Q1 2021 Amerco Earnings Call
[music].
Good morning, and welcome to the AMERCO first quarter fiscal 2021, investor call and webcast.
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I wouldn't like now like to turn the conference over to Sebastian riots. Please go ahead.
Good morning, and thank you for joining us today welcome to the Americas first quarter fiscal 2021 investor call before we begin I'd like to remind everyone that certain other statements. During this call, including without limitation statements regarding revenue expenses income and general growth of our business may constitute forward looking statements.
Within the meaning of the Safe Harbor provisions of section 27, eight up the Securities Act 1933, as amended and section 21 E of the Securities Exchange Act is 930 fours Amanda.
Forward looking statements are inherently subject to risks and uncertainties some of which cannot be predicted for quantified.
Certain factors could cause actual results to differ materially from those projected.
For discussion of the risks and uncertainties that may affect Americas business and future operating results. Please refer to form 10-Q for the quarter ended June 30, 2020, which is on file with the U.S. Securities and Exchange Commission.
At this time I'll now turn the call over to Joe showing chairman of America.
[noise], thanks for that [laughter].
The diversity of course separates out the hard pulled from the rest of the pack.
Has been true inside the company and relative to relative to our competitors.
Over the last five months.
There's not much worse than home that has been available for our team.
We have taken advantage of what opportunities there were.
For the most park instead of work from home. It has been worked in the midst of it.
I personally have worked at least 32 states since the start of cobot.
Canada has remained close to travel, but hopefully it will open before September.
We have had a massive effort in place to sanitizer equipment and facilities.
We have had great success with this.
And have protected our customers and team members.
All of our stores have remained open.
We have been listening carefully to the public to learn their needs.
[noise], obviously, we have lost many customers we have had to find new customers with needs. We can crafty solution to.
We are determined to persevere and actually win.
Thank you for being on the call I appreciate your feedback I'll turn it over to Jason's, whether or not thanks Joe.
Yesterday, we reported first quarter earnings $4, a 47 cents a share that's compared to $6.76 a share for the same period in fiscal 2020.
As we discussed back on our fourth quarter call in May.
Self moving equipment rental revenue and equipment sales were the two areas most affected financially.
For us from covert 19th.
Looking first at equipment rental we saw a decrease of nearly 13%.
Approximately $94 million with quarter.
Whether through actions taken by government authorities are from cautious behavior on the part of our customers rental activity decreased during the first quarter.
However, as the quarter progressed, we noticed improvement in transactions and revenue.
In comparison to the same months last year.
For example April of this year was down 30% compared to April of last year.
It was down 8% and by June revenues were only down about 4%.
We have an increase in U move revenue for the month of July compared with the July of last year.
The majority of our independent dealer network has reopened.
And compared to the same period last year, we've increased the number of retail locations independent dealers.
And box trucks and trailers in the rental fleet.
Capital expenditures on new rental trucks, and trailers were $123 million this quarter, that's down from $561 million.
First quarter of last year.
While our original plans contemplated a decrease in fleet spending for this year. The majority of the decrease in the quarter was due the manufacturers unable to produce units.
Our net or expectation for net fleet Capex. This year is still around $460 million. However, there is quite a bit of uncertainty to this projection both on the acquisition side and on the sales side and it could end up lower.
Proceeds from the sales are retired equipment decreased by nearly $84 million to a total of $74 million in the first three months that year.
The decline as a result of commercial auction closures.
We've seen July auction capacity improve and sales results of followed.
Growth in storage occupancy has remained resilient so far through the first quarter.
Revenues were up $11 million or about 11% growth.
Growth in revenues in units rented comes from a combination of occupancy gains at existing locations and from the addition of new facilities to the portfolio.
Delinquency has climbed approximately 70 basis points beginning early in the pandemic and has remained fairly steady sense that.
If you look just at our occupied room count at the end of June.
We had an increase of 41700 occupied rooms compared to the end of June last year.
And looking at July we are seeing this year over year positive variance begin to widen out a bit.
Our stated occupancy rate of 68% continues to be diluted by the addition of new product.
