Q1 2022 Amerco Earnings Call
[music].
Good morning, and welcome to the AMERCO first quarter fiscal 2022 Investor Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then 1 on your telephone keypad to withdraw your question. Please press Star then 2 please.
Please note this event is being recorded.
I would now like to turn the conference over to Sebastien Reyes. Please go ahead.
Good morning, and thank you for joining us today welcome to the AMERCO first quarter of fiscal 2022 investor call before we begin I'd like to remind everyone that certain of the 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 day.
Of the Securities Act of $19.33, as amended and section 21 E of the Securities Exchange Act of 1034 as amended.
Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.
Certain factors could cause actual results to differ materially from those projected.
For a discussion of the risks and uncertainties that may affect the Americas business and future operating results. Please refer to form 10-Q for the quarter ended June 32021, which is on file with the U S Securities and Exchange Commission.
I'll now turn the call over to Joe show and Chairman of America.
Good morning.
U haul self move products and services.
And as what is driving our current success.
America is on the move and U haul is supporting it.
However, we continue to run behind on Capex, Peru rental trucks and affiliated and additional storage units.
We are unlikely to get the trucks, we want anytime soon.
We may be able to catch up on storage units.
Supply chain issues are everywhere.
This will increase capex and subsequent periods.
And is causing ongoing disruptions.
Our U box and moving help operations are continuing to growth.
We remain supported by a low interest rate environment and support from a group of long term lenders.
Our personnel remained stressed I've talked about this before.
We have more unfilled positions and I am comfortable with.
And that just puts more work on the rest of the team.
Our current success will embolden many competitors.
Every time, we fall short of the service to our customer we encourage that customer and consider alternatives.
We must continually upgrade our game to succeed and of course, that's what I plan to do.
I'll now turn the call over to Jason to go through the night.
Thanks, Joe.
Yesterday, we reported first quarter earnings of $17.60 of share that's compared to $4.47, a share for the same period in fiscal 2021.
I'll start off with our equipment rental revenue we.
And we experienced an increase of 58% of approximately $381 million for the first quarter.
Versus the same period last year.
To put this into perspective, a bit the first quarter of last year was the hardest hit months for from COVID-19 for our equipment rental business, we had of quarterly decline on revenue of 13% of $94 million.
But excluding that and.
Calculated on the average growth rate from the first quarter of the year before fiscal 2020.
We still had an 18% increase or $287 million improvement.
During the first quarter of this year, we saw increases in 1 way and in town revenue and transactions.
Average miles per transaction increased and rates remained and a good place.
Compared to the same period last year, we increased the number of retail locations and independent dealers.
As a reminder, it was the July of 2020 debt, we started to see our equipment rental revenues rebound from Covid and they started to increase.
July of 2020, we added and an 11% increase in revenue but.
But even with that relatively strong comparable.
Comparable figure from last year, we are still seeing continued growth and U move revenues for July of this year.
Capital expenditures on new rental equipment were $310 million this quarter, that's up from $123 million and the first quarter of last year.
There is still uncertainty surrounding the delivery schedules for receiving equipment for manufacturers.
And our initial projections for growth of equipment purchases. This fiscal year. So thats before sales was $1.2 billion.
And it's likely that some portion of that is going to be pushed into our next fiscal year.
Proceeds from the sales of retired rental equipment increased by $102 million to a total of $176 million. So far this year.
Sales volume for the rest of this year is also going to be dependent on the availability of new trucks to put into the fleet.
For the equipment that we are electing to sell there has been a strong market. So far this year.
The first quarter continued to be a good.
Period for filling storage units.
Looking at our occupied unit count at the end of June we had an increase of 98000 occupied units compared to the same time last year and the.
That continued to improve into July.
Storage revenues were up $28 million, which is about 26% increase for the quarter.
And our all in blended occupancy rate experienced an increase of 12%.
2 and 80% average for the entire quarter.
Most of our storage competitors that report publicly share some type of stabilized occupancy figure.
Our version of that 4.
