in environment. of our call. are retail together with an investor We I contentious retail QX

it turn I'll to over Jason.

Jason Berg

reported And Comparing million, call, $XX million, million year. next fiscal year's earnings earnings Thanks, that's our were Joe. last for this the quarter fourth fourth our the compared you X.X%. to I'd year to in to I context $XX had what some during year we full-year results. fourth XXXX. million $XXX same before history quarter equipment quarter the and decrease, year-over-year $X.XXX quarter billion quarter increase quarter. last company's we second a $XXX time, $XX for that's of in Yesterday, revenue we experienced the annual the to was like provide compared This to third highest of to results. this year Similar for earnings to at million, last that rental the increase a did million of Last fourth the year, about regarding reported our $XX

in we the the increased our rentals per years the delivery mile in XX call which pre-COVID we've out quarter is Joe and rental about year, by average to the March transactions quarter So, fourth to compare over results this that transaction. largest driven amount $XXX last, variances XX% this year. over if it of if our results mentioned, And quarters. is of seen fourth you million, as What a our the equipment saw year a the revenue in average quarter, quarter, and with decline we've third was a fourth and where decline in I'll miles particular were the fourth XXXX, you during on last

to XXXX. Much inflation, we equipment, along to the U-Box is attributable compared rental XXXX, $X.X devices, that of towing in fiscal this new billion and we on for produced. increases have new containers invested fiscal with the year number During increase $X.X trailers, billion of

projecting gross the equipment our of just billion, for $XXX million bit. XXXX, of fiscal rotation help increased we Proceeds For fleet under a of fleet fiscal rental CapEx sales us are a by retired XXXX. million the improve from $X.X total which $XX to pace of would

last the the the and versus a while sale speed Sales of sold reverse XX% of We've sales the units to up box proceeds sales purposely showing year. prices, from the XX% last quarter, year. couple quarter, Storage declined in [rent-up] increase self-storage slowed compared to $XXX cargo years, trend this of of fiscal year. historically increased strong have that vans have steadily last XXXX. remained previous 'XX these $XX some more And We fiscal course pickups over revenues of the that's the trucks or (ph). to strong, for million, for million we results and Similar moderation with year. fiscal in but expect through were in

in growth per average We experienced nearly foot. X% a

March, occupied of our had XX,XXX time occupied at the compared we of end at the increase count unit year. units Looking same to an last

units. X.X% release fourth have. by that differential an timeframe, our coming average to appreciate in the seen X.X% any would to quarter, moderation these self-storage new press about about occupancy for of you XX.X% in We quarter properties this our decrease we our a added that XX,XXX I XX.X% and quarter. same-store down with ratio to occupancy included led this During feedback occupancy be in It's disclosure same also grouping of year-over-year. might new can The during the

increase a year. invested space. we estate acquisitions $XXX in U-Box XXXX, over real million billion along $X.X new of previous fiscal During the development warehouse with in over just That's self-storage

of rentable added land feet are over time additional $X.X feet. across have XX about with haven't actively last million being north million million square square buildings, the have currently have projects, started $X.X we developed net projects last new somewhere yet. where year square years. new own we and feet That's up at projects that so months, net next should new XXX but we the actual construction That We done rentable time. we or couple XXX or XX $X the the Over result of an we this the from by

have somewhere currently had last deals escrow little That's at than less we time. a half year around in additional We in of this XX what escrow.

Operating the posted. best earnings $XX second by $XX for million the million and decreased the we segment to Moving Storage quarter. to the at also were have for for is million $XXX down we This $X.XXX ever year, billion the fiscal result year. And

Operating for quarter. and expenses $XX saw fleet way million. lead million the the We fourth $XX maintenance again, up repair increased

to ourselves. work increase to capacity more repair internal do We continue our

older fleet are the the certainly shape would expect help, year fleet this We into of going also we trucks rotation and to increase that months. a of good in out the summer the with

cost increased $XX Personnel million.