This quarter I took a look at our occupancy using one of our competitors same store calculations to see what it would look like for us.
So for for properties in our portfolio.
That have been at 80% or better for two years.
We had 549 locations that met that definition.
And their average occupancy was about 92.5%.
That would have been down about 80 basis points compared to the same calculation you have had we done that last year.
Our real estate related Capex for the quarter was 103 million down from $218 million last year.
Both the pace of acquisitions and construction slowed during the quarter.
Over the last 12 months ending June Thirtyth, we added 5.200 million net rentable square feet to the storage portfolio about one point threemillion of that came online during the quarter.
Retail sales increased $11 million or 14% for the quarter with all three of our major product lines reporting gains.
As a reminder, the three major product lines that we have within retail sales are moving supplies.
Hitches until and accessories, and the refilling of propane tanks.
Of these three the largest increase in both <unk> dollars on a per and on a percentage basis.
Came from the installation and sales pitches and related accessories that includes.
Automobile mounted bicycle racks.
Operating earnings in our moving and storage segment decreased $50 million to $152 million for the quarter.
I wanted to touch on a couple of the expense highlights.
Depreciation expense on the fleet increased $3 million for the quarter.
As fleet additions have slowed so as fleet depreciation.
With the June expense actually decreasing year over year.
Now that equipment has once again being produced by manufacturers and getting into our plants.
We will likely see depreciation expense turn back up over the second half of this year.
Related to this gains on the sale of rental equipment decreased $16 million.
This relates to the decrease in auction activity during the quarter that I previously discussed.
The decline was largely related to volume as pricing has not declined materially.
Depreciation on all other assets, primarily storage locations was up $7 million for the quarter.
Operating expenses were down $42 million.
Repair costs associated with the rental fleet accounted for $28 million of that decrease.
With the decline in transactions and miles driven preventative maintenance costs of followed suit.
Additionally, with reduced auction activity, we had fewer trucks being prepped for sale, thus reducing repair costs as well.
We have not deferred any maintenance work toward maintenance costs.
Turned out to three of our largest operating expenses. We also saw declines in personnel and insurance costs.
I wanted to comment on our insurance company results for the quarter.
There are combined earnings from operations decreased about $9.5 million compared to the first quarter of last year.
This was due entirely to two relatively recent accounting standards that have introduced some earnings volatility into their investment portfolios.
The accounting standard that requires the mark to market of common equities through earnings reduced.
Our insurance company earnings by little over $6 million.
Additionally, this quarter, we implemented the new rules for current expected credit losses. This further reduce their earnings by about just under four and a half million dollars.
Like to remind everyone that our insurance companies report on a three month lag in conformity with their state regulated reporting conventions. So there aren't investment portfolio valuations. In this 10-Q were made as of March 30 Onest.
As we've all seen since then the financial markets a rebounded in our insurance segments have seen these noncash charges essentially cut in half.
Theres nothing fundamentally wrong in either insurance company with a core operations.
We continue to improve our cash and liquidity position.
As of June at the end of June availability cash availability from existing loan facilities at the moving and storage segment totaled $841 million.
That's up from $498 million three months earlier at our year end.
With that I would like to hand, the call back to I Lee our operator to begin the question and answer portion of the call.
Well now begin the question and answer session.
Ask the question you May Press Star then one on your Touchtone phone.
Our using speakerphone, please pick up your handset before a pressing nicky.
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Our first question today comes from Ian Gilson Zacks investment research.
Good morning.
Congrats working you.
Resolved.
No. Okay Act among the grant from Oh.
Huh.
So distancing <unk> and go Crazy closing HM basically many states opened up.
On a basis starting in March and April.
And some of those states have found a they have increased their problems.
Now moving back to this trip movement.
Okay sounds that this is impacting your very recent results or have you maintained a modest decline or year over year basis.
Oh, let's say we.
Not seen it impact we're very wary of it.
Yeah.
Of course most of these.
Restrictions on move under very questionable constitutionally when we look forward because the government to try to respect constitution.
Eastern United States.
