Q4 2025 U-Haul Holding Co Earnings Call
Okay.
Unknown Executive: Good morning, ladies and gentlemen, and welcome to the U-Haul Holding Company's fourth quarter fiscal year-end 2025 investor conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the U haul holding company's fourth quarter fiscal year end 2025 Investor Conference call.
Speaker Change: At this time all lines are in listen only mode.
Following the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for the operator.
Unknown Executive: This call is being recorded on Thursday, May 29, 2025.
This call is being recorded and Thursday may 29th at 20 to 25 or I would now like to turn the conference over to Sebastian Reyes. Please go ahead.
Sebastien Reyes: I would now like to turn the conference over to Sebastien Reyes. Please go ahead.
Sebastien Reyes: Good morning, and thank you for joining us today. Welcome to the U-Haul holding company fourth quarter fiscal year end 2025 investor call.
Sebastian Reyes: Good morning, and thank you for joining us today welcome to the U haul holding company fourth quarter fiscal year end 2025 investor call.
Sebastien Reyes: 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 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risk and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected.
Sebastian Reyes: 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, a of the Securities Act 1933, as amended and section 21 E of the sick.
Sebastian Reyes: Curious exchange act of 934 as amended.
Sebastian Reyes: Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.
Sebastian Reyes: Certain factors could cause actual results to differ materially from those projected.
Sebastien Reyes: For discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-K for the year ended March 31, 2025, which is on file with the U.S. Securities and Exchange Commission.
Sebastian Reyes: For a discussion of the risks and uncertainties that may affect the company's business and future operating results. Please refer to the Companys public SEC filings and Form 10-K for the year ended March 31, 2025, which is on file with the U S Securities and Exchange Commission.
Joe Shoen: I'll now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company. Hello, everybody. What you see, especially in our fourth quarter results. are decisions made in prior years working their way through the financial state.
Speaker Change: I'll now turn the call over to Joe showing chairman of U haul holding company.
Sebastian Reyes: Yes.
Joe Showing: Hello, everybody.
Sebastian Reyes: What you see especially in our fourth quarter results.
Sebastian Reyes: Our decisions made in prior years working their way through the financial statements.
Joe Shoen: On a more positive note, The original equipment manufacturers appear to have decided to make Reliable Fuel Efficient Ice Vehicles in Volume at Improved Prices. OEMs and U-Haul both need to get some Emissions Regulation Relief from the Administration. to be able to better serve our customers with truck products. U-Haul, in the meantime, has defleeted three quarters of our pickup fleet. As we see no path to profitability with more than a small specialized Resale prices. on both vans and pickups. are steady or improving. I expect we may struggle through October. on Resale Pricing, but beyond that. It appears to be a clerical.
Sebastian Reyes: On a more positive note.
Sebastian Reyes: The original equipment manufacturers appear.
Sebastian Reyes: <unk> decided to make.
Sebastian Reyes: Reliable fuel efficient ice vehicles.
Sebastian Reyes: Volume.
Sebastian Reyes: At improved pricing.
Sebastian Reyes: Okay.
Sebastian Reyes: Oems and new whole both need to get some.
Sebastian Reyes: The emissions regulation relief from the administration.
Sebastian Reyes: Be able to better serve our customers.
Sebastian Reyes: With drug product.
Sebastian Reyes: You hole in the meantime has deeply needed three quarters of our pickup fleet.
Sebastian Reyes: As we see no path to profitability with more than a small specialized pickup.
Sebastian Reyes: Resale prices.
Sebastian Reyes: On both bands and pickups.
Sebastian Reyes: Our steady or improving.
Sebastian Reyes: I expect we may struggle through October.
Sebastian Reyes: On resale pricing.
Sebastian Reyes: <unk>.
Sebastian Reyes: It appears to be a clearer picture.
Sebastian Reyes: Okay.
Joe Shoen: Our customers are expressing optimism.
Sebastian Reyes: Our customers are expressing optimism.
Sebastian Reyes: Let me start truck share customers.
Unknown Executive: Unknown Speaker 0 Storage remains a bright spot wherever we execute with precision. Our programs work. It's a less bright spot where we execute with less.
Sebastian Reyes: Storage remains a bright spot.
Sebastian Reyes: Wherever we execute with precision.
Sebastian Reyes: Our programs work.
Sebastian Reyes: It's a less bright spot, where we execute with less precision.
Joe Shoen: Both self-move and self-store are Consumer Needs, and I expect those needs to continue.
Sebastian Reyes: Both sales moved with self store or <unk>.
Sebastian Reyes: Consumer needs.
Sebastian Reyes: Expect those needs to continue.
Joe Shoen: It is my challenge to make U-Haul the customer's best choice.
Sebastian Reyes: It is my challenge to make you hold the customer's best choice.
Jason Berg: With that, I'll turn it to Jason to kind of get specific on the numbers. Thanks, Joe.
Jason: With that I'll turn it to Jason to kind of.
Jason: Specifics on the numbers thanks, Joe.
Jason Berg: So yesterday we reported a fourth quarter loss of $82.3 million compared to a loss of $863,000 for the same quarter last year. Our full year fiscal 2025 earnings over $367.1 million down from $628.7 million in fiscal 2024. In terms of earnings per share, the fourth quarter of this year was a 41 cent per share loss per non-voting share loss as compared to less than a penny a share loss in the fourth quarter of fiscal 2024. Earnings before interest taxes and depreciation, EBITDA, that are moving in the storage segment increased by $5.6 million for the quarter to $217.3, largely from revenue growth.
Jason: So yesterday, we reported a fourth quarter loss of $82 3 million compared to a loss of $863000 for the same quarter last year.
Jason: Our full year fiscal 2025 earnings were $367 1 million.
Jason: Down from $628 7 million in fiscal 2024.
Jason: In terms of earnings per share the fourth quarter of this year was <unk> 41.
Jason: <unk> per share loss for nonvoting share loss.
Jason: As compared to less than a penny a share loss in the fourth quarter of fiscal 2024.
Jason: Earnings before interest taxes, and depreciation EBITDA at our moving and storage segment increased by $5 6 million for the quarter to $217 three <unk>.
Jason: Largely from revenue growth.
Jason Berg: Our full year fiscal 2025 EBITDA increased by just under $52 million to $1,619,700,000.
Jason: Our full year <unk>.
Jason: Fiscal 2025, EBITDA increased by just under $52 million to $1 $619 7 million.
Jason Berg: Included in our earnings release and financial supplement is a reconciliation of EBITDA to gap earnings. I'm going to highlight three large differences between the two. First, fleet depreciation from the increased level of fleet acquisitions and the cost per truck over the last several years. Second, the reduced gains on the sales of retired pickups and cargo vans. And third, the declining interest income at the moving and storage segment as we've reduced our short-term cash balances due to reinvestment. Of the $0.41 decline in earnings per share for the fourth quarter, about $0.16 was from fleet depreciation, $0.12 from the decrease in gains on sale of rental equipment, and $0.10 from the decline in interest income.
Jason: Included in our earnings release and financial supplement.
Jason: Reconciliation of EBITDA to cash.
Jason: GAAP earnings.
Jason: Highlight three large differences between the two first.
Jason: Fleet depreciation from the increased level of fleet acquisitions in the cost per truck over the last several years.
Jason: Second the reduced gains on the sales of retired pickups and cargo vans.
Jason: And third the declining interest income at the moving and storage segment as we reduced.
Jason: Our short term cash balances due to reinvestment.
Jason: Of the 41.
Jason: Decline in earnings per share for the fourth quarter sixth about 16 was from fleet depreciation.
Jason: <unk> from the decrease in gains on sale of rental equipment and 10 from the decline in interest income.
Jason Berg: For the fourth quarter, our Equipment Rental Revenue Results had a $29 million increase. just over 4%.
Jason: For the fourth quarter, our equipment rental revenue results had a $29 million increase.
Jason: Just over 4%.
Jason Berg: Of note, during the prior year, we benefited from the extra day attributable to the leap year. I mention that because it added somewhere around $11 million to last year's results. For the fiscal year, we finished up just over $100 million for equipment rental revenue. That's about a 2.8% increase. During the fourth quarter, both our one-way and in-town transactions increased compared to last year at that time, as did our revenue per transaction. Our trailer and towing fleets also experienced improved revenue results. For the month of April and now into May, we've seen revenue continue to trend positively compared to the same period as last year.
Jason: Of note during the prior year, we benefited from the extra day attributable to the leap year I mentioned that because.
Jason: It added somewhere around $11 million to last year's results.
Jason: For the fiscal year, we finished up just over $100 million.