fiscal cost shipping, costs are in to cash during quarter. of XXXX, of revenue of and you If have liability relation the exclude liquidity. cost not to freight we other compared and accident line and including personnel out experienced expenses, the strong years. comparisons But, Other to decreases continued

this end existing had of cash moving year, the loan segment billion. from of facilities we At availability with $X.XXX along March the and at storage

line treasury Those $XXX had are this six included the of sheet, In investment million our U.S. month we in amount, cash. mature June. balance not that invested another in addition in to

year, short-term our interest was related $XX interest up and And quarter, In our income quarter, investments for $XX interest $XX expense to was the in while while $XX million. press interest debt. expense million from storage increased release included also million. up million additional on our some moving income was During these the earnings this up we information

XX-K report -- our Our with than XX-K later no filed with SEC the Friday. filing should be SEC this

hand the to question-and-answer Joe, back I to With the call our operator, like that, portion being of would the to call.

Operator

[Operator Instruction]

Sebastien Reyes

questions aggregate from Craig who share some a couldn't Inman I questions, we today. going live while to of Artisan the comments ask join Joe, am or few Partners,

you real as The first and leverage debt, appreciate XX% those or a is, to at disclose an assets leverage, there? secured us the the give example? on on sense disclosures any levered of the metrics self-storage levels Are XX% estate comment can updated

Jason Berg

to Jason. stabilized When is deals for out to that go estate I mark levered no portfolio Sure. south are is we you to the going effectively, somewhere if and going the would were he Treasurer going real to to Harte, closure that we typically probably Kevin market, something say the percentage. XX% out to financing, loan overall be This of XX% than to that oversees value. on our be is higher Assistant around portfolio markets, underneath looking well

Sebastien Reyes

raise there is the a leverage question, level second management? for The or the which level Board business at concerns should

Jason Berg

again. Jason this Well, is

think I gross debt out times that actually to included for or the measurement that's On one right cash, key below is press times. quarter. five not keep now. net we've look the basis, release now that below measurements well EBITDA. to so that of debt this Our And in netting we four a And we're

Sebastien Reyes

the we seeing base the out, And fleet? are waiting slowing? cost the are to pressures finally, the of lower due need at to looking is of refresh it repairs moving update looks on execute costs cost to repair outside like while excluding Or elevated that Any some true? leveling

Joe Shoen

This is Joe.

out, levels. been. fair We've cost through to trying of Jason revenue, this fair we're as drill we're to Of continue big metric it at be course, waste. eliminated, just which waste. historic level, would we're to is think be likely we're been and costs us, There's time, cost more a that put And always I We're the words it to it at personnel, I big at way think be to the as that. that has keep about looking a -- very struggling cost to other base. in is cost has before. for personnel a At same can the

very continue You to a familiar shortage human try retail much stores pool all personnel, still There's what's of of with that and beings happened in to much our keep we very and dealerships with running. turmoil. our access are to employment,

Sebastien Reyes

session the back we'll Operator, you. Q&A to turn

Operator

Thank you.

your Steven will Zacks. Please here ahead question. question first Our go come with Ralston from with

Steven Ralston

expenses. I Good trying on I'm little a it. operating get dig those deeper handle to a wanted morning. to into

that little strong, expense quarter, Just is the just get line, the why it's year X.X, operating the was was quarter? operating that actually for since it the the the it looking was XX%. at and saw which expense the into in very and was deeper Could fourth quarter solid. was margin up But respectable seasonally which fourth a up expenses, operating the fourth includes XX.X, margin, you all line myopically at other I operating

Jason Berg

is this Jason. Steve,

personnel. two main largest repair saw. the and the continue drivers were we to that maintenance, be So, and increases Those

four operating and levels. quarters maintenance And would ones. the operating is one for of I the you at look historical perspective better fourth Repair average. the not the expenses if over had, just of the was from historical expense ran an quarter, to over So, revenue, that say, we variance running quarter, margin personnel

line in it. right For the with of year, we were kind

a would was I say So, the quarter bit little worse.

