Q4 2025 U-Haul Holding Co Earnings Call
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.
So at any time during this call you require immediate assistance. Please press star zero for the operator.
Speaker Change: This call is being recorded in first day May 29, 2025, or I would now like to tend to conference over to Sebastian Reyes. Please go ahead.
Speaker Change: Good morning, and thank you for joining us today welcome to the U haul holding company fourth quarter fiscal year end 2025 investor call.
Speaker Change: 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 of one 933 as amended and section 21 E of the sick.
Speaker Change: Curious exchange act of $19 34 as amended.
Speaker Change: Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.
Speaker Change: Certain factors could cause actual results to differ materially from those projected.
Speaker Change: 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.
Speaker Change: I'll now turn the call over to Joe showing chairman of U haul holding company.
Speaker Change: Yes.
Speaker Change: Hello, everybody.
Speaker Change: You see especially in our fourth quarter results.
Speaker Change: Our decisions made in prior years working their way through the financial statements.
Speaker Change: On a more positive note.
Speaker Change: The original equipment manufacturers appear.
Speaker Change: <unk> decided to make.
Speaker Change: Reliable fuel efficient ice vehicles in <unk>.
Speaker Change: Volume.
Speaker Change: At improved pricing.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Oems and new whole both need to get some.
Speaker Change: The emissions regulation relief from the administration.
Speaker Change: Be able to better serve our customers.
Speaker Change: With truck product.
Speaker Change: You hole in the meantime has depleted three quarters of our pickup fleet.
Speaker Change: As we see no path to profitability with more than a small specialized pick up.
Speaker Change: Resale prices.
Speaker Change: On both bands and pickups.
Speaker Change: Our steady or improving.
Speaker Change: Yeah.
Speaker Change: I expect we may struggle through October.
Speaker Change: Okay.
Speaker Change: On resale pricing, but beyond them.
Speaker Change: It appears to be a clearer picture.
Speaker Change: Okay.
Speaker Change: Our customers are expressing optimism.
Speaker Change: Let me start truck share customers.
Speaker Change: Storage remains a bright spot wherever we execute with precision.
Speaker Change: Our programs work.
Speaker Change: It's a less bright spot, where we execute with less precision.
Speaker Change: Both self move itself store or consumer.
Speaker Change: Consumer needs and I expect those needs to continue.
Speaker Change: It is my challenge to make you hold the customer's best choice.
Jason: With that I'll turn it to Jason to kind of.
Jason: Specific on the numbers thanks, Joe.
Jason: So yesterday, we reported a fourth quarter loss of $82 3 million.
Jason: 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 a 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.
Jason: Largely from revenue growth.
Jason: Our full year <unk>.
Jason: Fiscal 2025, EBITDA increased by just under $52 million to 1 billion $619 7 million.
Jason: Included in our earnings release and financial supplement.
Jason: Reconciliation of EBITDA to <unk>.
Jason: GAAP earnings.
Jason: Highlight three large differences between the two first.
Jason: Fleet depreciation from the increased level of fleet acquisition and 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 <unk> from the decline in interest income.
Jason: For the fourth quarter, our equipment rental revenue results had a $29 million increase.
Jason: Just over 4%.
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 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: 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 <unk>.
Jason: $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: Our initial projection for net fleet Capex in fiscal year 2026.
Jason: $1 295.
Jason: As compared to approximately $1 billion to 11 in fiscal 2025.
Jason: Switching to self storage revenues were up $18 million or 8% for the quarter.
Jason: Our 12 month results were also up 8% or just under $67 million.
Jason: Average revenue per occupied foot.
Jason: Continued to improve across the entire portfolio of 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: Our occupied unit count at the end of March.
Jason: 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: 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.
Jason: Average occupancy experienced about a 50 basis point decrease to 91, 9%.
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 half of that was newly developed locations along with expansion at existing facilities.
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: Our U box revenue results are included in other revenue in our 10-K filing.
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 coverage storage capacity, our warehouse space for these containers by nearly 25% and we're going to continue to see growth in that area.
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: Our liability costs associated with the fleet were up $27 8 million.