And 4 facilities that have been and 80% occupancy for at least 2 years.
That represents a little over 45% of our locations.
Those locations had an average occupancy of 96, 7% versus 92, 4% of the year before.
Now this represents the facilities that have been on 80% for 2 years, but we have a large group of facilities that have opened up in the.
And between the last couple of years.
We are seeing that those properties also.
And also of reaching 80% and fact, nearly 80% of our locations ended June with 80% occupancy or better.
For the first quarter of fiscal 2022, we have invested $184 million and real estate acquisitions.
Along with self storage and U box warehouse development of compared to $103 million last year.
Our goal is to increase the pace of this investment.
We currently have just under $6.8 million, new square feet and development across approximately 140 projects.
And our acquisition pipeline is now beginning to accelerate.
We have approximately $250 million of deals and escrow that may or may not close.
And the moving and storage segment revenue growth continues to outpace expense growth, resulting in margin improvements.
For both the GAAP operating margin total cost to total revenue as well as the EBITDA margin, we posted improvements compared to the first quarters of either of 2000 and fiscal 2021 or fiscal 2020.
Operating expenses and the quarter increased by $122 million compared to last year.
If you compare those costs to the year before were up $79 million.
And the press release, and and our filing we highlighted the $34 million increase and fleet repair and maintenance compared to last year.
Fleet activity was at a low point last year at this time.
The compare those costs against the first quarter of the year before we're showing a lot of $6 million increase and repair costs.
Due to this dislocation of business last year from Covid Youre going to see reported increases in maintenance and repair cost during this year.
Other categories that experienced large increases during the quarter of personnel.
Shipping costs associated with U box moves liability costs.
And payment processing costs associated with the large increase in revenue.
After 3 consecutive quarters of declines and equipment depreciation we saw the debt number increased this quarter and is likely going to continue on that direction as we take delivery of new equipment.
Before I hand, the call back to the operator I would also like we'd also like to thank and congratulate.
Our life insurance team over at Oxford for the recent upgrade they received from a M best to an a rating it's been a long term goal of theirs and they finally achieved it.
So with that I'd like to hand, the call back to our operator Carrie to begin the question and answer portion of the call.
We will now begin the question and answer session.
To ask the question you May Press Star then 1 on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing and the keys to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble our roster.
Our first question is from Steven Ralston with Zacks. Please go ahead.
Good morning, and.
Congratulations on the amazing top line revenue grain and the.
The rental business.
Thanks, David.
I'd like to delve into that somewhat.
And you've given.
Given a lot of information about the volume of transactions going up and the average revenue per transaction and both and in town and in 1 way rentals.
But the gateway is so large.
And especially when you as you did compare it to 2020.
Actually it turns out to be like of 16% annualized gain.
If you look over 2 years.
Yeah.
In the past you've mentioned something like they've been double digit increases in volumes.
Average revenue.
Per transaction.
At this time you.
Didn't mention something that am I supposed to assume that this gain was done on the single digit gains.
The transaction increases of about half of it.
Yes.
You also give a clue that.
Yes.
And the expenses.
The expenses on the equipment.
We're higher.
Obviously due to the higher usage and preventative maintenance.
But that flows through to how you received generated this revenue gain.
Can you expand upon that.
Sure.
The maintenance and repair cost increase but still at a rate slower than.
Then the top line growth. So we still picked up some margin even with the increase and the repair and maintenance costs and what we are.
The 2 biggest drivers on a normal basis for repair and maintenance and on.
And our business is going to be miles driven by the fleet, which our ops overseeing and increase and preventative maintenance costs and the.
And costs associated with prepping the fleet for sale.
So we did sell more units this year than last year because of the commercial auto auctions were largely shut down during the first quarter of last year.
If you compare our sales volume to 2 years ago.
And we're actually a little bit below the sales volume from the first quarter of 2 years ago.
The increase and the gain on disposal of equipment is largely from improved.
Sales price.
Per unit.