overall at for couple sold. And fourth that take up margin into that was bit. of not year may you're physical operating for goods There's as cost counts, The some and adjustment quarter for things nearly year-end a as inventory last go of for seen it also a on sold then the of inflation good was measuring had a we've this goods sold. cost adjustment quarter-end, year, LIFO. on your down the and of including truing we as cost LIFO the goods And slow negative

Steven Ralston

Thank you.

on Another quarter. you're for about operational acquiring something reconciliation vehicles? fourth is popped a in more new year line the little said the that or that a depreciation, you item, when there up Was

Jason Berg

vehicles. new more just be should It

Steven Ralston

the course, is the the of quarter, that net treasury. and doubled since And, to has you income due first mentioned

be are There easy management? going you aggressive there. more in some to seems to fruit be cash So, low-hanging

Jason Berg

are are which funds invested in money much funds government capturing this market primarily yield. increased of Our

our interest about with $XXX million have indexed largely to -- million and We banking also $XXX that's partners, rate.

go So, then investment yield. allocate Right been extra program months six sense of months. to now, only go this to bit going to capture we're out months a we able to have been And little up. three order and making $XXX million it's on did those out where XX those treasury in

where If we that. So, in trying yes, of has as decent a out time we that to to investment, been as for had now aggressive hold can. get excess cash we've time to much a been do

Steven Ralston

words, [technical I'm I basically there's directionally, the talking last And seem the of revenues just your larger. other trailers, business. revenue looking in They the -- at to And question. magnitude that the [technical as opposed the an the difficulty] of noticed same variability And about looking I'll the be is vehicles. difficulty] U-Box. say. the accurate tracking other volatility perception? to Is business. other But In with more U-Box self-moving

Joe Shoen

now, Right how know to We to do relative we to you're going really comparing is to moves This U-Box U-Haul don't is business U-Box. short-distance more Joe. track. moves long-distance if

to enough It's had U-Box down. to think going forecast don't the big that's compare it's in flattening come business That's trend. you sort And than start And it's that users we though, I a or tell as have and turn U-Box a more a that slowing think. to trucks are not signs back that the positive. I thing. U-Box. fourth it soon quarters, maybe to or to months. quicker saw come five while all on starting because longer-term subjective what revenues going I All the third winter, can't operational. a We trend still of for slowed as back this This And I see so, of they're to We is judgment. recover

think to pick I going up. back it's

rentals truck period. over five-year it'll outpace I a think

Steven Ralston

Thank you my questions. for taking

Operator

question Wilen your question. ahead next come will Instructions] with Wilen Please from with [Operator Our Jamie go here Management.

Jamie Wilen

Hey, your May some flavor fellows. and results on April businesses? us you the give Can in

Jason Berg

and continuing time, continuing April relatively business which the to was on are strong. equipment -- May rental down to at year this to are last compared trend

I'm again, trying in keep perspective. So, things to

what to close we of back years, of couple over the picked certainly come year. we up all giving back giving but we're that last the last haven't had gains We some

Jamie Wilen

the go the How square does per various you in I detail into revenue Okay. self-storage. geographies? the foot. that And to profit foot relate square per those love on

Jason Berg

pretty on most open facility, once up well you the Well, fixed. the of costs -- are

somewhere going north XX%. bottom It's is that of the of line. run much probably to through So, to

Jamie Wilen

Okay.

go -- as So, ahead.

Joe Shoen

revenue Texas and of $XX.XX more of XX% California. are other XX% sale. in proliferation And -- handout, California, which of Okay, to spread, you're Speakers] tied on page product, in Jason's Texas costs just folds Everything Texas, you has $XX.XX [Multiple the big in six course California more hand, to down. if

ought because Jamie, I say, to that California. get those we them we'll in un-built. But -- XX building foot you and "Oh a there's to but of just California or in see those may And markets, California." When in be we're at Jason about to building But just rates. in talked a to choke. U-Haul, going we're hell, -- look So, these in okay. don't both of you just California, and this expenses your we've expect have We them pick $X.XX be you the to one have profitable, to more are probably properties, make hopefully profitable. we're be every get $XX probably that where going of than we are markets

Jamie Wilen

to So, you're to going opposed everywhere? as targeting markets, basically specific grow