Jason: For equipment rental revenue.
Jason: Two 8% increase.
Jason: During the fourth quarter, both our one way and in town transactions increased compared to last year at that time.
Jason: As did our revenue per transaction.
Jason: Our trailer and towing fleets also experienced improved revenue results.
Jason: For the month of April and now into May we've seen revenue continue to trend positively compared to the same periods last year.
Jason Berg: Capital expenditures for new rental equipment for fiscal 2025 were $1,863,000,000. That's a $244 million increase compared to fiscal 2024. While proceeds from the sales of retired rental equipment declined by $76 million to a total of $652 million. This is a combination of fewer pickups and cargo vans sold, along with slightly lower average sales proceeds on the units that we did sell.
Jason: Capital expenditures for new rental equipment.
Jason: Fiscal 2025 were $1.863 billion.
Jason: $244 million increase compared to fiscal 2024.
Jason: While proceeds from the sales of retired rental equipment declined by $76 million to a total of $652 million. This is the combination of fewer pickups and cargo vans sold.
Jason: Along with slightly lower average sales proceeds on the units that we did sell.
Jason Berg: Our initial projection for Net Fleet CapEx in fiscal year 2026. is $1,295,000,000. That's compared to approximately $1.2 billion in fiscal 2025.
Jason: Our initial projections for net fleet Capex in fiscal year 2026.
Jason: $1 billion $2 95.
Jason: As compared to approximately $1 billion to 11 in fiscal 2025.
Jason Berg: Switching to self-storage, revenues were up $18 million, or 8% for the quarter. Our 12-month results were also up 8%, or just under $67 million. Average revenue per occupied foot continued to improve across the entire portfolio, up approximately 1.6%. And if you look at just the same store piece of that, we were up 3%. Our average move-in rates for the same store portfolio were up just over four and a half percent compared to the fourth quarter of last year.
Jason: Switching to self storage revenues were up $18 million or 8% for the quarter.
Jason: Our 12 months results were also up 8% or just under $67 million.
Jason: Average revenue per occupied foot.
Jason: Continued to improve across the entire portfolio.
Jason: Approximately one 6% and if you look at just the same store piece of that we were up 3%.
Jason: Our average move in rates for the same store portfolio were up just over four 5% compared to the fourth quarter of last year.
Jason Berg: Our occupied unit count at the end of March. was up just over 39,000 units compared to the same time last year. This time last year when we were talking, that same statistic was a 31,000 unit improvement. So we picked up the pace a bit compared to where we were at last year.
Jason: Our occupied unit count at the end of March.
Jason: It was up just over 39000 units compared to the same time last year.
Jason: This time last year, when we were talking that that same statistic was a 31000 unit improvements. So we picked up the pace a bit compared to where we were at last year.
Jason Berg: During fiscal year 2025, we added 82 new storage locations, six and a half million new net rentable square feet across 71,000 new rooms. Our average occupancy ratio across all of our own locations during the fourth quarter declined about two and a half percent to just over 77 percent. If you look at just the same store portfolio, average occupancy experienced about a 50 basis point decrease to 91.9 percent.
Jason: During fiscal year 2025, we added 82, new storage locations.
Jason: $6 5 million, new net rentable square feet across 71000, new rooms.
Jason: Our average occupancy ratio across all of our own locations during the fourth quarter declined about two 5% to just over 77%.
Jason: If you look at just the same store portfolio average occupancy experienced about a 50 basis point decrease to 91, 9%.
Jason Berg: During fiscal 2025, we invested $1,507,000,000 in real estate acquisitions along with self storage and U-Box warehouse development. That's a $249 million increase over the previous year. During just the fourth quarter, we added 1.6 million new net rentable square feet. About a million and a half of that was newly developed locations, along with expansion at existing facilities.
Jason: During fiscal 2025, we invested $1 billion and $507 million in real estate acquisitions along with.
Jason: Self storage and U box warehouse development.
Jason: $249 million increase over the previous year.
Jason: During just the fourth quarter, we added $1 6 million, new net rentable square feet.
Jason: About 1 million and a half of that was newly developed locations along with expansion at existing facilities.
Jason Berg: We currently have just under 7 million new net runnable square feet being actively developed and another 8 million square feet in the pipeline behind that.
Jason: We currently have just under 7 million, new net rentable square feet being actively developed in another 8 million square feet in the pipeline behind that.
Jason Berg: Our U-Box revenue results are included in Other Revenue in our 10-K filing. This line item within the Moving and Storage segment was up just under $14 million, of which U-Box was primary contributor. We are seeing both U-Box moving transactions and the related storage transactions grow. Over the last 12 months, we've increased our covered storage capacity or warehouse space for these containers by nearly 25%. We're going to continue to see growth in that area.
Jason: Our U box revenue results are included in other revenue in our 10-K filings.
Jason: This line item within the moving and storage segment was up just under $14 million of which <unk> was primary contributor.
Jason: We are seeing both U box moving transactions and the related storage transactions grow.
Jason: Over the last 12 months, we've increased our covered storage capacity our warehouse space for these containers by nearly 25% and we're going to continue to see growth in that area.
Jason Berg: Operating expenses at moving and storage were up $53.6 million. Starting off on a positive note, we had another quarter of declining fleet repair and maintenance costs, this time down $6.7 million. Some of the larger expense increases that we had, personnel costs were up $12.8 million, although that was largely in line with our revenue increase. Other costs, including utilities, property taxes, and shipping costs associated with our U-Box moves were up a little over $11 million.
Jason: Operating expenses, moving and storage were up $53 6 million.
Jason: Starting off on a positive note, we had another quarter of declining fleet repair and maintenance costs. This time down.
Jason: <unk> 7 million.
Jason: Some of the larger expense increases that we had personnel costs were up $12 8 million, although that was largely in line with our revenue increase.
Jason: Other costs, including utilities property taxes, and shipping costs associated with our U box moves were up a little over $11 million the largest outlier for the quarter was.
Jason Berg: The largest outlier for the quarter was our liability costs associated with the fleet were up $27.8 million.
Jason: Our liability costs associated with the fleet were up $27 8 million.
Jason Berg: As of March, end of March, our moving in storage segment had cash and availability totaling $1,348,000,000.
Jason: As of March end of March our moving and storage segment had cash and availability totaling $1 $348 million.
Unknown Executive: On our Investor Relations website, investors.uhaul.com, we posted some supplemental materials. In addition to earnings release and 10K filing, they're right on the front page for you to click on.
Jason: On our Investor Relations website at investors <unk> Dot com, we posted some supplemental materials.
Jason: In addition to the earnings release and 10-K filing that are right on the front page for you to click on.
Unknown Executive: With that, I would like to hand the call back to our operator, Constantine, to begin the question and answer portion of the call. Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: With that I would like to hand, the call back to our operator Constantine to begin the question and answer portion of the call.
Constantine: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone, you'll hear a prompt that your hand has been raised.
Unknown Executive: Should you have a question, please press star followed by the number one on your touchstone phone. And you will hear a prompt that your hand has been raised.
Unknown Executive: Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please make sure you lift your handset before pressing any keys.
Jason: Should you wish to decline from the polling process. Please press star followed by the number too.
Jason: If you are using a speaker phone. Please make sure you lift your handset before pressing any keys.
Stephen Ralston: Your first question comes from the line of Stephen Ralston from Zax, please go ahead. Good morning. Morning. Um, looking through the numbers, I noticed, and obviously you're in a seasonal business, that the fourth quarter was basically the strongest in the last six years, exiting out 2021, which was an exceptionally strong year. I'm interpreting this as the business itself, the top line business is getting stronger. Oh, first of all, I... like to see if that you can interpret that as I do. And secondly, I know, Joe, he talked, I asked him last year, at the beginning of the fiscal year, what he was outlook was for given his decades of experience was for the coming year.
Speaker Change: Our first question comes from the line of Steven Ralston from Zacks. Please go ahead.
Steven Ralston: Hey, good morning.
Speaker Change: Good morning.
Speaker Change: Looking through the numbers I noticed and obviously you're in a seasonal business.
Speaker Change: The fourth quarter was.
Speaker Change: Basically the strongest in the last six years exiting 2021, which was an exceptionally strong year.
Speaker Change: And.
Speaker Change: Interpreting this as.
Speaker Change: The business itself the topline business is getting stronger.
Speaker Change: First of all.
Speaker Change: Ladies you see.
Speaker Change: See that you can interpret.
Jason: Interpret that as I do.
Jason: And secondly, I know.
Jason: Joe He talked I asked him last year at the beginning of fiscal year <unk> outlook.