Canada has been more with good bye.
[noise] restrictions on movement.
Of course, they operate under a different system the United States.
So in the United States I think we can say.
We've not seen.
A downtick because of this we're very wary of it in the course.
With our own team members and with our customers and want to be sure that were.
In Norway contributing to any sort of an up tick, which I'm pretty satisfied were not.
It's it's anybody's guess, the and honestly as to where things are gonna go weird.
We have to just listen to the customer.
And if they.
Express some need we have to see if we can get a solution to it that they'll pay us will because.
We've lost volumes.
Of small repeat customers easily is marginal businesses the ports to close caters for us.
These people we're.
You know a staple for.
Many many years and they're just simply not here anymore.
And we've had to try to replace them and that's the.
Little bit of a stretch for us so far we we pulled at all so.
I I would just it's very hard to make a prediction, but we're trying to be slide on our feeders of.
Big company can be.
Okay.
Looking back on your prior statements.
Regarding the availability of product that's typically on the southern California area.
Is that no change or are you still finding.
Hey relative shortage.
No no signs of is for example.
This is a terrible shortage in Los Angeles to terrible shortage in the greater New York area.
Terrible shortage in Boston I'll, let you conclude.
Okay, well I think it remote.
Our next question comes from Jamie, we along with well on management.
I think that wasn't in you made a comment about theaters.
Our as time moves pledged to small businesses.
I'm not being active you measure between what our consumer movements versus <unk>.
Sure consumer move staying relatively flat, while the business moves a decline.
Well, we can't we don't have a definitively to do that mostly small businesses, our sole proprietorships and they do business with us under a personal credit card.
So.
They kind of fall through the cracks not anecdotally.
As I work stores.
Manager after bad or says what had a customer who used to come in once a week and I haven't seen the person three months I mean, there's no. There's no doubt people. This has declined.
We.
We've done.
Picked up some business with home improvement people go home improvement Crazy.
And we get into some of the transport of that Okay, and I think we may have picked up some storage from that but I can't I can't give you I don't have.
Real confidence in that book.
I see click up in the equipment rental related to home improvement there.
Certain number of people, who put things in storage, while they're doing their bedroom or whatever.
I think we must have gotten some of those people locally.
Oh, what still ahead of us.
Is whatever is going to happen.
When they quit the moratorium on foreclosures the VIX options at all this stuff.
And.
It's it's going to be.
A little while to be my guess, but I I don't have a way to quantify that we've seen it.
A couple times locally.
Yeah.
It just put the big the pressure on a group of people Group Americans who were.
At that time marginalized either in there.
Mortgage or their rent and so.
That's going to create some activity and we hope to be there to serve Republican.
Offer them, a solution and thereby course ticketing business for so.
Joe You mentioned that fleet utilization is the major criteria that you look at.
Looking or clinical business, given <unk> volumes were down I'm surprised to see a your fleet size, increasing how he's going to work toward increasing that <unk> utilization number in the future.
Well of course, we got slaughtered in March and April you might figure.
You know business fell utilization you can't make.
A 30 or 60 adjustment.
For this week, we bought figured out how to no.
At the same time.
We are driving on utilization to let Jason I don't know what numbers, we make public on that but [noise].
The what you see in the total number.
Isn't that sales market just died.
Basically 90 days disappeared now that's coming back.
And so you're going to see.
I think in the big numbers, I think you're going to see a little.
Moving up the fleet and overall numbers.
This is a very.
Fluid situation, we didnt know how to predict.
When.
Sales came back so we.
Basically.
Put a real slowdown.
On additions and and Serendipitously the manufacturers for some period of time, we're simply closed down so the.
Goodness hold them to him if we though.
One of them so.
That factor has you know our fleet plans changing lump them up I guess, what I can say to you know.
Sales are holding good if sales over the.
We'll we'll probably by December.
The.
Total fleet, where we had planned to be.
But we're going to have another little bump come through here and I don't.
We've been trying to forecast is terrible impact us but.
Which is what we saw in some trucks a little later than we had planned to sell them. So have a little more mileage on them and we don't quite know how to.