Joe Shoen

than there's And do of in product you might think also, the think Jason's think mix I of are. a rate do What and what is forecast work doesn't storage of we try potential course we we up area? to going to the is. on every we environment And course, ahead? what's the going environment accommodate think. and storage team rate acquisition, be product Because gradations the of more

the And All projects going of can being mix, much cost hit these pretty we're right to so, by if we the go. we predict can where are capital. get

we capital right let us Of higher to some because change course returns to our he's is Jason have be faced having going low expected capital. course, with now. cost to refinance price with of going

City. still think think going except conservative York maybe market I New we're every I'll to I expand, So, say, in but a approach,

money financial believe see go if certainly you City, we're there Missouri, field validates can, what see We're know my York in we is I to making New in course, ahead. to and going or Manhattan happen. Indiana, And all if us opportunity, model they is but markets. of don't the and going those anybody's now, team just any not,

Jamie Wilen

Okay.

Now and your contrast stand out and that that with your you you revenue can area states in you've per competition look occupancy this with foot, foot? some per various rate you of occupancy broken major where wise as of

Joe Shoen

when all markets it, Are that That's Public We in I but a recent massively recent course product at place. with And with of they're think has I'll us it, comparing product? it. has look to California. run is seem getting down. over old we storage -- you very tell look that don't these at rate California number again, impressive at recent that product of on rate getting go see strong from one. product the or look quite you, older Also they product which to me to older because in we ton a on, I is the numbers product, we see.

look this at income in look whole we a at when state. geographically competition think for we constrained the not area, the I the

is we're facilities in to what a we'll California. think always third the going upper the We're within to to be and project market at So, on we the attempt look in area going rate. survey

the to have XX% we be new or get California places to Some project XX%, in a to go. upper in as

Jamie Wilen

are So, goal that do occupancy the in you're going square per per modus we revenue drive as ballpark, favor? main try going you foot foot percentage or forward, to keep lot you declining move the a see just the you will higher revenue to to operandi same What's as the and occupancy? drive

Joe Shoen

drop not Everybody and team, big they're strategies. stick We're team. do year. the We revenue XX% go rate. don't first lot to to pretty a much of has square or discount we're per foot Jamie. in for that off not XX% ordinarily different A people so a We

publish is Their several also we our more rate, We of significant it. competition change will than, the of like week. rates a post hotel different Most all business. competition, are a I we our think times

system our has well doing believes a us to and is I it, everybody going years. not I'm rate post So, worked crow that. over go We their think for better. we're system but not about out

Jamie Wilen

have existing purchased time-to-time. from And you Okay. facilities

for Lansing. always these of in acquisition a paying one of EBITDA there than are so synergies that? to that some And paying bought bit are kind facilities? What you're actually just every you little less multiple You

Joe Shoen

let to going to that. Jason try I'm answer

Jason Berg

say a pricing gotten little bit better year, for self-storage. last over So, the has I the would existing

little we on under that, existing think a of self-storage. a stabilized I those million closer before purchased the somewhere cap I rate to whereas were year probably we year over square that we this did last seven the average just that feet believe on six.

did XXX,XXX before. the we XXX,XXX year or think maybe square feet I

a don't do that variance to real have you're seem flavor would it just their are rates So, good because get cap it a of big pricing, it buying cap we can to back. rates in But that, at. of you upon depending of where way enough inch that starting

Jamie Wilen

prefer still you'd But to as to purchase? develop opposed

Jason Berg

stick and I'll in say first, nose my better now, on right just than from not. conversions more ground we have do projected and Well, we ups than financial often storage a existing perspective returns

Jamie Wilen

to initial Okay. lastly, quicker. to a lease four three gone take lot years the that they historical Have will down the stabilized to had newer more So And reach facilities up it level? rate? slowed of

Joe Shoen

not going I'm that. totally to agree with

at leasing than we're think I still better rates. historical up

up Now, somewhere. not the in it's over till you're XXs

to And aren't go the to we happen quick see some so, hit depending you then on factors, and If sort plan invisible right, want an XX% to there, typically, of of to our wall get a can struggle may from XX. but if careful. gains that lot XX different pretty you don't up you executed we've projects

halfway So, think than ago leasing comparable five say, we're up in, kind we of let's I did still faster situations. years