Jason: The outlook was for given our decades of experience was for the coming year and basically he said modest growth and I don't know.
Stephen Ralston: And basically, he said modest growth, and I don't know if he gave the exact numbers, but I interpreted like two to 3% top line growth.
Jason: The exact numbers, but I interpreted like 2% to 3% top line growth.
Stephen Ralston: Um, with all his decades of experience, what's his current outlook for the top line, you know, xing out the depreciation and the other things that are going on.
Jason: With you all his decades of experience.
Jason: What's your current outlook for the.
Jason: Top line.
Jason: Getting out the depreciation and the other things that are going on.
Joe Shoen: Yeah, this is Joe, Steve. I think it's picking up or seeing signs that customers are you know, positive. And of course, you know, there's all these forces that You can read the paper and go crazy. But at the base store level, I think we're seeing a little bit of consumer optimism and willingness to an adventure, to put it politely. So if they're kind of optimistic, they're doing a little more business. And I see them doing a little more business with this. They're accepting a little bit of rate increase. And when we execute with what I call precision.
Jason: Yes. This is Joe Steve I think it's picking up we're seeing signs.
Jason: The customers are.
Jason: Positive and of course, there's all these forces.
Jason: You can read the paper and go Crazy.
Jason: But at the base store level, I think we're seeing a little bit of consumer optimism.
Jason: And willingness to.
Jason: Sort of some sort of a moving adventure every time someone moves.
Jason: And adventure that sort of play with so.
Jason: If they are kind of optimistic theyre doing a little more business. So I see them doing a little more business with us.
Jason: They're accepting a little bit of a rate increase.
Jason: And when we execute with political with precision.
Joe Shoen: They're good with all this. It's not that people don't. don't have the ability to spend money or something like that. They just want to see Good value for the money or maybe even great value for the money, which we should be in the position of providing work. We're kind of at the great value. into the spectrum. And so I'm pushing that real hard with my troops. I think we're seeing a positive response.
Jason: There are good with all of this is not that people don't.
Jason: Don't have the ability to spend money or something like that they just wanted to see.
Jason: Good value for the money or maybe even great value for their money, which we should be in the position of providing.
Jason: We're kind of at the great value.
Jason: Into the spectrum and so on pushing that real hard with my troops I think were seeing a positive response from our customers.
Stephen Ralston: Now moving over to depreciation, and you spent a lot of time on that in this call and also in the press release. um I consider depreciation just partly the nature of the business that you're in. I mean, um... You're in a constant investment stage of capital for replacing your vehicles and increasing capacity. And depreciation is just a byproduct of that. And you use it well to use that to, you know, offset.
Jason: Thank you.
Jason: Now moving over to depreciation and you spent a lot of time on that.
Jason: In this call and also in the press release.
Jason: I considered depreciation just.
Jason: Partly the nature of the business that you're in.
Jason: I mean.
Jason: Yes.
Jason: A constant.
Jason: Investment stage of capital for replacing your vehicles and increasing capacity.
Jason: Depreciation is just the byproduct of that and use it well.
Jason: Two.
Jason: Use that.
Jason: Okay.
Jason: All set.
Stephen Ralston: as an experiment. a non-cash Um, and at some point... There'll be, you'll be able to benefit from that when there's an increased demand. And that's just the nature of your business in the self storage industry and also self moving, obviously. It's even but you're rather downbeat on it. I mean, this is just part of your business.
Jason: As an expense.
Jason: A noncash expense.
Jason: And at some point.
Jason: There'll be a you'll be able to benefit from that when Theres, Inc.
Jason: Increased demand.
Jason: And Thats just the nature of your business.
Jason: Self storage industry.
Jason: Awesome self moving.
Jason: Obviously.
Jason:
Jason: But you'd rather down bead on it I mean this is just part of your business and could you just comment on that I mean, maybe some investors don't understand that.
Joe Shoen: And could you just comment on that? I mean, maybe some investors don't understand that. I'm with you.
Jason: I'm with you.
Joe Shoen: Depreciation on self storage is money in the bank. That, if you wanted to, you know, scratch me deep, that would be my response there. It's money in the bank.
Jason: Depreciation on self storage is money in the bank.
Jason: If you wanted to scratch me deep Thats would be my response, there is money in the bank.
Joe Shoen: Relax. Equipment is different. Equipment really is a depreciating asset and through this time we had a number of things that happened. Cost of Acquiring Equipment Exceeded our upper limit of projections. Okay, it was something that was We've not seen. 30 years. And then that was coupled with shortage of equipment, which is what runs repair expense up and also causes us in the present year to be acquiring more trucks than we would on a on a normal adjusted basis. But I think you're absolutely right. Equipment Depreciation, if we can. have a reasonable handle on how we bring the equipment in and how we take it out, should match up to revenues in a positive way over a three or five year cycle for sure.
Jason: <unk>.
Jason: Equipment is different it really is a depreciating asset.
Jason: Through this time, we had a number of things that happened.
Jason: Cost of acquiring equipment.
Jason: Ceded.
Jason: Our upper limit of projections, okay. It was.
Jason: Something that was.
Jason: We've not seen it.
Jason: In 30 years.
Jason: And then that was coupled with.
Jason: A shortage of equipment, which is what.
Jason: Runs repair expense up and also causes us.
Jason: In the present year to be acquiring more trucks than we would on a on.
Jason: On a normal adjusted basis.
Jason: But I think youre absolutely.
Jason: Equipment depreciation if we can.
Jason: Have a reasonable handle on how we bring the equipment in and how we take it out should match up to revenues in a positive way over a three or five year cycle for sure.
Joe Shoen: And I expect it kind of is, but there's this anomaly, the automakers, and they're starting to fess up to this now, if you're reading. Press. They've been grossly subsidizing electric vehicle misadventures by Jacking the people who buy internal combustion engines, whether it's consumers or. And that's that's created a net loss for everybody. The automakers lost money because they couldn't sell the damn electric vehicles and make any money. And then we've paid arguably too much for fleet, but that now is starting to come back towards normalization. We're not quite there on a, you know, if you look at it over a 10 year trend, but we're, we're improving.
Jason: And I expect it kind of is but there's this anomaly the automakers and theyre starting to fess up to this now if you read.
Jason: Chris.
Jason: <unk> been grossly subsidizing electric vehicle misadventures.
Jason: Hi.
Jason: Jacking, the people, who buy internal combustion engines, whether it's consumers or fleets.
Jason: And.
Jason: That's.
Jason: That's created a net loss for everybody the automakers lost money because they couldnt sell with them.
Jason: Electric vehicles and make anybody and then we've paid arguably too much for fleet, but that now starting to come back towards normalization, we're not quite there on it.
Jason: If you look at it over a 10 year trend, but we're improving and the feedback I get from the automakers is.
Joe Shoen: And the feedback I get from the automakers is they're pretty much done with the charade of net zero. and it's going to allow them to right their boat. Most of these people are actually manufacturing behemoths. They're excellent at it if you let them go. But they have. You know, whatever you want to say, drunk the Kool-Aid and not done which is their forte. And I think they're focused on getting back to their forte and that will benefit us. Although there'll be some little lumps and bumps getting there, but I think it's going to benefit us.
Jason: They are pretty much done with the charade of net zero.
Jason: And.
Jason: It's going to allow them to write their boat.
Jason: Most of these people are actually manufacturing.
Jason: Behemoths there excellent added if you let them go.
Jason: But they have.
Jason: Whatever you want to say drunk, the Kool aid and not done which is their forte.
Jason: And I think they are focused on getting back to their <unk> and that will benefit us.
Jason: Although there'll be some little lumps and bumps getting there I think it's going to benefit us.
Joe Shoen: I saw an article this morning where Mary Barra commented positively on tariffs. And of course, the article speculated whether she was trying to curry favor with the Trump administration, or she actually believes this. Well, she may be correct. Okay. It's a very, these are complicated equations, how this cost works through the economy, but costs that are just wasted. In other words, money spent then to develop a vehicle that you can sell for $50,000 but costs you $100,000. That's just pure waste in the economy and we've been the victim of that. And I think that's coming to a halt.
Speaker Change: I saw you.
Jason: Article this morning.
Jason: Mary Barra commented positively on.
Jason: On tariffs and of course, the article speculated whether she was trying to curry favor with the Trump administration are actually believes this.
Jason: So she may be correct okay.
Jason: It's a very these are complicated equations, how this cost work through the economy, but costs that are just wasted in other words money spent.
Jason: To develop a vehicle that you can sell for 50, but cost you 100.
Jason: Such as pure waste in the economy.