So the the increase and repair and maintenance from 2 years ago. The is much more moderate I think I mentioned it was only about a $6 million increase.
Compared to those periods largely from just the increase in mileage.
Okay.
Okay.
Hydrotaxis from of different.
Direction.
Your product and services and the self moving side.
Up.
Only half the amount of the.
The rental revenue was was the other way up $14.8 versus $36.5 for the rentals.
Usually those move in tandem.
Can you explain the disparity sure on on <unk>.
There are 3.
I'll call them product categories within retail sales of the largest is moving supply sales.
The next would be the sales of towing accessories, and the installation of hitches that and propane sales.
So.
We have large increases and all 3 of those categories last year.
We've seen.
The hedge sales slowdown.
From from last year, I think we saw.
4 of 5 months in a row of kind of record of hedged sales as people were going out and recreate and and new ways.
So I think demand has come off a bit and also we had a pretty good inventory of hedges going into COVID-19, there's been supply issues related to <unk>.
Hedged supplies that debt probably have caused a few problems as well propane.
And just an issue of volume.
That kind of ebbs and flows with weather conditions around the country.
And then moving supply of sales.
Our.
Closer to the increase and transaction growth on the <unk> side.
So that's still tracking relatively close.
Okay.
Traditionally your second fiscal quarter is slightly stronger than your first fill.
The quarter.
You mentioned that the so far of July is tracking well.
Should I expect that traditional relationship to continue on the next quarter should be slightly stronger than the 1 you just reported top line.
Well this is Joe I surely hope so.
And.
July was good so I would surely hope so, but I don't think anybody knows all the drivers.
Of this.
Moving activity so.
We're planning for it to be very busy.
Thank you.
Just looking at the Capex, you mentioned that you did spend $304 million.
And on truck and trailer sales.
Which is slightly higher.
But I didn't see.
A similar.
Increase in the amount of depreciation which I assume.
The purchase of its very late late in the quarter.
And the equipment.
Yes, it was coming and fair.
Early regularly throughout the quarter I think you have some some trucks dropping off of there we did see.
Yes.
If you exclude the gains from the sale of equipment that depreciation line went up so.
And I don't have the right in front of me, but we did see a few million dollar increase and equipment depreciation for the quarter and and I think that will keep keep climbing.
And last question looking at your other revenue line it was actually the.
So for net interest on the.
And the strongest.
Percentage change of home.
And the 67%.
And it seems to be driven as you mentioned in the U box program.
This is still and I would think and ATM stage and that should get much larger over time.
The first is that accurate and second of all of it does would that become a separate line item and your.
Revenue lineup.
Well I'll tackle the tactical question and then I'll, let Joe comment on the program. So the.
The.
There's a couple of test to determine when you have to break a line out of revenue line out certainly the growth we're checking the boxes. There I think as a percentage of total revenue, it's not quite there yet.
We're likely to hold out until we're forced to report that.
And to confirm the majority of that increase is coming from the U box program.
And as to just the business in general is clear of consumers have an appetite.
And for.
The move of this type.
And just.
And just remains to be seen how well we execute.
I think of.
We execute I believe the demand is there so.
So our plan is that a real growth.
Thank you for taking my questions.
Thank you.
The next question is from Jamie Wilen with Wilen management. Please go ahead.
Hi, Fellows congratulations on the quarter I believe that was the.
The largest profit quarter and the history of the company is that true.
Hi, it's real close.
Third quarter or second quarter of last year was approaching but not quite.
Okay.
The.
A question just to ask about your box you said once it becomes a certain percentage of total revenue, we will have to break that out.
Does that percentage.
And just the accounting rule I think it's about 10%.
Okay.
Okay and the.
The profitability of U box now that it's starting to get some traction is it nearing the corporate average.
Yes.
I mean.
That's all of the game, if all of game and how you allocate cost chain and Ive said that and we're always.
With all of the interplay between product lines as best as we can estimate yes.
And is contributing to the profitability of the company and its not quite at the overall percentage based upon how we're measuring it right now, but it's still of a benefit.