I Jamie, because big like specific, of very, a still, better are very air it's is leasing hot out up, across demand got there's just it's of it to times job opportunity. town geographically anytime generalize think think you parts a market just not try a you've depending competitive. Other some it's doing Phoenix, and we're I there

out. So, sort to we're trying things those

we picked of second the down we've years, about year, what we've that normalized did more then starts XX back first opened three more the in last the XX properties up points occupancy, average, on in after traditionally numbers For it about than year year, to three. come to points

Jamie Wilen

lift there's because self-storage, slowing new geographies, couple on bit more it's expansion of a some more that a or the moratorium building opportunities for industry within just in lastly, creating a service do And of see areas? you, of you Okay.

Joe Shoen

in a battle. got moratoriums halt. land is park? just bought can't you that -- a facto stick markets. and nice -- They of called They de think It's you in place several to there's we a where use for one, land in there's grind down. real slow a property I battle the a moratoriums All the one absolute use out, not LA. big We've What's but

Jason Berg

Huntington Park.

Joe Shoen

Park. a It's area. historically Huntington industrial

us think they for want a And put be on and this a everything You'd property. can here, we're in builder. they us, someone in at would obviously this residential slam to They fought throwing residential come basically because not dunk.

on of is storing But And view at so just be residences, a so, to you everything put bought that sea repeats. -- an to not they've on have, but is their say historically thrown have That expensive an they they don't just voted to if on place when it that containers they the cities we This moratorium. idea. just self-storage, hard were happens it. it, you'd And piece it of gives they're put politely. This property. it

So, me. by much it's users. for country across it's of all experienced pretty mind and is this the But think I front

somewhat they don't at self-storage, like may self-storage. they like We don't trucks. a because If like if they trucks, they disadvantage like be

have of kind use is. what depending the our think presentation we on land morph to of we So, local proclivities

so have than only way rental, that's to believe We that some but the land more do have it is truck only some the the combination places we standalones, storage, we we do and places, bring economical use. we we most considerably

Jamie Wilen

of not Given expect little adding could much occupancy as several supply an over the the in happened increase of of last as would rates you difficulty has because new increase years? see a product,

Joe Shoen

that market much XX so amazingly, and per building absorbed we the We'll many today the just beat last like And When has people the person. to did out is over many foot we are projects for the there continue the square markets but that's I there, foot Jamie, okay? next storage know. estimated hope, so hustlers, money and this everlasting my market, mean embarrassing, five years. that's Well, per to absorption strong estimate are so, years. way first XX to square no person. I one our have band,

the I'll of hold so, think XX% proud real XX% Storage that So, like that are is won't to they And X%. this? currently there using does which make various some and end to some of. sense? are where be is The self-storage. there it's is something Association market-to-market. guarantee statistics markets like And real Well, they the Does under are markets strategies going where thing only that's household XX%,

We are trying hunt get down the X% and markets obviously hope and then right. get in we there, it

Jamie Wilen

right, Okay, Thanks. fellows. all excellent

Operator

call concludes I this session. management question-and-answer the our over would any for like remarks. And turn to back to closing

Joe Shoen

Well, I for just everybody thank here. being

We good team have place. a in

long We haul. for in dug are the

with I happen over happy we going our deck I think for but for be we what's sure, management this period. to and guarantee going year us Tough are can will to results be tell on extended to hard. working

you forward next see thank call. for So, your you quarter to support. Look

Operator

attending very concluded. you now presentation. today's has for much conference Thank The

disconnect now your lines. may You

Sebastien Reyes	Director of Investor Relations
Joe Shoen	Chairman, President, and Chief Executive Officer
Jason Berg	Chief Financial Officer
Steven Ralston	Zacks Investment Research
Jamie Wilen	Wilen Management

U-Haul Holding (UHAL) 31 May 232023 Q4 Earnings call transcript