Jason: As of March end of March our moving and storage segment had cash and availability totaling $1 $348 million.
Jason: On our Investor Relations website at investors Dot <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.
Speaker Change: With that I would like to hand, the call back to our operator constant team to begin the question and answer portion of the call.
Speaker Change: 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.
Speaker Change: 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.
Jason: Our first question comes from the line of Steven Ralston from Zacks. Please go ahead.
Steven Ralston: 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.
Jason: Basically the strongest in the last six years exiting 2021, which was an exceptionally strong year.
Jason: And.
Speaker Change: Im interpreting this as.
Jason: The business itself the topline business is getting stronger.
Jason: First of all.
Jason: Ladies you see that you can 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 what was the.
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 if you gave.
Jason: The exact numbers, but I interpreted like 2% to 3% top line growth.
Jason: With you all of us.
Jason: AIDS and experience.
Jason: What's your current outlook for the topline exiting out the depreciation and the other things that are going on.
Jason: Yes.
Joe Steve: This is Joe Steve.
Joe Steve: I think it's picking up we're seeing signs.
Speaker Change: The customers are.
Speaker Change: Positive and of course, there's always horses.
Speaker Change: You can read the paper and go Crazy.
Speaker Change: But at the base store level, I think we're seeing a little bit of consumer optimism and willingness to.
Speaker Change: Sort of some sort of a moving adventure every time someone moves.
Speaker Change: And adventure to put a players so.
Speaker Change: If they are kind of optimistic theyre doing a little more business. So I see them doing a little more business with us.
Speaker Change: They are accepting a little bit of rate increase.
Speaker Change: And when we execute with political with precision.
Speaker Change: They are good with all of this there's not that people don't.
Speaker Change: Don't have the ability to spend money or something like that they just wanted to see.
Speaker Change: Good value for the money or maybe even great value for their money, which we should be in the position of providing.
Speaker Change: We're kind of at the great value.
Speaker Change: Into the spectrum and so on pushing that real hard with my troops I think were seeing a positive response from our customers.
Speaker Change: Thank you now.
Speaker Change: Now moving over to depreciation and you spent a lot of time on that.
Speaker Change: In this call and also in the press release.
Speaker Change: I considered depreciation just in.
Speaker Change: Partly the nature of the business that you're in.
Speaker Change:
Speaker Change: Yes.
Speaker Change: A constant.
Speaker Change: Investment stage of capital.
Speaker Change: For replacing your vehicles and increasing capacity.
Speaker Change: And.
Speaker Change: Depreciation is just the byproduct of that and use it well.
Speaker Change: Two.
Speaker Change: Use that.
Speaker Change: To offset.
Speaker Change: Yeah.
Speaker Change: And expense.
Speaker Change: A noncash expense.
Speaker Change: And at some point.
Speaker Change: There'll be a you'll be able to benefit from that when there is.
Speaker Change: Increased demand and Thats, just the nature of your business in the self storage industry.
Speaker Change: Awesome self moving.
Speaker Change: Lee.
Speaker Change: 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.
Speaker Change: Maybe some investors don't understand that.
Speaker Change: I'm with you.
Speaker Change: Depreciation on self storage is money in the bank.
Speaker Change: But if you wanted to scratch me deep Thats would be my response, there is money in the bank.
Speaker Change: Relax.
Speaker Change: The equipment is different.
Speaker Change: It really is a depreciating asset.
Speaker Change: Through this time, we had a number of things have happened.
Speaker Change: Cost of acquiring equipment.
Speaker Change: Ceded.
Speaker Change: Our upper limit of projections.
Speaker Change: <unk>.
Speaker Change: Something that was.
Speaker Change: We've not seen in.
Speaker Change: In 30 years.
Speaker Change: And then that was coupled with.
Speaker Change: A shortage of equipment, which is split.
Speaker Change: Runs repair expense up and also causes us.
Speaker Change: In the present year to be acquiring more trucks than we would on a.
Speaker Change: On a normal adjusted basis.
Speaker Change: But I think youre absolutely.
Speaker Change: Equipment depreciation if we can.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Chris.