Jason: We've been the victim of that.
Jason: And I think thats coming to a halt and as that comes to a halt.
Joe Shoen: And as that comes to a halt, this The statement that depreciation is a normal thing will be absolutely true. It should be a normal thing. I don't know if she's agreeing, but disappointed that we didn't properly see the... extent to which this could go. In other words, our projection, the range of our projections did not encompass What actually happened on either client and retail that resale value or the amount that the automakers would attempt to make stick on acquisition prices, but those are now coming back where they're more comprehensible. And normally they work well for the whole economy.
Jason: <unk>.
Jason: The statement that depreciation is a normal thing.
Jason: We'll be absolutely true it should be a normal thing in Ireland.
Jason: Alright.
Jason: The green, but disappointed that we didn't properly C C.
Jason: The extent to which this could go in other words, our projections the range of our projections did not encompass.
Jason: What actually happened on either.
Jason: Klein in retail that resale value or the.
Jason: Amount that the automakers would attempt to make stick on acquisition prices.
Jason: Now coming back.
Jason: Where theyre more comprehensible and normally they worked well for the whole economy. So I expect this is going to straighten itself out.
Joe Shoen: So I expect this is going to spread itself out. Give it a little bit of time, and I'm with you 100%. Again, on storage, depreciation is just a piggy bank. It's not a cost. on trucks. It's real, but it should match to Revit.
Jason: Give us a little bit of time and I'm with you, 100% again on storage depreciation is just a piggy bank, it's not a cost.
Jason: On trucks, it's real but it should match to revenue.
Stephen Ralston: Thank you very much for taking my questions.
Speaker Change: Thank you very much for taking my questions.
Jason: Sure.
Jason: Yeah.
Steven Ramsey: Your next question is from the line of Steven Ramsey from Thompson Research Group. Please ask your question.
Speaker Change: Your next question is from the line of Steven Ramsey from Thompson Research Group. Please ask your question.
Steven Ramsey: Hi, good morning. Maybe to start with the U-Box growth, it jumped up meaningfully in the quarter and growing three times faster than moving. What do you attribute that step up to?
Steven Ramsey: Hi, Good morning, maybe just start with the U box growth jumped up meaningfully in the quarter and growing three times faster than moving.
Speaker Change: You tribute that step up to I saw the comment that moving and storage containers both.
Steven Ramsey: I saw the comment that moving and storage containers both increasing, were they increasing at similar levels on a year-over-year basis?
Speaker Change: Increasing where they increasing at similar.
Speaker Change: Levels on a year over year basis.
Joe Shoen: Well, Jason, I'll start with that. The moving transactions, the U-Box moving transactions are growing at a faster rate than the U-Box containers that we're keeping in storage. Now, both are in the 20 plus 20% range. It's just that the moving transactions are at the higher end of that, the storage transactions are at the lower end of that. So with as many containers that we have acquired and warehouse space that we've built out, our big opportunity is to keep more of those containers in storage.
Jason: Well this is Jason I'll start with that.
Speaker Change: The moving transactions.
Speaker Change: U box moving transactions are growing at a faster rate than the <unk>.
Speaker Change: <unk> containers that we're keeping in storage now both are in.
Speaker Change: In the 20, plus 20% range. It's just that the moving transactions are at the higher end of that this charge transactions are at the lower end of that so.
Speaker Change: With as many containers that we've acquired in warehouse space that we've built out our big opportunity is to is to keep more of those containers that storage.
Steven Ramsey: Okay, and then the 17% growth, I mean, obviously you can't pinpoint it too specifically, but is that the right sort of range to think about going forward, or is it still something strong, but maybe more moderate than that?
Speaker Change: Okay, and then the 17% growth I mean.
Speaker Change: Actually you cant pinpoint it too specifically, but is that the right sort of range to think about going forward or is it still something strong but may be more moderate than that.
Joe Shoen: This is Joe. I think My expectation is to stay in that range. The market's vast. We've done this largely without cannibalizing our existing customer base. So we've been able to. get growth in both of those segments. I see the U-Box has a higher growth rate than the truck share operation. for many years to come. I just think that's the nature of it. Of course, it's smaller, but the market's less explored also. And it's not a simple cannibalization of our other customer. Yeah, I think you can project to be a higher I certainly am.
Speaker Change: This is Joe I think.
Speaker Change: My expectation is to stay in that range the market is vast.
Speaker Change: We've done this largely without cannibalizing our existing customer base.
Speaker Change: So we've been able to.
Speaker Change: Growth in both of those segments.
Speaker Change: I see that.
Speaker Change: The.
Speaker Change: New box.
Speaker Change: Has a higher growth rate.
Speaker Change: The truck share operation.
Speaker Change: Many years to come I, just think thats the nature of it of course, it's smaller.
Speaker Change: But it's it's all of the markets less explored also.
Speaker Change: And it's not a simple cannibalization of our other customer so.
Speaker Change: I think you can project to be at higher end.
Speaker Change: I certainly am.
Steven Ramsey: Thank you. That's great to hear.
Speaker Change: Banking on that.
Speaker Change: That's great to hear I wanted to shift to real estate investments next next year.
Steven Ramsey: Wanted to shift to real estate investments next year. Your storage pipeline is down a million or so from the prior quarter, and the U-Box warehouse space grew meaningfully last year. Do you expect real estate CapEx to be at similar levels in FY26? Or do you expect it to moderate a bit? Just maybe your logic behind where you see it going.
Speaker Change: Storage pipeline down a million herself from the prior quarter and the U box warehouse space grew meaningfully.
Speaker Change: Last year do you expect real estate Capex.
Speaker Change: Be at similar levels in FY 'twenty, six or do you expect that to moderate a bit just maybe your logic behind where you see it going.
Joe Shoen: I'll touch it and I'll let Jason, he's the voice of reason here, which I think is the position you'd like him to play. I'm the voice of. You know, let's get there before somebody else does. So with U-Box, we've done a lot of just trying to get positioned in markets where we weren't positioned.
Speaker Change: Well I'll touch it and I'll, let Jason he's he's the voice of reason here, which I think is the position you'd like in the play.
Speaker Change: The voiceover.
Speaker Change: Let's get there before somebody else does so.
Speaker Change: With U box, we we've done a lot of just plain to get <unk>.
Speaker Change: Physicians in markets, where we werent positioned.
Joe Shoen: And. with the exception of a few major markets, and I'll pick. Los Angeles is an example. We're woefully under-U-Boxed in Los Angeles, but that may end up being the situation for the next 20 years. So, but we have added U-Box capacity throughout North America and we're I don't think we're in the emergency construction basis, which I would if you would have asked me a year or two years ago, I'd say it's an emergency, we need more, more, more. Now we need to calmly exploit the asset that we've built, because of course, that's where that's the whole point of this.
Speaker Change: Yes.
Speaker Change: With the exception of a few major markets and I'll pick.
Speaker Change: Los Angeles is an example, where woefully under U box in Los Angeles, but that May end up being the situation for the next 20 years.
Speaker Change: Okay.
Speaker Change: So, but we have added a new box capacity throughout.
Speaker Change: North America and.
Speaker Change: <unk>.
Speaker Change: I don't think were in the emergency construction basis, which I would if you'd have asked me a year or two years ago as an emergency if you need more and more more.
Speaker Change: Now we need to calmly.
Speaker Change: <unk> asset that we've built because of course that's.
Speaker Change: Sure.
Speaker Change: That's the whole point of this so.
Joe Shoen: So as Jason said, as we get more people into storage and continue to grow the Moving Franchise of the U-Box product will be leveraging those assets and that should be positive leverage.
Speaker Change: As Jason said as we get more people into storage and continue to grow that.
Speaker Change: Moving franchise.
Speaker Change: Box product.
Speaker Change: We will be leveraging those assets and that should be positive leverage.
Steven Ramsey: Okay, that's great.
Speaker Change: Okay.
Steven Ramsey: And then last one for me, again, to stay on the real estate side of things, you brought a lot of storage capacity online recently, that is self-storage. The maturity period, is it still moving at the historical clip on a going from day one to year one, two, and three? And then secondly, you have a larger percentage of units in that early phase of ramp up right now, it seems. Can you talk about the impact that has on EBITDA in the timeline of transitioning from money losing to EBITDA positive as storage units mature?
Speaker Change: That's great and then last one for me again to stay on the real estate side of things.
Speaker Change: We brought a lot of storage capacity online recently that is self storage.
Speaker Change: Charity period is it still moving at the historical clip on a going from day, one to year, one two and three.
Speaker Change: And then secondly, you have a larger percentage of units.