Gotcha.
And the self storage area as <unk> had to <unk>.
Slowdown the new facilities.
It's been incredible of what's happened to the company.
A greater percentage of our units are maturing.
Historically I thought it takes at least 3 years 4.
Our new unit to become cash flow positive, but if im hearing within the industry.
People like life storage or having units at a 100% of occupancy and having to move things away.
It seems like these newer units, maybe actually be filling up and at least that pace and then beyond that given that the industry.
And you Couldnt add a lot of new facilities and is reaching a higher level of occupancy could you talk about rental rates within the industry.
And so the George this is Joe.
There'll be some.
Increases selectively we do all of our increases.
Model by model by store.
No.
We don't do of general and I don't think anybody does of general 2 per cent or 3% type of increase most everybody is very specific.
We'd expect as rooms.
Approach or exceed 90% and youll see some rental rate increases.
There is considerable.
Considerable discussion amongst.
Frontline managers is to house the portable this will be.
Because they see the customers and the customers arent necessarily.
Possessing a lot of.
More discretionary income so.
There's a lot of the disruption in the economy.
It has resulted and everybody that I know on the storage business being higher occupancy.
With the resulted in.
Essentially every case.
Rooms filling.
Quicker than the historically have built.
We're enjoying the I believe.
True with the most everybody of the business.
Alright.
Having the right mix and being in the right <unk>.
Patients is kind of going to influence whether we.
And are able to see rate increases.
2 or 3 of 4 years.
It's our hope to do that.
We don't feel as though.
Optimistic about that as the.
Current occupancy would show and other words were not.
This had been 10 years ago, and we had these occupancies.
We'd be raising rates just as quick as we can so theres going to be some rate increases.
Theres a whole complicated thing going on here, Jamie with inflation, what people are paying for new units and what we.
We're going to be able to charge I think the good news is we got a lot of units that are up and running.
But as we put new stuff and it's going on at <unk>.
On the high cost.
And that's the same thing as the with all of our competitors. They do a lot of buying units and <unk>.
They're expensive to buy them.
So.
What that means is what's going to be the most profitable going ahead.
And there's the guarantee.
So far.
I don't have the dead loser on my hands of any of the last day of 150 stores the volume.
And so that makes me feel pause and that we're executing.
Pretty decently EBIT.
And the past I've had the losers 20 years ago pet stores and 5 years to fill the lessors.
And frightening thought we're not seeing any of that activity right now.
So hopefully we will see some rate increases.
I'm really confused and I think our people are as too.
What is driving this and what this.
The next round of the evictions or no evictions or whatever.
Critical thing that point of view.
While the effect, it's going to have that clearly will have an effect per.
<unk> boost occupancy more really.
I don't know what per se.
And thanks to the original question of how of these units filling up a little quicker than you had anticipated or are you seeing that is the our units achieving that 80% occupancy rate.
Or whatever it takes to be.
Free cash flow breakeven at.
And at a quicker timetable than it had been.
And previously.
Absolutely of not where I'm going to and I will say there is a new timeframe okay.
No.
I have a story and looked at yesterday.
The manager corporate and 6 months growth.
Over 400 units every 1 of those the debt.
It would be wonderful day and of course, I set that as the benchmark with the rest of the managers of encourage them.
And it can be up 400 units, but if you can be of 400 units and the 6 months you got a winner on your hands and.
And youll be positively cash flowing.
Total 2014 months out.
That's incredible and as you look at occupancy rates and the March quarter. Your occupancy rate was 74% I believe you said now at the end of June is 80 are we pushing up occupancy rates literally 1% to 2% each month.
Yes, but you can see we're not.
Not adding the units as fast as I would like and kind of up.
A little bit to your chagrin, sometimes I'm always trying to get more capacity out there, okay, and so what's really had a big impact of that.
Our inability.
I'll, let Jason correct me, if I'm wrong, but we did something like.
And 3.5 million units trailing 12 months and before that.