With certainty forecast.
Well the proceeds will be well there's gonna be.
A little unevenness in.
The.
Game.
Or loss on equipment sales.
Probably for 18 months would be my guess before.
Works itself back out.
Of course, we're trying to work it out as fast as we can then we're going to get along the way there.
By December the way things are looking now but.
This is so up in the era, so dependent upon.
Oh.
Horses that arc.
Totally or we just have to try to be.
Nimble and be watching for what the trend is and then respond to it.
So for the automakers have them.
Very cooperative unhelpful and I think we benefit from.
Decades long.
Relationships so.
We all know that we're trying to cooperate that's not.
Get cross with each other so it's.
You know everybody's suffer difficulties in this regard and.
We work very closely with the automakers and hope that we'll be able to.
Come out of this okay, we're not in there.
Catastrophe position I think it the worst do you hope you know better.
We had about 3000 vehicles hung up in the system in other words, they've been prepped for sale, that's about right and they weren't selling so they weren't getting any income but of course, there they've got all the expense, we continue to depreciate them and everything right on through horse. So they were all dressed up but nowhere to go malware.
We worked that down substantially and we're continuing to work that down and at some point.
It'll start to normalize.
The Jason's turning to his computer so he met a.
Better answer to that.
Well, it's Jamie I, just wanted to put a a little bit of a finer point. Your your comment about the number of trucks. So we ended up taking on probably somewhere around 5000 trucks that were in the pipeline.
At the beginning of this pandemic that that in a perfect world They would have probably not taken.
Shipment on because we couldn't sell the corresponding number of trucks and do our normal rotation program. So I think we're looking at kind of a momentary Oh hi points in trucks that then as we as we sell through them, which is looking pretty good right now we should see that number come down by the end of the year and.
Look a little bit more reasonable as what we planned on to start with.
Okay, you mentioned the progression of rental volume between Theyre coming through and could you talk about July.
Yeah July which of course, we're seen an increase over the previous year. So.
It's been a steady improvement.
You know what we'll see how how is that can continue than the off into August right now with the way that the ended the month fell at August is hard to project much from the first week, so far here, but but July was a.
The month what good.
Could you quantify that.
Hi, I think we shouldn't ought to do that honestly.
<unk> <unk>, we got every and at the holders.
Okay, but we don't know just how this is going to turn out.
And.
Trust me, we're doing everything we can to be up and were.
We aren't.
I caught the siren song a failure.
We're not listening to the siren song failed.
But that's a different thing from actually turn of the money and every day.
And.
We've got nearly 2100 stores 20000.
Dealerships and.
Every day, there's another little.
Opportunity just to keep the place open very frankly at our worst.
We had possibly as many as 6000 of our dealerships close.
We do not close our stores.
We had in a minute closures do.
You know a bunch of confirmed cases of co bid or.
The riots that came through close some stores we had.
A couple of places where the.
Local politicians put in a closure for several days on.
Work through all that and.
God knows if they're going to implement that sums same thing again I tried to be very positive about this.
What's actually happening in little work out with the reopening because the last thing.
I want to hear is that the.
Politician say, we're gonna start closing everything down again.
We saw at closing everything down again looks like you quoted a number on that did you Jason.
Down in revenue and your quota Oh, well in April was down 30% when everything was kinda clopay. That's that's a.
The you know that's arm again, you got you can figure that better not yet.
3rd% down doesn't work so good so we found some new customers.
And we're we're going we're hard at it and optimistically.
And of course my plan is to see people make earn bonuses. That's why plant is my planned isn't.
The people, we can terminate from employment my plans to see how many people we can have make a bonus this month the next month.
So they all know my plan them by and large they're working towards that objective rather than just.
Minimizing losses.
It's a different mindset more than anything else, Jamie just have to mindset, you're going to win.
Rather than you're going to not lose that is your body.
Drilling on the self storage Oh, what does he worked for future program or.
Capex himself storage newer slowing down a little bit too well begins to mature.
We've been but what's your outlook for this year next year.