Speaker Change: In that early phase of ramp up right now it seems can you talk about the impact that has.
Speaker Change: On EBITDA.
Speaker Change: The timeline.
Speaker Change: Listening from.
Speaker Change: Money, losing to EBITDA positive as storage units mature.
Jason Berg: Stephen, this is Jason. So our rough estimates is usually, you know, approaching 70% occupancy, you're paying your bills. We're not having any issues on the lease up of the portfolio through, say, the first three or four years.
Jason: Stephen This is Jason.
Jason: Our our.
Jason: Our rough estimate is usually.
Jason: Approaching 70% occupancy.
Jason: You are paying your bills, we're not having any issues on the lease up of the portfolio.
Jason: To say the first three or four years I would say that if there is any slowdown that we've seen in the year going from year four to five when you had gone from the low eighty's to getting into the low ninety's.
Jason Berg: I would say that if there's any float on that we've seen, it's in the year going from year four to five, where you're going from the low 80s to getting into the low 90s, I would say that that's maybe a couple points, percentage points slower than what we'd seen before. And I'm excluding the COVID years, which were unusual.
Jason: I'd say that Thats, maybe a couple of points percentage points slower than what we've seen before and I am excluding the COVID-19 years.
Speaker Change: Winter unusable.
Jason Berg: So and that would point to more of a management challenge versus a consumer challenge, you know, trying to get the facility filled up to the 90% plus. Otherwise, in the first three, four years, as we're monitoring these new facilities that come on, I'm not seeing any real weakness in how they're leasing up.
Speaker Change: And that would point to more of a management challenge versus a consumer challenge.
Speaker Change: Trying to get the facility filled up to the 90% plus.
Speaker Change: Otherwise in the first three or four years.
Speaker Change: We are monitoring these new facilities that come on I'm not seeing.
Speaker Change: Any any real weakness and how they are leasing up.
Speaker Change: Yeah.
Steven Ramsey: Okay, that's that's great.
Speaker Change: Okay.
Unknown Executive: Thank you for taking my question.
Speaker Change: Great. Thank you for taking my questions.
Speaker Change: Okay.
Anne Neelyu: Your next question is from the line of Anne Neelyu from Wolf Research. Please ask your question.
Speaker Change: Your next question is from the line of Ana <unk> from Wolfe Research. Please ask your question.
Anne Neelyu: Hey, morning, everyone. And, you know, appreciate you taking a question, you know, really excited to be on the call for the first time. So really, to kick it off, you guys talked about a lot of the positives early on the call, right on the top line. And in the deck, you mentioned higher volume, higher transaction, higher revenue per transaction, which is all great news.
Ana: Hey, good morning, everyone.
Speaker Change: Asia, you take any question or at least I get a call for the first time.
Speaker Change: So really kick it off.
Speaker Change: <unk> talked about a lot of deposit it's early on the call right on the top line and in the deck you mentioned higher vol higher transaction higher revenue per transaction is all great news.
Anne Neelyu: So the big topic today is the tariffs, right? And that kind of happened early April. So as you look at the business on a month to month basis on your customers traffic, have you guys noticed anything, any meaningful shifts there, perhaps, you know, folks that are thinking about moving and are saying like, Hey, maybe I'll just stay put, you know, given uncertainty or anything like that?
Speaker Change: Big topic today like Paris, right at that kind of happened early April so as you look at the business on a month to month basis.
Speaker Change: Customers traffic have you guys noticed anything any meaningful shifts there, perhaps you know folks that are thinking about moving in are saying like hey, maybe I'll just stay tight given uncertainty or anything like that.
Joe Shoen: I'll answer this. You're going to get an opinion because there's not. Someone has a fax. I'd appreciate hearing it, but my opinion, my observation. is that if we Communicate strong values. that the consumer. U-Haul They're a little picky. and where I have stores that are. Poorly Managed. My business is down.
Speaker Change: I'll answer this you are going to give their opinion because there is not.
Speaker Change: With someone that has effect.
Speaker Change: On that I'd appreciate hearing.
Speaker Change: My opinion my observation.
Speaker Change: Is that.
Speaker Change: If we.
Speaker Change: Communicate strong value.
Speaker Change: The consumer.
Speaker Change: It's still positive.
Speaker Change: A little picky.
Speaker Change: And where I have stores that are.
Speaker Change: Poorly managed.
Speaker Change: My business is down.
Joe Shoen: That'd be my answer to you. I will never get every store. Managed with precision, but you know, I get the most of them there.
Speaker Change: My answer to you.
Speaker Change: I will never get every store.
Speaker Change: Managed with precision, but yes.
Speaker Change: Get the most of them there that's my task.
Joe Shoen: That's that's my task So no, I've not seen this, and I've been very curious about this, like you state, are tariffs going to make consumers uncertain, and then they do nothing? If you ask my opinion, when people are uncertain, they don't move. Okay, but we're seeing people move. So my answer would be, I don't think there's uncertain as we might Okay, got it. No, no, that's totally fair.
Speaker Change: So no I have not seen this and I've been very curious about this like Houston.
Speaker Change: Tariffs going to make consumers uncertain and then they do nothing.
Speaker Change: I asked my opinion when people are uncertain they don't move.
Speaker Change: Okay, but we're seeing people move so my answer would be I don't think there is uncertain as we might think.
Speaker Change: Okay got it got it.
Joe Shoen: I know, you know, you know, you all been around for a very long time, you're super experienced here. So, you know, just wanted to kind of get your sense on, you know, you've seen things through the cycle before. So as you kind of look at, you know, where you are in sort of the cycle now, sort of what is your, what's kind of your outlook here and how things might play out. on the on the housing and the moving side. Yeah, I think, again, moving is a need for the consumer. But that continues. The question is, it used to be for...
Brendan: Please go ahead, thanks Brendan.
Speaker Change: You have been around for a very long time, Mr. Baked in here. So I just wanted to kind of get your sense.
Speaker Change: You're seeing things through the cycle before so as you kind of look at.
Speaker Change: When you are in the cycle now so that when a stroke, which kind of.
Speaker Change: Your outlook here on how things might play out.
Speaker Change: On the <unk> side.
Speaker Change: Yes.
Speaker Change: Again, moving as the need for the consumers.
Speaker Change: Yes, that's accurate.
Speaker Change: <unk> question is.
Speaker Change: It used to be for.
Joe Shoen: Much of my career was, can we get them to do business with anybody? Are they going to move in the trunk of their car or the roof of their car or some damn thing? You see, they've always been moving. And of course, you watch them, the best are moving. They're moving in wagons, for God's sake. So the question is, is what's the mode and can you, they're going to move. The question is, can you get them into a commercial transaction that works good for both sides? Can they see it as a value and can we squeeze a profit out?
Speaker Change: Much of my career it was.
Speaker Change: Can we get them to do business with anybody or are they going to move in the trunk of their car or the roof of their car or some damn thing youll see they have always been moving and of course should watch investor moving they're moving and wagons for God's sakes. So.
Speaker Change: The question is what's the mode.
Speaker Change: And can you theyre going to move.
Speaker Change: The question is can you get them into a commercial transaction that works good for both sides.
Speaker Change: I see it as a value and can we use a profit out.
Joe Shoen: And that's, that's We work at that, not so much as can we stimulate moving demand, can we get people to move more often.
Speaker Change: And.
Speaker Change: That's.
Speaker Change: We work at that not so much as can we stimulate moving demand can get people do move more often though we have no no plans no intent don't care.
Joe Shoen: No, we have no plans, no intent, don't care, don't accumulate any data. So we get more of them to enter into a commercial transaction, and of course, specifically with U-Haul. And so that's kind of our task. But if people shut down and they have, I've seen it where they've shut down. And it immediately reflects in the distance of move in our statistics. They move a shorter distance, on average. That's a gross statistic, but it's a pretty good indicator when the distance they move declines.
Speaker Change: Don't accumulate any data on the subject.
Speaker Change: We get more of them to enter into a commercial transaction and of course, specifically with new home.
Speaker Change: And so.
Speaker Change: So that's kind of our task.
Speaker Change: But if people shut down and I've seen it where they are shut down.
Speaker Change: And it immediately reflects distance of move in our statistics, they move a shorter distance on average thats a growth statistic, but it's a pretty good indicator one.
Speaker Change: The distance they move declines.
Anne Neelyu: Overall, there's a little bit of anxiousness in the consumer group. Okay, got it, got it. That's super helpful, super helpful.
Speaker Change: Overall, there is a little bit of Anxiousness in the consumer group.
Speaker Change: Okay got it got it that's super helpful and Super household so moving on to Canada.