We were running 4 and a half or over 5.
Yes.
Our peak and a 12 month period was adding.
About a little over 6 million square feet is what we've done at our peak. So we've certainly slowed I think the number of rooms that we've added and the last 12 months is maybe closer to.
38000.
I do believe that we've doubled the pace at which we're filling the rooms. So normally as a rough estimate looking back over the last 3 or 4 years were filling about 10% of the rate of available rooms are getting filled each year and we're twice that pace right now so it's a combination of.
And the pace of adding rooms has slowed a bit but we've also sped up.
Many of rooms per fill it.
As a shareholder I'm kind of pleased that the.
And that the percentage of new units doesn't overwhelm.
Our core anymore.
And maybe 10% of our core units as opposed to opening up 15%.
And we still have plenty of growth ahead.
Within that.
Last question and I'll hop back in the queue.
The earning a decent amount of money we've always done.
Over the last however, many years just special dividends is there any reason that you hold on.
We won't announce a regular dividend policy and then do special dividends beyond that.
Given that and.
This past quarter, we earned $350 million yet.
Pay that of dividend of $10 million, which is nice, but it seems like.
We could have a regular dividend and then pay extra beyond that.
I'll speak to that I don't have of for sure comment part of the opt.
Opportunity with me as I have a very long frame of reference and so I remember many years with no dividend, but all of the.
And loads 2 of problems something I'm not going to perform on.
But.
I think your comments are heated and the representative at the board level.
So it's not a.
And that's not a closed the discussion.
The closed book.
Okay, great job of managing the business. These are incredible results.
Thank you ladies and gentlemen.
The next question is from Craig Inman with Artisan partners. Please go ahead.
Hey.
And I was curious about the adjacent Neil mentioned, the and Joe mentioned, the pickup and the.
The pipeline for self storage and obviously the cost pressures there in terms of building.
And some compression in cap rates. So can you talk about how you keep your discipline in terms of.
Sure.
Building that backlog and not compressing returns.
Keith and the <unk>.
The return profile on that investment.
We will of course.
Great deal of the bid.
We wanted to get enough mass going ahead, and so you saw on the over the last 5 years.
Drive very hard and trying to add more total mass.
So the point, we got enough financial mass there, that's going to kind of itself on pump.
And as and and make the returns so.
There's not an exact science to it but we're a heck of a lot closer to it today than we were 3 years ago.
I'm not sure we're quite there again.
I lost from my point of view of momentum over.
Last 18 months first because.
Covid scared us I think the first 90 days.
And then after that it was just really just been really hard to get things rolling because of both supply chain problems and of.
Of the general.
Labor market, it's hard to.
It's hard to find framers or cement finishers are and all of these trades.
Our title of the.
But I would rather of had another million half square feet on the books right now I think I would've filled more rooms by the head more.
Available sites because there's.
1 is is that a given the site.
<unk>, that's an opportunity.
You can open an entire new point.
There you can gain a lot more and our new <unk> might have.
Somewhere between 600 of 1100 rooms, depending on what was going on and.
It will it will contribute more to overall rooms rented.
And then what I can get taking.
And from 80 to 90.
Okay, but you all aren't.
Decreasing.
And trying to build and rebuild that momentum and they're a decrease and the required return that.
To get that going.
Well.
Jason kind of his financial and otherwise set the return on <unk>, but keep the low risk there per se.
So I have not been successful and getting them the back down below it.
Puts us in the Jam and of course, it's always and retrospect did you Miss the good 1.
And I can say I've missed more good ones then made mistakes so.
That might be a good thing from some of these point of view of UC.
But.
I don't want to Miss out on too many deals you see we continually.
Get outbid on all of these big deals people, bringing it down and there are always bidding more money than we are comfortable bidding.
And but still we are.
As Jason said, we did $6.5 million.
Square feet, 2 and a half years ago, we can we can do that much and and.
And the snowball is getting bigger so absorbing it becomes easier than it was 2 years of 3 years ago to absorb that much.