Speaker Change: <unk> been grossly subsidizing electric vehicle misadventures.
Speaker Change: Hi.
Speaker Change: Jacking, the people, who buy internal combustion engines, whether it's consumers or fleets.
Speaker Change: And.
Speaker Change: That's.
Speaker Change: That's created a net loss for everybody that automakers lost money because they couldn't sell to them.
Speaker Change: 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.
Speaker Change: If you look at it over a 10 year trend, but we are improving and the feedback I get from the automakers is.
Speaker Change: They are pretty much done with the charade of net zero.
Speaker Change: And it's.
Speaker Change: It's going to allow them to write their boat.
Speaker Change: Most of these people are actually manufacturing.
Speaker Change: Behemoths there excellent added if you let them go.
Speaker Change: But they have.
Speaker Change: Whatever you want to say drunk, the Kool aid and not done which is their forte.
Speaker Change: And I think they are focused on getting back to their <unk> and that will benefit us.
Speaker Change: Although there'll be some little lumps and bumps getting there I think it is going to benefit us.
Speaker Change: I saw you.
Speaker Change: Article this morning.
Speaker Change: Mary Barra commented positively on.
Speaker Change: On tariffs and of course, the article speculated whether she was trying to curry favor with the Trump administration are actually believes this.
Speaker Change: So she may be correct okay.
Speaker Change: It's a very good. So these are complicated equation, how this cost works through the economy, but costs that are just wasted in other words money spent to develop.
Speaker Change: A vehicle that you can sell for 50, but cost you 100, such.
Speaker Change: Such as pure waste in the economy.
Speaker Change: We've been the victim of that.
Speaker Change: And I think thats coming to a halt and as that comes to a halt.
Speaker Change: <unk>.
Speaker Change: The statement that depreciation is a normal thing.
Speaker Change: We will be absolutely true it should be a normal thing.
Speaker Change: Amen.
Speaker Change: Alright.
Speaker Change: The green, but disappointed that we didn't properly C E.
Speaker Change: The extent to which this could go in other words, our projections the range of our projections did not encompass.
Speaker Change: What actually happened on either.
Speaker Change: Klein in retail that resale value or the.
Speaker Change: Amount that automakers would attempt to make stick on acquisition prices.
Speaker Change: Now coming back.
Speaker Change: Where theyre more comprehensible and normally they work well for the whole economy. So I expect this is demonstrating itself out.
Speaker Change: 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.
Speaker Change: On on trucks, it's real but it should match to revenue.
Speaker Change: Thank you very much for taking my questions.
Speaker Change: Sure.
Speaker Change: Yeah.
Operator: Your next question is from the line of Steven Ramsey from Samson or research group. Please ask your question.
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 what do you attribute that step up to I saw the comment that moving and storage containers both.
Steven Ramsey: Increasing where they increasing at similar.
Steven Ramsey: <unk> levels on a year over year basis.
Steven Ramsey: This is Jason I'll start with that.
Steven Ramsey: The moving transactions.
Steven Ramsey: The U box moving transactions are growing at a faster rate than the <unk>.
Steven Ramsey: <unk> containers that we're keeping in storage now both of them.
Steven Ramsey: 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.
Steven Ramsey: With as many containers that we have acquired in warehouse space that we built out our big opportunity is to is to keep more of those containers that storage.
Speaker Change: Okay, and then the 17% growth I mean.
Steven Ramsey: So you can't pinpoint it to 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: This is Joe I think.
Joe: My expectation is to stay in that range the market is vast.
Joe: Done this largely without cannibalizing our existing customer base.
Joe: So we've been able to.
Steven Ramsey: Growth in both of those segments.
Steven Ramsey: I see.
Steven Ramsey: The.
Steven Ramsey: New box.
Steven Ramsey: Has a higher growth rate than.
Steven Ramsey: The truck share operation.
Steven Ramsey: Many years to come I, just think thats the nature of it of course, it's smaller.
Steven Ramsey: But it's all the markets less explored also.
Steven Ramsey: And it's not a simple cannibalization of our other customer.
Steven Ramsey: So.