Anne Neelyu: So moving on to kind of the storage side, you know, I really appreciate you guys putting out that slide here on sort of the revenue upside on the development pipeline. I think I remember a couple quarters back, I kind of talked about, you know, these developments, you could bring in sort of like, you know, 10% yield, 10% returns on these storage developments. On the real estate side, we kind of hear, you know, maybe tariffs or making input costs go up or, you know, could potentially, you know, affect the labor side of the equation. So would that potentially impact some of the yields you guys kind of initially expected for the future pipeline, that 10%?
Speaker Change: Storage side I really appreciate you guys putting out.
Speaker Change: Slide here on sort of a revenue upside on the development pipeline I think I.
Speaker Change: A couple of quarters bag I kind of talked about new developments you can bring in like 10% yield 10% returns on these storage developments on the real estate that we kind of here maybe.
Speaker Change: Maybe tariffs, making input costs go up immigration policy could potentially.
Speaker Change: On the.
Speaker Change: The labor side equation, so would you would that potentially impact some of the yields you guys.
Speaker Change: And kind of initially expect to explore the future pipeline that 10%.
Jason Berg: Andy, this is Jason. I've spoken with our real estate folks on the development side and you know, two areas of concern for us would be, you know, what goes into the concrete mixes and the steel. And in talking with our largest steel suppliers, We don't anticipate any significant increases in the cost of steel, at least due to tariffs. Right now, and likewise, we haven't seen anything manifest itself yet and in the cost of concrete. So what we've actually been seeing, excluding the threat of tariffs is the cost of construction have been gradually coming down for us.
Speaker Change: Andy.
Speaker Change: This is Jason I have spoken with with our real estate folks on the development side.
Speaker Change: Two areas of concern for us would be.
Speaker Change: What goes into the concrete mixes in the steel.
Speaker Change: And in talking with our largest steel suppliers.
Speaker Change: We don't anticipate any significant increases in the cost of steel at least to the tariffs.
Speaker Change: Right now and likewise, we haven't seen anything manifest itself yet in the cost of concrete so.
Speaker Change: Uh huh.
Speaker Change: What we've actually been seen.
Speaker Change: Excluding the threat of tariffs is.
Speaker Change: The cost of construction have been.
Speaker Change: Gradually coming down for us.
Jason Berg: That's a combination of us being a little bit smarter, and also I think that people are just a little bit hungrier, and we can get people to sharpen their pencil, so that's it. It doesn't mean the actual cost of the client, but what we're paying.
Speaker Change: That's a combination of both of us being a little bit smarter and also I think that people are just a little bit hungrier than we can get people to sharpen their pencils.
Speaker Change: That's it.
Speaker Change: It doesn't mean that actual costs have declined but what we're paying.
Speaker Change: Okay.
Anne Neelyu: Okay, guys, that's helpful. It's really great that you guys are able to control that cost there.
Speaker Change: Okay got it.
Speaker Change: That's helpful.
Speaker Change: Helpful. That's helpful.
Speaker Change: Really great day, guys, if they can show that cost there.
Anne Neelyu: So really, following on the storage side, you know, a lot of times you kind of look at your companies that has, you know, an operating side and real estate side, sometimes they could be disconnecting the valuation of the real estate, right? So looking at your storage space, and you guys own a pretty sizable footprint, and then kind of look at, you know, the other market sort of the value of a self storage facility, right? Kind of like 200 bucks a foot, it's kind of what the market norm is. So kind of looking at where you guys are trading, do you guys think there's a disconnect maybe in the, in how folks are looking at the value on the storage portfolio?
Speaker Change: So really you can follow on on the <unk>.
Speaker Change: Storage side, a lot of times you cannot look at your companies.
Speaker Change: On operating side I realize cold side, some hospital could be disconnect in the valuation of the real estate. So looking at storage space and you guys are in a pretty sizeable.
Speaker Change: But on a kind of look at the.
Speaker Change: The other story is known for recovery here.
Speaker Change: Alright, and the private market.
Speaker Change: The value of a screen of the self storage facility.
Speaker Change: But carlo.
Speaker Change: The market also tunnel.
Speaker Change: Those are trading do you guys think there is.
Speaker Change: Connect maybe and how folks are looking at the <unk>.
Speaker Change: And on the storage portfolio.
Speaker Change: Yeah.
Jason Berg: This is Jason. I guess the answer to that is we've been trying to provide more details to help people value that, so that's an indication of we think that there's a disconnect. We think that there's more, as people understand us more, that We think the company's worth more than where it's trading at. We've been working with Wolf and our other analysts in order to try to communicate that story. So as far as valuing the stock, everyone who's listening to this call is probably better at that. What we're trying to do is present more information that our investors are asking for so that everyone can better value the stock for themselves.
Speaker Change: This is Jason I guess to answer that.
Speaker Change: As we have been trying to provide more details to help people value of that so that's an indication of we think that theres. A disconnect. We think that there's more.
Speaker Change: As people understand us more.
Speaker Change: At.
Speaker Change: We think the company is worth more.
Speaker Change: And then where it's trading at.
Speaker Change: We've been working with Wolfe.
Speaker Change: Our other analysts in order to try to communicate that story.
Speaker Change: No.
Speaker Change: As far as valuing the stock of everyone, who is listening to this call as probably.
Speaker Change: Better at that.
Speaker Change: What we're doing what we're trying to do is present more information that our investors are asking for in order to so that everyone can better value of the stock for themselves.
Anne Neelyu: Yeah, for sure. For sure.
Speaker Change: Yes for sure for sure.
Anne Neelyu: And, you know, really appreciate you taking my question today.
Speaker Change: We appreciate you taking my question today.
Anne Neelyu: You know, I'm happy to be launching on the name and, you know, looking forward to working with you guys more. Appreciate it.
Speaker Change: Happy to be.
Shannon: Hi, Shannon alone sportswear in Geismar I appreciate it thank you.
Unknown Executive: Thank you. You're welcome.
Shannon: Youre welcome.
Jamie Wilen: Your next question is from the line of Jamie Wilen from Wilen Management. Please go ahead. Yes, as a follow up to the previous question, it would seem like when one looks at the self storage industry, whether they're public or private, and looks at the growth of your self storage, as well as floating in U-Box there, which most of the other self storage people do not have a similar component, that the value of self storage in U-Box exceeds the current stock price. So it seems like the truck rental business is being valued for less than zero.
Speaker Change: Your next question is from the line of Jamie Wilen from wealth management. Please go ahead.
Jamie Wilen: Yes, that's a follow up to the previous question it would seem like when one looks at the self storage industry, whether they're public or private and.
Jamie Wilen: Look at the growth of your self storage as well as <unk>.
Speaker Change: Floating and new box, there, which most of the other self storage people do not have a similar component.
Speaker Change: The value of self storage in new box exceeds the current stock price. So it seems like the truck rental business is being valued for less than zero.
Jamie Wilen: So, you know, one would hope, other than just, uh...
Speaker Change: So one would hope other than just.
Joe Shoen: putting out information to additional Wall Street analysts that the company can garner a plant or how to reduce that valuation gap since our self-storage is so undervalued relative to its peers. in the market. Yeah, I think that's a great comment, Jamie. And of course, as you know, I'm invested in this, so. Optimizing that is in my selfish self-interest, right?
Shannon: Putting out information to additional wall Street analysts that the company can garner a plan for how to.
Speaker Change: Reduced that valuation gap since our self storage is so undervalued relative to its peers.
Speaker Change: In the markets.
Speaker Change: No I think thats.
Speaker Change: Great comment Jamie in <unk>.
Speaker Change: Of course as you know.
Speaker Change: One invest business and so.
Speaker Change: Optimizing that.
Speaker Change: Selfish self interest.
Speaker Change: Okay.
Joe Shoen: Welcome input on the subject and then trying to get Would you all consider repurchasing shares at this tremendous discount to intrinsic value to close that valuation gap? You know, I'm torn on that. You know, we did some repurchases, I don't know what, 10 or 12, 15 years ago. Some members of my family liked it because it felt like they were getting more. Wealthy or something but it didn't give me any more money to spend so I don't know if it really did a lot, but at the same time, Jason's keeping a pretty Putting his position and trying to make sure we keep ourselves very liquid and very flexible because of there is significant uncertainty.
Speaker Change: Welcome input on this subject and in trying to get there.
Speaker Change: But would you all consider repurchasing shares at this tremendous discount to intrinsic value to closed subject valuation gap.
Speaker Change: Im torn on that we did some repurchases I don't know what 10 or 12 15 years ago.