And we're footage of visit.
A portion of the whole to smaller amount.
Right.
Sure.
I'm curious about and the labor the.
The job openings and wanting to fill them I mean, what goes through your head in terms of how to.
On <unk>.
Resolve that issue.
Is it does it just take time to wages need to go up on me.
What is the the background conversation for management of there.
It's a little bit of everything.
Making you're on boarding.
Process much simpler less confusing.
Considering.
Personnel you might have rejected for some other reason and prior years.
And maybe youre going to give them a chance and evaluate how they actually work for the first week or 2.
It's making the.
Work attractive.
We're not a.
Starbucks and it's hard to say.
Happy environment pretty girls.
Okay.
And the environment here.
So the half 2.
And we're kind of sorting for people, who are a little bit more hard work oriented and thats not an easy sell would speak.
At least talking to my recruiters.
They're not 10 minutes into the deal and the people of asks can they work from home while non.
Probably you will see.
The very likely and we have some phone operators and such but.
By and large the bulk of our personnel are either.
Fixing equipment, our dispatching and received the equivalent to where physical thing.
It's generally exposed to the weather.
That's not an attractive.
Proposition, so we're having to work at how to communicate that and attractive manner to the right person and.
And.
But we're still learning.
I have the daughters 'twenty 3 and.
She told me here of about 10 days, which is adjusted.
And I can't get any of my friends to cut the workforce.
Yeah.
And he says you to the all want to work from home of licensed I understand of the App.
But.
And of course, and my daughter actually works and the store has for 2 years and of course, she's not working from all of this morning. She is putting a hedge on the car.
The very physical thing so how to get the young woman to be.
Interested to put of hits on the car.
And is a little bit we're still learning how to do that right I have been lucky with hershey's interest.
But.
And there's not that many women yet as everybody knows I need to be higher and more women and getting more women and management positions and solvay.
We're going to have to come up through that.
The program so.
There is not a simple cure and site I don't know if cutting back all of my managers complain about.
It's too easy to get on unemployment that pace too much I don't know they have changed and that is going to actually change the darn thing.
But the.
The question is are a bunch of these people even going to come back to work at all.
The answer to that question all.
Obviously this has been slow for us.
And back right now almost 250.
Maintenance technicians.
Lot of work.
And that's not going to feel real quick so.
But we need all of that work done or the customer needs and that we can't just ignore it.
And we don't.
We can't turn to contractors very easily on most of the stuff.
Most of our.
Things like this maintenance of our dispatch and receive require us where the 1.
Kind of ice on the whole we have is what we call U haul dealers and they do over slightly over half of our.
Truck and trailer business.
And there's we're attempting to gear that up right now because they can come on board, perhaps that we can locate them.
They can come onboard they already have the small business of the road.
And the typically just add you hold to their existing business.
And that gives them a little bit more revenue and it gives us of course of the other point.
No.
That's kind of on the east and the whole we have and.
I believe Jason you might correct me if I believe.
And they've grown a little bit faster and revenue over the last 18.
While the 12 months and our stores.
The the dealer network was hit harder by Covid last year. So we've seen that bounce back and it used to be about a 50.50 split in the revenue it dropped down several percentage points, leading up the COVID-19 at the enduring Covid and now it has been coming back as the dealer network is picking up.
And more of its share.
As the rest of world.
The closer to where it historically, which isn't which is a bright line from my point of view because these are people.
They are not employees of ours they are actually.
Independent agents, so bringing them on doesn't give me a bunch of HR.
<unk> opportunities.
And there's no there's no simple solution.
And I learned and the interesting thing and the other day I don't think Im sure Youre seeing at the.
Fast foods are all putting of wage and the window of 15 or 16 Bucks an hour.
Well I had somebody go there actually took the job.
And they were advised when are they actually on boarded but that was a shift differential and expect it to go away and September.
So there is.
There is a little bit of normal.
And <unk>.
Hustle going on and this market and.
I'm not sure I want to start people at of wage and and decrease it 3 months later on.