I'll, let Jason try to quote a number two.
Of course, we got three months of.
We couldn't get you know guy to hang doors, and so you know just basic stupid stuff can get a rumor to put on a roof.
So we we have had a whatever you want to call the tremor and all of his numbers, but and he's been trying to keep readjusting costly. What this week, we were cutting back before this yet.
So I don't know I'll just kick in November something we'd we'd been cutting back.
And the kind of is you know there's a lag so we had some lags and then we.
Lost some finishing so right now desperately trying to finish some projects that we can get them into revenue.
Production.
But were queuing up fewer projects every day.
I'll, let Jason see if you can quantify it sure Jamie.
It does statistics I normally quarter or what we call active projects here. One is that that are being worked and and last year. At this time will be had about 205 projects or just under 11 million square feet and development.
And right now we're looking at about 161 projects for about just under 7.8 million square feet.
So those numbers have have come down.
Over the last last 12 months, a rough estimate of.
Have a new projects that that that we've taken on.
And our translates into net rentable square feet would be maybe about 2 million square feet of new projects that we've taken on so all of those numbers are have been trending down.
You mentioned that the lines occupancy numbers were other than the June quarter.
Quantify that as well.
<unk>.
Yeah. So does the statistic I go to <unk> the number of rooms occupied versus the same time in the previous year. So at the end of June we were at plus 41700.
Our our peak performance level, which was last year, we did hit plus 50000 for a month.
And we're trending you know it goes up or down, but it's been moving up and I think so far in July labor, we came close to <unk> to plus 47000.
Right.
Oh, my mother cycles with local who.
You are critical in some sleep in the month I hope you've done.
Oh, Yeah, no. We're we're applying the heck of a company Blaine.
The though.
Of course people want to see.
The boss is working to they're all work on again lots I told you. We don't have a lot of work from home.
So a lot of our team members that had to.
Calm their own personal fears then home the fears of their loved ones. So they could continue to serve the public.
And it's not been.
I totally comfortable situation for a lot of people.
Third greatly in their debt.
Them being willing to.
Carry on and try to serve the customer.
Instead of just.
Crawl into a whole someplace so.
But that's a day to day deal and I'm sure you have loved ones and everything in your friends and family some people.
More terrified than others, but.
Everybody's apprehensive and we just had to continue to work through it.
When you go to tell the most logical knock on wood <unk>.
Thanks, Jamie.
Our next question comes from Diana Huang with think there.
Hi, Thanks for taking my question.
Hi, Dan.
Hi, I when you get a better understanding on your amazing and South doors Capex plan I'm talking about yeah, because you're spending quite a lot lots versus previous expectation.
So I eat I'd still plenty on funny, I think I'll take roughly 400 million right.
800 million prior.
Real estate has there been a change in shy Gee why did that pandemic check constrained.
Ben.
[music].
So on the fleet, but what we gave out our initial projection was I believe 460 million which is.
I think we had initially projected some around 850 million of of gross purchases and then maybe 380 million of.
Sales so both of those numbers.
Moving around quite a bit right now as you can imagine so I would say that the fleet capex spend is probably more impacted right now by.
The the vagaries of covert 19 as far as production being available in the auctions being open.
On the real estate side.
Only give out a projection for what it's going to be because it's more of an opportunistic.
Type a a program and we go well for the opportunities are.
We have certainly scaled back out of the interests of.
Preservation of liquidity, which has been the primary reason behind a slowing that down versus market conditions.
And we just we just went to a round of authorizing some projects to to finish offer or start up.
But given what's happened in the first quarter <unk> will most likely and lower on Capex spending for real estate Fisher than we did last year sort of private at the second erode. Okay. We're trending down yeah, we're going to trend down we're going to trend down more than we traded down last year. That's that's what's really going to have.
But it isn't that Jason Yes, we were down last year will be down probably harder. This year again, we stand ready to cut anything at any time, if we think cash.
Going to.
Become.
You know our focus is jason's very hard focused on Kashi as a.
Team of cash management people.
And Oh of course, there doing this every day.
It took us.