Speaker Change: Right.
Speaker Change: Some members of my family liked it because it felt like they were getting.
Speaker Change: More and more.
Speaker Change: Healthy yourself, but it didn't give any more money to spend so I don't know if that really.
Speaker Change: Get a lot, but but at the same time jason's keeping a pretty.
Speaker Change: He is putting his position and trying to make sure we can.
Speaker Change: Keep ourselves.
Speaker Change: Very liquid and very flexible because of.
Speaker Change: There is significant uncertainty.
Joe Shoen: and Financial Mark. I'd say relative to five years ago, maybe, and so he's trying to keep me to keep him going. Fair amount of liquidity.
Speaker Change: And financial markets.
Speaker Change: I would say relative to five years ago maybe.
Speaker Change: So he is trying to keep me too.
Speaker Change: Keeping group.
Speaker Change: Fair amount of liquidity.
Jamie Wilen: So it's not been proposed, there's no proposal in front of the board or... Any particular board member that I recall who's agitating for a share back, and I'm not agitating. If someone made the case, it certainly would talk about it, but I just... No, I don't. I don't know, it may be smart. You know, when we did it before, I was not very much in favor of it. I try not to just run the I would submit that the valuation gap today is much, much greater than the valuation gap when you were repurchasing shares a dozen years ago.
Speaker Change: So it has not been proposed there is no proposal in front of the board or.
Speaker Change: Any particular board member that I recall this agitating for.
Speaker Change: Sure backend Im not agitating for one division.
Speaker Change: So we made the case that certainly we've talked about it.
Speaker Change: Yeah.
Speaker Change: No I don't.
Speaker Change: I don't know it may be smart when we did it before I was not very much in favor of it but.
Speaker Change: I try not to just run this season.
Speaker Change: But talk proceed.
Speaker Change: Submit the valuation gap today is much much greater than the valuation gap. When you were purchasing repurchasing shares a dozen years ago.
Jamie Wilen: It's a different equation today.
Speaker Change: It's a different equation today.
Speaker Change: Well I appreciate you making that point.
Speaker Change: Yeah.
Jamie Wilen: Financially, the property and casualty business operating profits declined in the quarter from $25 to $10 million. Is there any particular reason that would happen?
Speaker Change: Financially the property and casualty business.
Speaker Change: Operating profit declined in the quarter from $25 million to $10 million is there any particular reason.
Speaker Change: That would happen.
Jason Berg: Jamie, this is Jason, and this is due to one of my least favorite accounting rules on the face of the earth, and that is valuing common stock that we hold in our investment portfolios to market and running that change through earnings. So, we have a portfolio of common stock at the property and casualty company. Last year, during the fourth quarter, it went up in value compared to the beginning of the quarter, and we had a large gain. This year, it happened to go down in value and then combined, I think that was something like a $10 million swing, just from holding the common stock, not from anything actually happening.
Speaker Change: This is Jason and this is due to one of my least favorite accounting rules on the face of the Earth and that is valuing.
Speaker Change: Common stock that we hold in our investment portfolio to market and running that change through earnings.
Speaker Change: So we have a portfolio of common stock at the property and casualty company last year towards during the fourth quarter. It went up in value compared to the beginning of the quarter and we had a large gain.
Speaker Change: This year it happened to go down in value and then combined I think that was something like a $10 million swing just from holding the common stock netting out from anything actually happening.
Jamie Wilen: understood.
Speaker Change: Understood.
Jamie Wilen: As a shareholder, it intrigues me with the thought of potentially selling off our insurance businesses and using that liquidity to repurchase shares and close the valuation gap and be able to put forth more capital into the businesses that are growing in our core business. Any thoughts in that direction? Yeah, I think that's a valid consideration.
Speaker Change: Shareholder.
Speaker Change: <unk>.
Speaker Change: Intrigues me with a thought of potentially selling off our insurance businesses and using that liquidity to repurchase shares and close the valuation gap and be able to put forth more capital into the businesses that are growing in our core businesses any thoughts in that direction.
Speaker Change: Yes, I think Thats fair.
Speaker Change: Olive consideration.
Speaker Change: Yeah.
Speaker Change: Vince discussed.
Speaker Change: And but I don't want to tell you that something is going to happen.
Joe Shoen: But I don't want to tell you that something's going to happen. The idea is clear.
Speaker Change: But the idea is clear.
Jamie Wilen: Well, I guess I'd leave it. Okay. All right. Thanks, fellas. Appreciate it.
Speaker Change: So I guess I'll leave it at that.
Speaker Change: Okay, Alright, thanks, Charles I appreciate it.
Stephen Farrell: Your last question is from the line of Stephen Farrell from Oppenheimer, please go ahead. Good morning. I have a few questions about the fleet. What is the current age and how does that compare to pre pandemic level? I don't have a calculation, we don't run that statistic, but if you looked at... Unused mileage. In other words, let's take 130,000 trucks. How many miles do we have left of that fleet on a per-truck basis than we did pre-COVID? Pre-COVID was our highest. We would have had the highest number of unused and therefore available miles in the fleet.
Speaker Change: The last question is from the line of Stephen Farrell from Oppenheimer. Please go ahead.
Stephen Farrell: Good morning, I have a few questions about the fleet what is the current age and how does that compare to the pre pandemic level.
Stephen Farrell: I don't have.
Speaker Change: Population, we don't run that statistic, but if you looked at.
Stephen Farrell: Yeah.
Stephen Farrell: Unused mileage does the words, let's take 130000 trucks.
Stephen Farrell: How many miles do we have left in that fleet on a per truck basis than we did pre COVID-19.
Stephen Farrell: Pre COVID-19 was our highest.
Stephen Farrell: We would have had the highest number of.
Stephen Farrell: Unused and therefore available miles in the fleet.
Joe Shoen: We have steadily been increasing that, and this year. will increase it again. And we I was just thrilled. Prior to COVID, because I thought We've got the company into a strong position. and and then COVID came and we had at first our own fear and then to acquire more capital trucks and then the automaker's inability or unwillingness to manufacture the truck. So between the two of those factors We declined rapidly, and you saw that in escalating repair expense. Our repair expense went up to $100 million in a short period of time. As on average, we're Not necessarily older, but had more miles.
Stephen Farrell: We have.
Stephen Farrell: Steadily been increasing that in this year.
Stephen Farrell: We'll increase it again and.
Stephen Farrell: We.
Stephen Farrell: I was just thrilled.
Stephen Farrell: Prior to Covid, because I thought.
Stephen Farrell: We got the company into a strong position there.
Stephen Farrell: And and then Covid came in we had it.
Stephen Farrell: First.
Stephen Farrell: Our own fear and then to acquire more capital trucks and then.
Stephen Farrell: The automakers inability or unwillingness to manufacture the trucks so between the two of those factors.
Stephen Farrell: We declined rapidly and you saw that in escalating recurring that's our period.
Stephen Farrell: The $100 million short period of time.
Stephen Farrell: Because the trucks.
Stephen Farrell: As on average were.
Stephen Farrell: Not necessarily older but had more miles.
Joe Shoen: are unused, less unused miles available. And all these trucks have different amounts of miles that they're good for this too. There's not a one index number, but so I think we're probably. By the end of this Bill, which will go through. The one we're in now, Basic, is going to go through next March. I think we're probably above 90% of what we had pre-COVID, but I don't have an absolute Calculation, we look at that twice a year and try to You know, it's a whole bunch of suppositions to try to comprehend what it is. And so.
Stephen Farrell: Our unused unless unused miles available.
Stephen Farrell: All of these trucks have different amounts of miles that they are good for them too.
Stephen Farrell: There is not a one index number but so I think we're probably.
Stephen Farrell: By the end of this.
Stephen Farrell: Bill, which will go through the <unk>.
Stephen Farrell: One we're in now basically is going to go through.
Stephen Farrell: Next March.
Stephen Farrell: I think were probably above 90%.
Stephen Farrell: Had pre COVID-19, but I don't have an absolute.
Stephen Farrell: Calculation, we look at that twice a year and try to.
Stephen Farrell: Yes.
Stephen Farrell: Whole bunch of suppositions would try to comprehend what it is.
Stephen Farrell: <unk>.
Stephen Farrell: So.
Joe Shoen: I don't have a number in the front of my mind, but we're gaining ground, which is, to me, the point. Gain the ground, and you gain a little ground, you'll get there, and there is no... You can get too much and have the fleet too new, and it just costs too much. So you want to kind of... want to have this lead. If I had my druthers, I'd have an equal percentage of every model in every year of production, but it never comes in that way. Sometimes I have to buy 30% of a particular model's fleet in one year because that's just what's available and what can be done, but it kind of puts a lump in the snake as we digest them.