So there's just a lot of activity and we are just.
We're in their deal.
Yeah, Yeah, you don't want to.
And let the pressure and are immediately but are operationally is this too many positions on Phil but it's obviously the results right now don't show any distress or any operational travel, but how long bearing we're on.
And where.
Wearing out the workforce everybody's Max ever.
Everybody's.
Sure shuffling around things like vacation days, and this sort of thing and an effort I have a very.
Dedicated work.
Our group and they want to.
Certain of the customer and they are willing to do quite a little bit to get that done but.
And 1 point that I'll need to take their vacation.
There is a limit to.
To this and Theyre and Theyre constantly.
Operating.
Pretty close to full speed normally in a work day, you have kind of some ebb and flow and you can kind of say well I'm going to get to sit down here at the 11 o'clock it'll slow down pretty.
Pretty much Lee.
On your feet all day long move move move Theres no real Ed.
Because when it's hitting hard.
We're little overrun and so as soon as that ebbs were immediately trying to catch back up and Thats kind of been the.
The.
Situation of all of our retail levels and we have a lot of lot of our personnel obviously, the operating right at the retail level.
Okay.
I was curious on the you know Theres a comment.
Jason last quarter, I believe on lifting and extending the duration of of.
The loans on the real estate side any update there in terms of.
The financing are obviously these assets have become a lot more valuable and the last 12 months.
Any change in plans there.
Hi.
Still think its a great environment to lock rates and getting back to your original question.
1 of your first question is about how are we maintaining price discipline for our return.
The return is predicated on the amount of the equity that you invest and 1 of the variables being the debt amount and the cost of debt and.
And if we can.
Adjust that variable on our model. It gives you a little bit more room.
And to operate within that model so.
We are of a number of things that are still in process right now.
But and.
Liquidity is at a high point and its likely to go a little bit higher.
And we're going into a cycle of.
Where we expect to reinvest heavily against similar to what happened during the day.
Time period, when we sold a portion of our Chelsea, New York location and took that money and reinvest it back. So I think we'll see a similar several years ahead of us.
Okay.
Alright.
I'll ask 1 more on the the truck shortage.
How long can you guys keep this fleet if you can't replace it obviously, we win and the downturn with the newest fleet ever.
And any issues there.
Of course, there is and it really depends on how much maintenance maintenance and capex or just the.
The different sides of the same store.
So we'll have to pop maintenance.
The little bit limited by our ability to gear up of work.
Very actively doing it will be adding a couple of.
And we replaced 5 or 6.
The repair facilities and the last 12 months and months.
And I would hope to do that again and again youre expanding capacity.
But then you have the staff just out of the buildings and such doesn't do it. So we're going to see some increased maintenance.
Because youre just run on the mile.
As you said and went into this with the terrific fleet.
And.
And.
That still is in good shape, but it's.
Just going to burn more returned all of the subject.
And Craig.
Are getting some new trucks and so we're about twice where we were last year at this time, but about half of where we were at 2 years ago.
Okay.
Okay.
Okay.
That's it for me right now thank you.
This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks.
And this Jason and I wanted to Bob.
Before handing it back to Joe I wanted to thank everyone for participating and media and remind you that on Thursday August 19th day of a few important meetings for shareholders.
9 of Arizona time.
And I'm going to start off with our annual stockholder meeting and Theres. The once again and going to be of live video feed broadcast over the Internet and.
And then 2 hours after that at 11 o'clock, Arizona time, we're going to do our virtual analyst and Investor meeting.
Joe is going to be moderating and both of these meetings and we will have some.
The other executives available for questions and answers.
Please feel free to start submitting those questions to Sebastian ahead of time.
Last year, we had great participation before the meeting I think we actually got more questions and we had time to answer but we look forward to speaking to you and a few weeks.
Well thanks, Jason.
And I, thank everybody for their support.
We're going to have a busy 12 months ahead of us and ball.
I expect to turn on and good results. Thank you again.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.
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