Well, a little while to get some expenses turned down we got them turned down we got.
A lot of projects stopped and now we're.
Trying to.
They do our best guess is what sort of.
Business, we can generate and they are brought a cash flow for that.
Next six months, it's it's a little bit uncertain, but were.
But it's it's a full time job Jason's doing it every day you as a team of qualified people work.
Got it.
And then I can you talk a lot about what you're seeing and self storage I.
Hi.
On T. assays that that their revenues will be more pressured.
Yeah, right crashes and difficulty in collecting fees and you guys had talked about overcapacity in the market for awhile. So what is your out what are you guys see and what is your outlet alright stopped words.
Well, we we we hope to be the last people to quote rates.
The.
Industry is.
A little beautiful and my guess is they'll get a little more fearful I don't know that for a fact.
We don't have a pipeline.
To them much better than you do in fact, we may have a worse pipeline to them. So.
I think you should take what PSC says on its faces affair.
Oh.
We have a slightly different plan, but we've had a different plan.
And storage all along we're much more.
Household goods oriented.
And household goods moves or more need driven.
In some of their customers who were.
They have a lot I can I can anecdotally to tell you they have a lot more small business customers.
I can't give you a number but I can tell you anecdotally they have a lot more and more.
Most people in good times, we'll do better than our customer will.
An important as maybe our customer will do better than theirs.
Yeah.
Again ours are driven by life events like.
Person das marriage divorce that sort of thing.
Not so much by overall economic activity, although it does impact us and its hurt us bad.
But I think they're a little more impacted by that which gives them of course, a bigger rising good times. So.
Neither strategy is Oh sure deal, we're just slightly different strategies.
Okay. Okay.
You bet that you guys like a lot to cut rate and can you talk about the decline.
And your rate rent her either occupied rooms occupied square feet.
Five reflect.
Reflecting rate pressure or isn't margin in Mexico.
So I I I look at our rates on what's the average rate of people moving out what's the average rate of people moving in and for our portfolio Uh Huh.
Including our new projects.
Our average rent per new room, this year versus new than last year is is up just just slightly so it's not it's not down.
He has a if you were not just look at our stabilized.
Properties, excluding new new rent ups.
You might see a very small decrease there'd be less than a percent.
Okay and I was just we then one last one HM no Whitey and found that they see torchmark yet.
Oh yeah.
Any place any bright spot.
Right.
Yes, they accept.
It's been very selective when.
The coded first grew up and make wholes schools.
We offered 30 days free storage too many students.
And we got a little bump in business.
Well, we'll get a little bump of business lending on how the hurricanes come through here.
Well, you move and useful.
I think it would be.
Generally, though harder the shut down in the area.
Is it more negatively impacts storage business that.
I think you probably moguls areas as well as side.
Okay. Thanks.
Our next question comes from Craig in men with artisan partners.
[laughter].
Hey, guys.
Greg.
On the Capex I just want to clarify the net trucks. Jason you. All are just you know obviously you can see but your penciling in about 460 million for the year net net number.
Yeah I in my comments, there's quite a highlight that there's probably a little more uncertainty that number than that in other quarters.
Just from all the moving parts.
It it might come in lower than that.
And if you did finish up with that you know that nets were 60.
With that increased the total.
Volume of trucks in the fleet or would that hold it flat kind of what would that due to the count.
But our original plan was for the total fleet to increase of 2000 units.
No it with with the sales market, where it's at it if I'm not sure we're going to catch up enough, but by the end of the fiscal year for that to happen so might be a little bit more.
But but the original plan and the intention was for it to grow just a few thousand units.
Okay.
You know it's interesting I on the downside Joe you were talking not wanting to get employees bonus.
A lot of companies you know meet processors retailers frontline workers. It ended out bonuses just for you know I guess you caught hazard pay why not take that approach where I just I'd love your thoughts on kind of how others are hanging on their doors for Shaw.
Well, it's I I only know what I read the critical about other people. So I don't know much.
The opportunity we have is every single person.
Risk.
Because were.
You know we're in the equipment business and it's in the retail business everybody's face to face.