Stephen Farrell: I don't have a number of the predominant mind, but we're gaining ground, which is to me the point gain the ground to gain a little ground youll get there.
Stephen Farrell: And there is no.
Stephen Farrell: Get too much out of the fleet to new and it just cost too much.
Stephen Farrell: So you want to comment.
Stephen Farrell: We want to have the fleet if I had my druthers I'd have.
Stephen Farrell: An equal percentage of every model in every year of production, but it never comes in that way and so.
Stephen Farrell: Sometimes they have to buy 30% of our particular models fleet in one year, because that's just what's available and what can be done, but the kind of puts a lumpiness snake as we digest that.
Joe Shoen: just see it kind of just like seeing. rat will throw a snake. It's just kind of a little lump that kind of works itself out. We're not as good as pre-COVID, but pre-COVID was the best. We're way ahead of different times I've run this company. I mean, I'm proud of the fleet. I don't expect that if you randomly go into a place, you're going to get a rough truck. I'd expect you're going to get a good truck. There's been times in my career where I'd say, you've got a 50-50 chance you may get a rough truck lesson.
Stephen Farrell: You can just see it coming to Spike casino.
Stephen Farrell: Rattle through a snake, it's just kind of a little lumpy kind of works itself out.
Stephen Farrell: We're not as good as pre COVID-19, but pre COVID-19 who's the best where.
Stephen Farrell: Way ahead of different types of run this company I'm proud of the fleet I don't expect to review randomly go into a place youre going to get.
Stephen Farrell: A rough truck I would expect youre going to get a good truck.
Stephen Farrell: There's been times in my career, where I would say you've got a 50 50 chance you may get a rough truck.
Stephen Farrell: You are not giving the market experienced at today, so that helps build our business because consumers somehow communicate about that they know.
Stephen Farrell: You're not going to, you're not going to experience that today. So that helps build our business because consumers somehow communicate. about that. They know . I can even tell by model what they think are trucks. leaves a little bit. Not up to their expectations. So it's, I think we're not seeing, we're not, we're not, that's not being a problem. is not a problem. But we're paying up for it. That's what you see in this depreciation. We're paying up. Right. And that's I just wanted to follow up with that. You can correct me if I'm wrong.
Stephen Farrell: I can even tell by model when they think our truck.
Stephen Farrell: We use a little bit.
Stephen Farrell: Not up to their expectations.
Stephen Farrell: I think we're not seeing we're not we're not that's not being a problem for us right now.
Stephen Farrell: <unk> does not have problems, but we are paying up for it that's what you're seeing this depreciation.
Stephen Farrell: Great.
Stephen Farrell: Just wanted to follow up with that.
Stephen Farrell: Correct me, if I'm wrong, but when there were no supply constraints with the fleet rotation I always kind of thought of.
Stephen Farrell: But when there were no supply constraints with the fleet rotation, I always kind of thought of a maintenance expenses increasing as the depreciation is decreasing and the two more or over the life of the vehicle. And Is it now we have a, you know, significant increase in depreciation that's outpacing the decrease in maintenance expense? And is that just a new normal because there was, you know, the big lump of bend, you know, this year and last year, and, you know, not much before that? Or do you think I'm sorry, I do not want I would not characterize it as the new normal.
Stephen Farrell: Maintenance expense is increasing as the depreciation is decreasing and the two more or less rounds out over the life of <unk>.
Stephen Farrell: And the vehicle.
Stephen Farrell: And.
Stephen Farrell: Is it now we have cigna.
Stephen Farrell: A significant increase in depreciation that's outpacing the decrease in maintenance expense and is that just a new normal because there was a big lump of.
Stephen Farrell: Then this year than last year.
Stephen Farrell: And not much before that do you think.
Stephen Farrell: So.
Stephen Farrell: I'm, sorry, I do not want would not characterize it as the new normal.
Joe Shoen: Again, I expect that automakers will continue to improve quality, and maybe even pricing going ahead. They have room there if they can get themselves focused on it and get their costs allocated. So they're not. constantly trying to subsidize another vehicle. So, they're very good at this, they're very knowledgeable people, and... In my conversations with them as of late, that is their focus. I couldn't have said that two years ago. So if they get focused on this, I think they'll do a good job, and that will trickle through to us. And then we have to do, of course, a good job of what trucks we buy.
Stephen Farrell: Again, I expect that automakers will continue to improve quality.
Stephen Farrell: And maybe even pricing going ahead, they have room, there if they can get themselves focused on it and get their cost allocated.
Stephen Farrell: So theyre not.
Stephen Farrell: Constantly trying to subsidize another vehicle.
Stephen Farrell: So they're very good at this they're very knowledgeable people in.
Stephen Farrell: In my conversations with them as of late that is their focus I couldnt have said that two years ago.
Stephen Farrell: So they get focused on this I think they will do.
Stephen Farrell: Good job and that will trickle through to US and then we have to do with <unk>.
Stephen Farrell: A good job of trucks, we buy we buy.
Joe Shoen: We buy the right ones in the right amount. And then there's always the issue that Jamie Wilen brought up, or are you really making a profit or not? Because there's... So many things in on what we call a box truck, in other words, a truck that has a square U-Haul box on the back of it. You're not out of the woods for seven or eight years. That's just the truth. And that's always been the truth and it's not a... Steven Ralston, James Wilen, Keegan Carl, Samuel Shoen, James Wilen, Keegan Carl, Samuel Kind of a long projection, and we try to be real sober about that because...
Stephen Farrell: <unk> is the right amount so.
Jamie Wilen: And then there's always the issue that Jamie Wilen.
Jamie Wilen: Or are you really making a profit or not because there's so many things in our what we call a box truck <unk> trucks.
Jamie Wilen: Trucks. It has a square you more box over backward.
Jamie Wilen: Youre not out of the woods for seven or eight years, such as the truth and Thats always been the truth is it's not a scary thought to US we deal with it all the time, but so you make a projection and an eight year projection.
Jamie Wilen: It's kind of a longer project.
Jamie Wilen: And we try to be real sober about that because.
Joe Shoen: because we intend to be here 7 or 8 years from now in our positions and we don't want it to be reflecting poorly on us. You know, we're trying to do that to the very best of our ability. And we will become easier as the automakers focus back on their core comp. because they're more predictable. Things are predictable. When they, all this. Disrupted. Go to a car dealer, talk to the dealer, his tail will be frightened. He has a bunch of unsold inventory and a bunch of orders for vehicles he can't source. Well, that's just that just means the supply chain has been disrupted.
Jamie Wilen: Because we intend to be here seven or eight years from now and our positions and we don't want it to be reflecting poorly officer.
Jamie Wilen: <unk>.
Jamie Wilen: We're trying to do that to the very best of our ability.
Jamie Wilen: It will become easier as the automakers' focus back on their core competencies.
Jamie Wilen: Because they're more predictable things are predictable.
Jamie Wilen: All of this.
Jamie Wilen: Green business is just.
Jamie Wilen: Disrupted.
Speaker Change: Go to a car dealer I've talked to the dealer is Taylor will be.
Jamie Wilen: Right.
Jamie Wilen: He has a bunch of unsold inventory and a bunch of orders for vehicles he can't source.
Jamie Wilen: Thats just that just means the supply chain has been disrupted and we need to.
Joe Shoen: The Rationalized Supply Chain, which I think is... Speedily being addressed and they will get it right because that is what they do well at. Well, that's good.
Jamie Wilen: The rationalization of supply chain, which I think is.
Jamie Wilen: Yes.
Jamie Wilen: Speedily being addressed and they will get it right because that is what they do well at.
Jamie Wilen: Okay.
Jamie Wilen: That's great. Thank you very much.
Unknown Executive: Thank you very much.
Unknown Executive: There are no further questions at this time.
Speaker Change: There are no further questions at this time I would like to turn the call back to the management team for closing comments Sir. Please go ahead.
Joe Shoen: I'd like to turn the call back to the management team for closing comments. Sir, please go ahead.
Unknown Executive: Well, thank you everyone for your support. We look forward to speaking with you in August after we report our first quarter results. Thank you.
Jamie Wilen: Well. Thank you everyone for your support we look forward to speaking with you in August after we report our first quarter results. Thank you.
Unknown Executive: This concludes today's conference call. Thank you very much for your participation.
Jamie Wilen: This concludes today's conference call. Thank you very much for participation you may now disconnect.
Unknown Executive: You may now disconnect.
Jamie Wilen: [noise].