RENO, Nev., Feb. 8, 2006 (PRIMEZONE) -- AMERCO (Nasdaq:UHAL), the parent of U-Haul International, Inc., Oxford Life Insurance Company, Republic Western Insurance Company and Amerco Real Estate Company, today reported net earnings available to common shareholders for its third quarter ending December 31, 2005, of $11.9 million or $0.57 per share, compared with net earnings of $18.3 million, or $0.88 per share for the same period last year. Earnings for the quarter ended December 31, 2004, included nonrecurring, after-tax litigation settlement proceeds of $1.56 per share. Taking these after-tax litigation settlement proceeds in effect, the adjusted earnings per share for the quarter ended December 31, 2004 was a loss of $0.68 per share.
For the nine-month period ending December 31, 2005, net earnings available to common shareholders was $109.6 million or $5.26 per share, compared with net earnings of $109.3 million, or $5.25 per share for the same period last year. Included in the December 31, 2005 nine-month results is a nonrecurring after-tax charge of $1.08 per share associated with the company's first quarter refinancing. The December 31, 2004 nine-month results included nonrecurring, after-tax litigation settlement proceeds of $1.56 per share. Taking into effect the after tax proceeds and refinancing costs the adjusted earnings per share was $6.34 for the nine months ended December 31, 2005 compared with $3.69 for the nine months ended December 31, 2004.
"We are pleased with our financial and operational performance for the quarter and nine months," stated Joe Shoen, chairman of the board of AMERCO. "We have made significant progress on our established objectives and goals for economic performance, which include rotating our fleet by introducing approximately 12,000 new trucks, which replace older trucks removed from our fleet, positioning our rental fleet to achieve greater revenue and transaction growth, increasing our market presence in the storage industry through our Storage Affiliate Program, optimizing storage occupancy, eliminating losses at our property and casualty business and improve profitability at our life insurance company. We will continue to focus on these areas throughout the fourth quarter and into fiscal 2007 to enhance future operating results for our organization and our shareholders," Shoen concluded.
Report on Business Operations
Listed on a consolidated basis, are revenues for our major product
lines.
Quarter Ended Nine Months Ended
Dec. 31, Dec. 31,
2005 2004 2005 2004
------------------ ----------------------
(Unaudited)
(In thousands)
Self-moving equipment
rentals $353,409 $328,471 $1,201,374 $1,147,369
Self-storage revenues 29,784 28,846 92,153 88,359
Self-moving &
self-storage products &
service sales 47,316 42,694 176,371 161,967
Property management fees 4,289 2,880 12,558 8,971
Life insurance premiums 30,743 31,241 90,050 96,535
Property & casualty
insurance premiums 9,949 3,975 20,172 20,815
Net investment & interest
income 12,807 17,109 38,873 46,160
Other revenue 7,373 6,281 29,093 23,686
------------------ ----------------------
Consolidated revenue 495,670 461,497 1,660,644 1,593,862
================== ======================
Revenues for the Quarter Ended December 31, 2005
During the third quarter of fiscal 2006, self-moving equipment rentals increased $24.9 million, with increases in truck, trailer and support rental items. These increases were due to improved equipment utilization, pricing and product mix.
Self-storage revenues increased $0.9 million for the third quarter of fiscal 2006, compared with the third quarter of fiscal 2005. Occupancy rates increased period over period.
Sales of self-moving and self-storage products and services increased $4.6 million for the third quarter of fiscal 2006, compared with the third quarter of fiscal 2005, generally following the growth in self-moving equipment rentals. Support sales items, hitches and propane all had increases for the period.
RepWest continued to exit from non U-Haul related lines of business. However, premium revenues increased $6 million for the third quarter of fiscal 2006, compared with the third quarter of fiscal 2005. These increases were due to retrospective premiums related to U-Haul business in fiscal 2006. Additionally, fiscal 2005 included the commutation of a non U-Haul related reinsurance contract reducing premium revenues for that quarter.
Oxford's premium revenues declined $0.5 million. The ratings upgrade by A.M. Best to B+, which occurred in October 2005 was too late in the quarter to impact current results although it is expected to support the expansion of its distribution capabilities in the future.
Net investment and interest income decreased $4.3 million for the third quarter of fiscal 2006, compared with the third quarter of fiscal 2005, due primarily to declining invested asset balances at the insurance companies.
As a result of the above-mentioned items, revenues for AMERCO and its consolidated entities were $495.7 million for the third quarter of fiscal 2006, compared with $461.5 million for the third quarter of fiscal 2005.
Revenues for the Nine Months Ended December 31, 2005
During the nine months of fiscal 2006, self-moving equipment rentals increased $54 million, with increases in truck, trailer and support rental items. The increases were due to improved equipment utilization, pricing and product mix that included new trucks introduced into the fleet, which replaced older trucks.
Self-storage revenues increased $3.8 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005. Occupancy rates increased period over period along with improved pricing.
Sales of self-moving and self-storage product and services increased $14.4 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005, generally following growth in self-moving equipment rentals. Support sales items, hitches and propane all had increased for the period.