We put up sneeze yields and by close and sanitizing, and all that stuff, but the long and short of it.
Because everybody is at risk and in a curious thing that I've noticed is that.
Much of this is.
Driven by fewer more than actual contagion.
And fears that Mary.
Oh corrosive staying on the person.
And.
Sure doesn't actually have to do with.
Are you going to catch the cold it or whatever it is it to internal thing and I want to try to respect that people.
Yeah.
Right too.
Recognize that do whatever we can to.
Help them.
But basically every single person we have.
Is.
Engage and some version of.
Hazard, but the how the individual perceives it's very different than problem.
Oh, you are I might perceive the identical situation so.
Oh.
We haven't made any change there and I don't expect that we will.
Okay.
Okay, so that the bonus.
There's a wonderful team.
They're not asking for anything other than.
On the stage pay for an honest Steve's work there people whose.
They have made this country great.
There you find out we have a lot of longevity and our team.
These people are dug in for the long term.
Big So expect us to be fair with them and.
We're doing our very best to be fair with though.
Okay.
On the on the storage business, Jason I didn't catch though.
You do out of same store number.
How is that calculated again.
Sure. So that the most objective calculation that that I could find amongst the competitors is one where are you.
You look at a facility that's been open.
Our has been at 80% occupancy for at least two years.
So essentially start kind of measurement in the second here, where it's been stabilized.
And so for those locations, we had about 40% of our locations fall into that category.
And at those locations our occupancy this year was it was right about 92.5%.
If you would have looked at that number last year I think it was like 93.1%.
Okay.
Craig I want to go back on that hazard, they don't forget that.
Barely as a reflection on the workforce.
There is no amount of money.
What I would suggest.
I should induce anybody to jeopardize their personal safety or the safety of their loved ones.
That's an individual decision.
The people make.
Based on what they consider to be their responsibility to the public into the country.
And I'm very proud to say the far and away the vast majority of our teams. It's just said they thought about it soberly instead, we're in.
And I'll put that up against any other corporation of America.
Very proud of how they behave and I would be in my mind insulting them, suggesting but if I give them X dollars. They should now put their family or themselves at risk.
We're not in that business, we're here to help the public.
We're going to do it and we're going to do it as carefully as we can't.
Yeah, no <unk> that it did.
Admirable weighted to think about it is I was curious to hear your thoughts because other company has.
You know they it stepped up pay in light of the more difficult conditions for for frontline workers, they've taken a little bit different approach. So you always culture is slightly different names and I was also getting at is there potential for you know just from the number side is there can be some pressure on pay because the.
Conditions.
Each pressure on pay it's going to continue the almost can't hire today.
It's impacted gravely by the 600 hours a week, we don't know how that's going to.
Work out in the Congress this week, it's massive.
Oh, it's going to continue.
We're in a.
Advice on that subject we have.
A long term plan, we Ben this is.
This you could see this coming for 100 reasons, it's cool would just aggravate.
But there's a steadily rising.
Wage amongst frontline workers in there there do every penny they can get a mall for it.
But of course or pay them, we have to make them more productive.
And so we've had a.
For Mendis.
Program attempting to me.
Every single person at the front line more productive.
Thereby create more value, which we kind of course.
And Im sure well, that's our program and we're hard at it has to do with.
A myriad of small things the ones that you are probably late two most easily or electronic tools that just allow people to speed up or.
You'll get to the finish line quicker.
Yeah, and eliminating basically busy work and.
Also giving the customer to participate more just to do it yourself business. This isn't the concierge business.
And the customer expects to do some participation.
And when that on the customer participation lessens the burden on the individual.
We have on our side of the.
Transaction.
Have you won't see within 24, seven [noise] rental that and online reservation system. If you don't seem to pick up there in terms of percentage of business come into that channel.
Yes, it's costly picked up now for three years and it's an accelerated slightly during cold.
Well, we were pretty well into it before that started and so it continues on.
No there's lot of nuances to that.
I think we've released we released any numbers on that day.
Okay, We haven't released number so I can't.