Steven Ramsey: I think you can project to be at higher end.
Steven Ramsey: I certainly am.
Steven Ramsey: Banking on that.
Steven Ramsey: That's great to hear I wanted to shift to real estate investments next next year.
Speaker Change: Storage pipeline is down a million herself from the prior quarter and the U box warehouse space grew meaningfully last year do you expect real estate Capex.
Steven Ramsey: Be at similar levels in FY 'twenty, six or do you expect it to moderate a bit just maybe your logic behind where you see it going.
Jason: Well I'll touch it and I'll, let Jason he has.
Speaker Change: He is the voice of reason here, which I think is the position you'd like in the play.
Speaker Change: I'm the voiceover.
Speaker Change: Get there before somebody else does so with with U box. We we've done a lot of just plain to get positioned in markets, where we werent positioned.
Jason: And.
Jason: With the exception of a few major markets and I'll pick.
Jason: 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.
Jason: So, but we have.
Jason: U box capacity throughout.
Jason: North America.
Jason: And we're.
Jason: 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 I need more more more now.
Jason: Now we need too homely.
Jason: Exploit the asset that we've built because of course, that's where.
Jason: That's the whole point of this so as Jason said as we get more people into storage and continue to grow that.
Jason: Moving franchise.
Jason: New box product.
Jason: We will be leveraging those assets and that should be positive leverage.
Jason: Okay.
Jason: That's great and then last one from me again to stay on the real estate side of things.
Jason: We brought a lot of storage capacity online recently that is self storage.
Jason: Charity period is it still moving at the historical clip on a going from day, one to year, one two and three.
Jason: And then secondly, you have a larger percentage of units.
Jason: In that early phase of ramp up right now it seems can you talk about the <unk>.
Jason: Impact that has on EBITDA.
Jason: Sure.
Jason: Timeline transitioning from.
Jason: Money, losing to EBITDA positive as storage units mature.
Jason: Stephen This is Jason so the.
Jason: R R.
Jason: Our rough estimate is usually.
Jason: Approaching 70% of 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: Let's say that that may be a couple of points percentage points slower than what we've seen before and I'm, excluding the COVID-19 years.
Jason: Winter unusable.
Jason: So.
Jason: And that would point to more of a management challenge versus a consumer challenge.
Jason: Trying to get the facility filled up to the 90% plus.
Jason: Otherwise in the first three or four years.
Jason: We are monitoring these new facilities that come on I'm not seeing any.
Jason: Any real weakness.
Jason: They are leasing up.
Jason: Okay.
Jason: Okay.
Jason: That's great. Thank you for taking my questions.
Speaker Change: Your next question is from the line of Ana <unk> from Wolfe Research. Please ask your question.
Ana: Hey, good morning, everyone and appreciate you taking the question really excited to get a call for the first time.
Ana: 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, it's all great news.
Ana: Big topic today is like Paris, right at that kind of happened early April so as you look at the business on a month to month basis.
Ana: 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 state given uncertainty or anything like that.
Ana: I'll answer this.
Ana: To give their opinion because there is not.
Ana: With some of that effect.
Ana: On that I'd appreciate hearing.
Ana: My opinion my observation.
Ana: Is that.
Ana: If we.
Ana: Communicate strong value.
Ana: With the consumer.
Ana: It's still positive.
Ana: A little picky.
Ana: And where I have stores that are.
Ana: Poorly managed.
Ana: My business is down that'd be my answer to you.
Ana: I will never get every store.
Ana: Managed with precision but.
Ana: Get the most of them there and Thats Thats My task.
Speaker Change: So no I have not seen this and I've been very curious about this like Houston.
Speaker Change: Tariffs going to meet consumers' uncertain and then they do nothing if you ask my opinion when people are uncertain they don't mode.
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 that's all.
Brian: Thanks, Brian.
Speaker Change: It's been around for a very long time Easter break in here. So just wanted to kind of get your sense on do.
Speaker Change: <unk> seen things through the cycle before so as you kind of look at.
Speaker Change: Just where 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 housing on the moving side.
Speaker Change: Yes.
Speaker Change: Again, moving as is the need for the consumer.
Ana: That continues into question as they used to be for.
Ana: Much of my career. It was 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 you see they've always been moving and of course should watch investor moving they're moving and wagons for God's sakes. So the question is what's the mode.
Ana: They.
Ana: We're going to move.
Ana: The question is can you get them into a commercial transaction that works good for both sides.
Ana: It is a value and can we use a profit out and.
Ana: That's.
Ana: 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.
Ana: Accumulating data on the subject, but when can we get more of them to enter into a commercial transaction and of course, specifically with new home.
Ana: And.
Ana: So that's kind of our task.
Ana: But if people shut down and I've seen it where they've shut down.
Ana: 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 won the distance they move declines.
Ana: Overall, there is a little bit of Anxiousness in the consumer group.
Ana: Yes.
Speaker Change: Okay got it got it Super helpful. Super household so moving on to Canada. The 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 you remember a couple of quarters bag I kind of talked about these developments you can bring in say like 10% yield 10% returns on these storage developments on the real estate Daddy kind of here maybe.
Speaker Change: Maybe tariffs, making input costs go up or immigration policy you could potentially.
Speaker Change: On the labor side of the equation, So would you would that.
Speaker Change: Potentially impact some of the yields you guys and kind of in there.
Speaker Change: We expect that for the future pipeline that 10%.
Speaker Change: Andy.
Jason: This is Jason I have spoken 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.
Speaker Change: And 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 the cost of construction have been.
Speaker Change: Gradually coming down for us.
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 pencil.
Speaker Change: That's.
Speaker Change: It doesn't mean that actual costs have declined but what we're paying.
Speaker Change: Okay.
Speaker Change: Okay got it.
Speaker Change: Great.
Speaker Change: Helpful. That's helpful.
Speaker Change: Really great that you guys can shall I call it stack.
Speaker Change: So really you can follow on on the storage side a lot of times you cannot look at your companies.
Speaker Change: On operating side I realize bolt signed some household could be disconnecting devaluation of the real estate. So looking at the storage space and you guys are on a pretty sizeable.
Speaker Change: Footprint on a kind of look at the.
Speaker Change: The other story is known to recovery here.
Speaker Change: In the private markets.
Speaker Change: The value of a screen of the self storage facility.
Speaker Change: Curious about your thoughts of glut Carlo what what that what the market also tunnel.
Speaker Change: Are you guys are trading.
Speaker Change: There was a disconnect maybe in <unk>.
Speaker Change: Folks are looking at the volume and on the storage portfolio.
Speaker Change: Yeah.
Jason: This is Jason.
Jason: To answer that.
Speaker Change: Is we've been trying to provide more details to help people value that so that's an indication of we think that theres. A disconnect. We think that there is more.
Jason: As people understand is more that we.
Jason: We think the company is worth more.
Jason: And then then where it's trading at.
Jason: We've been working with Wolfe.
Speaker Change: Our other analysts in order to try to communicate that story so.
Speaker Change: As far as sizing 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.
Speaker Change: Yes for sure for sure.
Speaker Change: I appreciate you taking my question today.
Speaker Change: Happy to be washing him alone and then I'll get sportswear in Geismar I appreciate it. Thank you.
Speaker Change: Youre welcome.
Jamie Wilen: Your next question is from the line of Jamie Wilen from Woolen 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 looks at the growth of your self storage as well as.
Speaker Change: Floating and new box, there, which most of the other self storage people do not have a similar component.
Jamie Wilen: 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 one would hope other than just.
Jamie Wilen: Putting out information to additional wall Street analysts that the company can garner our plans for how to.
Jamie Wilen: Reduced that valuation gap since our self storage is so undervalued relative to its peers in.
Jamie Wilen: In the markets.
Jamie Wilen: Yes, I think thats.
Jamie Wilen: Great comment Jamie in <unk>.
Jamie Wilen: Of course, as you know invest business and so.
Jamie Wilen: Optimizing that.
Jamie Wilen: Selfish self interest.
Jamie Wilen: Okay.
Jamie Wilen: Welcome input on the subject and then trying to get there.