Sure well.
Well work in that food.
We are miles ahead.
If any.
Provider I'm aware of.
Doesn't mean, there's not someone who's the head over.
I'm not aware of anyone who's ahead of us.
In a similar.
Effort.
Last one I wonder is there a I hadn't a chance to read the Q yet is there a update on the refund status and.
And it's and size.
Sure.
The.
The amount filed so far we filed for about 235 million. This week, we received the first part of that 109 million.
Ah, which then deposited in is is being used to pay down that 200 million dollar loan that we took out that securitized by that so we have another chunk of that are still expected.
Got to come in and then we have not yet filed our.
Tax return for this fiscal year, which then we expect that to have.
Another large refund to associated with it I think somewhere close to 250 million.
So we're doing the work.
To prepare that finally, I won't get kick at that filed as soon as possible.
I'd like to clarify this is all.
We kind of money, we at par paid the government.
Yeah, we are.
Insignificantly participated in any program because it really hasn't been applicable to our.
Organization so we.
Yeah.
The nature of our refunds are for a mouse already paid and for recognizing essentially depreciation on capital investments that we've made the CRO business and we've we've.
Essentially that's been in the tax code for her for quite Awhile, and we're taking advantage of that I see we are expected with with the way that the timing of these filings art that in fiscal 22.
Likely to become a cash taxpayer.
Okay, Great and that's where the questions for me. Thank you.
Thanks, Craig.
Our next question is a follow up some Ian Gilson, what exact investment research.
Okay. Thank you.
As you look at your basin is have you noticed staging correlation.
Tween, a number of new cases increase this is the level of business that you do in those locations.
Simple answers no.
This relates more closely to the fear index.
Which I don't have a.
<unk> generally accepted.
Measurement of the fear index.
But suffice it to say that pretty much.
Reflects the political realities of the nation.
As you look at your employment.
He knows that over the years peers.
Excuse me.
It was the peak activity that you employ a large number of part time employees.
Oh, we in that period, all the increasing a poor and then.
Oh I agree on that basically any level of.
Hi, and employee employment.
Lot of different parts that overall.
We're struggling to hold steady.
Because of the lack of participants in the Labor force at this time and I'm, hoping that changes this week or next but.
We're not driving that car.
Okay, great. Thank you enough.
[noise] and this is subash and I'll ask one last question on behalf of Gates Garcia panel capital partners.
How do you projector business will be affected by a large number of college students not returning to campus this year.
[laughter].
Well, it's totally unknown.
Amazingly, we had college students returning to campus last week of July.
The way these schools are running it it's a bit baffling to me.
So we had some schools actually asked.
Number two weeks early.
Quarantine and the dorms and they did it.
And therefore, they moved in last week in July could have not meal, but with a better on the subject.
So I'm absolutely baffled by what's happening.
And of course, we're trying to monitor it but.
I'm sure you've all read the deal is one week. They got this idea in the next week they got another idea.
We're having a hard hi.
Strategically positioning.
To meet these.
Ups and downs and business.
There are several of these colleges as you all know literally.
Someplace like College station, Texas, and Ames, Iowa.
The college activity as you know three or 400% increase.
And what goes on those communities.
And when we come predicted at no four or five weeks in advance we can position ourselves.
To be able to rise with the rising tide.
Well, when we're not seeing them patterns and clearly we're not seeing the patterns, we're trying to find them.
But it's it's.
Oh.
I I first I thought the business is gonna be down a lot I'm not so certain it's going to be down a lot, but it's going to be unpredictable how the waves come in and we may Miss some but we would have gotten in a prior year.
Got enough where you there Sebastian.
[laughter] does that answer that.
Well I appreciate everyone being on on this call Oh, we look forward to speaking with you in a few weeks on Thursday August 20th at our annual shareholder meeting.
Followed by our 14th annual virtual analyst and Investor Day, which is at two P.M. eastern both can be accessed at America Dot com. After prepared remarks, there will be a light you in a with members of the management team questions can be submitted ahead of time or live during the event.
Thanks again for joining us today.
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