Jamie Wilen: But would you all consider repurchasing shares at this tremendous discount to intrinsic value to close that valuation gap.
Jamie Wilen: Im torn on that we did some repurchases I don't know what 10 or 12 15 years ago.
Jamie Wilen: Right.
Jamie Wilen: Some members of my family liked it because it felt like they were getting.
Jamie Wilen: More and more.
Jamie Wilen: Wealthy yourself, but it didn't give any more money to spend so I don't know if it really.
Jamie Wilen: Get a lot of it but at the same time.
Jamie Wilen: Patients keeping a pretty.
Jamie Wilen: He is putting his position and trying to make sure we keep ourselves very.
Jamie Wilen: Liquidity and very flexible because of.
Jamie Wilen: There is significant uncertainty.
Jamie Wilen: And financial markets.
Jamie Wilen: I would say relative to five years ago maybe.
Jamie Wilen: So he is trying to keep me too.
Jamie Wilen: Keeping blue.
Jamie Wilen: Fair amount of liquidity.
Jamie Wilen: So it has not been proposed there is no proposal in front of the board or.
Jamie Wilen: Any particular board member that I recall, this agitating for share back and I'm not a agitating for one division.
Jamie Wilen: So we made the case that certainly we've talked about it.
Jamie Wilen: <unk>.
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: The 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.
Speaker Change: It's a different equation today.
Speaker Change: Well I appreciate you making that point.
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.
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.
So we have a portfolio of common stock at the property and casualty companies 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.
Speaker Change: Understood.
Speaker Change: Shareholder.
Speaker Change: It.
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 and your thoughts in that direction.
Speaker Change: Yes, I think thats.
Speaker Change: <unk> 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.
Speaker Change: But the idea is clear.
Speaker Change: So I guess I'd leave it at that.
Speaker Change: Okay, Alright, thanks, Alan I appreciate it.
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.
Speaker Change: I don't have.
Speaker Change: <unk>, we don't run that statistic, but it <unk>.
Speaker Change: If you looked at.
Speaker Change: Yeah.
Speaker Change: Unused mileage does the words, let's take 130000 trucks.
Speaker Change: How many miles do we have left in that fleet on a per truck basis.
Speaker Change: When we did pre COVID-19 pre.
Speaker Change: Pre COVID-19 was our highest.
Speaker Change: We would have had the highest number of.
Speaker Change: Unused and therefore available miles in the fleet.
Speaker Change: We have.
Speaker Change: Steadily been increasing that in this year.
Speaker Change: We will increase again and.
Speaker Change: We.
Speaker Change: I was just thrilled.
Speaker Change: Prior to Covid, because I thought.
Speaker Change: Okay.
Speaker Change: We got the company into a strong position there.
Speaker Change: And then Covid came in we had at.
Speaker Change: At first.
Speaker Change: Our own fear and then to acquire more capital trucks, and then the automakers inability or unwillingness to manufacture the trucks. So between the two of those factors.
Speaker Change: <unk> declined rapidly and you saw that in escalating repair expense.
Speaker Change: Couple hundred million dollars short period of time.
Speaker Change: Because the trucks.
Speaker Change: As on average were.
Speaker Change: Not necessarily older but had more miles.
Speaker Change: Our unused unless unused miles available.
Speaker Change: All of these trucks have different amounts of miles that they're good for them too.
Speaker Change: Theres not a one index number, but so I think we're probably.
Speaker Change: By the end of this.
Speaker Change: Bill, which will go through the <unk>.
Speaker Change: One we're in now basically is going to go through.
Speaker Change: Next March.
Speaker Change: I think we're probably above 90%.
Speaker Change: Pre COVID-19, but I don't have an absolute.
Speaker Change: Calculation, we look at that twice a year and try to.
Speaker Change: Yes.
Speaker Change: Whole bunch of suppositions would try to comprehend what it is.
Speaker Change: <unk>.
Speaker Change: So.
Speaker Change: I don't have a number of the preliminary mine, but we're gaining ground, which is to me the point gain the ground to gain a little ground you'll get there.
Speaker Change: And there is no.
Speaker Change: Get too much out of the fleet to new and it just cost too much.
Speaker Change: So you want to comment.
Speaker Change: We want to have the fleet if I had my druthers I'd have.
Speaker Change: An equal percentage of every model in every year of production, but it never comes in that way and so.
Speaker Change: Sometimes they have to buy 30% of our particular models fleet in one year, because thats just whats available what can be done, but it kind of puts a lumpiness snake as we digest that.
Speaker Change: We just see it coming to Spike casino.
Speaker Change: Rattle through a snake, it's just kind of a little lumpy kind of works itself out.
Speaker Change: We're not as good as pre COVID-19, but pre COVID-19 who's the best where.
Speaker Change: 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.
Speaker Change: A rough truck I would expect youre going to get a good truck.
Speaker Change: There's been times in my career, where I would say you've got a 50 50 chance you may get a rough truck.
Speaker Change: Youre not going to go back and experienced that today, so that helps build our business because consumers somehow communicate about that they know.
Speaker Change: I can even tell by model when they think our truck.
Speaker Change: We use a little bit.
Speaker Change: Not up to their expectations.
Speaker Change: Yes.
Speaker Change: I think we're not seeing we're not we're not that's not being a problem for us right now.
Speaker Change: There is not a pump.
Speaker Change: We are paying up for it that's what you're seeing this depreciation we're paying out right and that's I just wanted to follow up with that.
Speaker Change: Correct me, if I'm wrong, but when.
Speaker Change: There were no supply constraints with the fleet rotation I always kind of thought of.
Speaker Change: Maintenance expense is increasing as the depreciation is decreasing and the two more or less rounds out over the life.
Speaker Change: And the vehicle.
Speaker Change: Is it now.
Speaker Change: 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 spend this year than last year and not much before that.
Speaker Change: Thanks.
Speaker Change: So.
Speaker Change: I'm, sorry, I do not want a good not characterize it as the new normal.
Speaker Change: Again, I expect that automakers will continue to improve quality and.
Speaker Change: And maybe even pricing going ahead, they have room, there if they can get themselves focused on it and get their cost allocated.
Speaker Change: So theyre not.
Speaker Change: Constantly trying to subsidize another vehicle.
Speaker Change: So they're very good at this they're very knowledgeable people in.
Speaker Change: In my conversations with them as of late that is their focus I couldnt have said that two years ago.
Speaker Change: So they get focused on this I think they'll do.
Speaker Change: Good job and that will trickle through to US and then we have to do with <unk>.
Speaker Change: A good job of trucks, we buy we buy.
Speaker Change: <unk> is the right amount so.
Speaker Change: And then there's always the issue that Jamie Wilen.
Speaker Change: 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.
Speaker Change: Trucks, It has a square U haul box over backwards.
Speaker Change: 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.
Speaker Change: An eight year projection.
Speaker Change: This is kind of a more of a projection.
Speaker Change: Try to be real sober about that because.
Speaker Change: Because we intend to be here seven or eight years from now and our positions and we don't want it to be reflecting quarterly officer.
Speaker Change: So.
Speaker Change: What we're trying to do that to the very best of our ability.
Speaker Change: And it will become easier as the automakers' focus back on their core competencies.
Speaker Change: Because they're more predictable things are predictable.
Speaker Change: All of this.
Speaker Change: Green business is just.
Speaker Change: Disrupted.
Speaker Change: Go to a car dealer I've talked to the dealer.
Speaker Change: Taylor will be.
Speaker Change: Right.
Speaker Change: He has a bunch of unsold inventory and a bunch of orders for for vehicles. He can't source.
Speaker Change: Thats just that just means the supply chain has been disrupted and we need to do.
Speaker Change: Irrationally, so supply chain, which I think is.
Speaker Change: Yes.
Speaker Change: Speedily being addressed and they will get it right because that is what they do well out.
Speaker Change: Okay.
Speaker Change: That's great. Thank you very much.
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.
Speaker Change: 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.
Speaker Change: This concludes today's conference call. Thank you very much for your participation you may now disconnect.
Speaker Change: [noise].