RepWest continued to exit non-U-Haul related lines of business, resulting in a $3.4 million decrease in premiums for the nine months of fiscal 2006, compared with the first nine months of fiscal 2005. Premiums related to U-Haul related business increased $2.8 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005.
Oxford's premium revenues declined $6.5 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005. The ratings upgrade by A.M. Best to B+, which occurred in October 2005 was too late in the quarter to impact current results although it is expected to support the expansion of its distribution capabilities in the future.
Net investment and interest income decreased $7.3 million for the first nine months of fiscal 2006, compared with the first nine months of fiscal 2005, due primarily to declining invested asset balances at the insurance companies.
As a result of the items mentioned above, revenues for AMERCO and its consolidated entities were $1,660.6 million for the nine months of fiscal 2006, compared with $1,593.9 million for the nine months of fiscal 2005.
Listed below are revenues and earnings from operations at each of our four operating segments.
Quarter Ended Nine Months Ended
Dec. 31, Dec. 31,
2005 2004 2005 2004
------------------ -----------------------
(Unaudited)
(In thousands)
Moving and storage
Revenues $441,725 $407,691 $1,504,671 $1,423,971
Earnings from operations 42,689 3,591 276,227 193,097
Property and casualty
insurance
Revenues 12,827 10,802 29,193 35,878
Earnings (loss) from
operations (1,597) (9,218) 1,727 (8,749)
Life insurance
Revenues 37,064 39,442 111,407 122,494
Earnings (loss) from
operations 2,620 (3,440) 9,357 2,730
SAC Holding II
Revenues 10,870 10,106 35,541 33,228
Earnings from operations 3,630 2,138 10,730 9,598
Eliminations
Revenues (6,816) (6,544) (20,168) (21,709)
Earnings from operations (1,923) 7,220 (11,824) (1,004)
Consolidated results
Revenues 495,670 461,497 1,600,644 1,593,862
Earnings from operations 45,419 291 286,217 195,672
Results for the Quarter Ended December 31, 2005
Total costs and expenses decreased $11 million for the third quarter of fiscal 2006, compared with the third quarter of fiscal 2005. Increases in operating costs associated with the improved business volume at moving and storage centers were offset by reductions in repair and maintenance expenses related to rotating the fleet. New trucks with lower initial maintenance costs are replacing trucks with higher maintenance costs. The third quarter of fiscal 2005 included a $6.4 million charge for litigation at Oxford, not present in fiscal 2006.
As a result of the above-mentioned changes in revenues and expenses, earnings from operations improved to $45.4 million for the third quarter of fiscal 2006, compared with $0.3 million for the third quarter of fiscal 2005.
Interest expense for the third quarter of fiscal 2006 was $17.8 million, compared with $16.9 million in the third quarter of fiscal 2005, due to an increase in the average amount borrowed. The expense related to the increase in average borrowings was partially offset by a reduction in the average borrowing rate resulting from refinancing activities in fiscal 2006.
During the third quarter of fiscal 2005, the company settled litigation against its former auditor and received a settlement (net of attorney's fees and costs) of $51.3 million before taxes. The settlement had the effect of increasing, on a nonrecurring basis, earnings and earnings per share for the quarter ended December 31, 2004, by $32.5 million, and by $1.56 per share, respectively.
Income tax expense was $12.5 million in the third quarter of fiscal 2006, compared with $13.2 million in the third quarter of fiscal 2005.
Dividends accrued on our Series A preferred stock were $3.2 million in the third quarter of both fiscal 2006 and 2005.
As a result of the above-mentioned items, net earnings available to common shareholders were $11.9 million in the third quarter of fiscal 2006, compared with $18.3 million in the third quarter of fiscal 2005.
Basic and diluted earnings per share in the third quarter of fiscal 2006 were $0.57, compared with $0.88 in the third quarter of fiscal 2005. Earnings per share adjusted for the nonrecurring litigation settlement were $0.57 in the third quarter of fiscal 2006, compared with a loss of $0.68 per share in the third quarter of fiscal 2005.
Results for the Nine Months Ended December 31, 2005
Total costs and expenses decreased $23.8 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005. Increases in operating costs associated with the improved business volume in the Moving and Storage segment were offset by reductions in repair and maintenance expenses related to rotating the fleet. Benefits and losses at the insurance companies decreased $21.5 million for the nine months of fiscal 2006, compared with the nine months of fiscal 2005, as loss ratios have improved and exposure has declined. Fiscal 2005 included a $6.4 million charge for litigation at Oxford not present in fiscal 2006.
As a result of the above-mentioned changes in revenues and expenses, earnings from operations improved to $286.2 million for the nine months of fiscal 2006, compared with $195.7 million for the nine months of fiscal 2005.
Interest expense for the first nine months of fiscal 2006 was $88.3 million compared with $54 million for the first nine months of fiscal 2005. Fiscal 2006 results included a one-time, nonrecurring charge of $35.6 million before taxes related to the early termination of existing indebtedness. The charge had the effect of decreasing, on a nonrecurring basis, net earnings and earnings per share for the nine months ended December 31, 2005 by $22.5 million and $1.08, respectively.
During the third quarter of fiscal 2005, the Company settled its litigation against its former auditor and received a settlement (net of attorney's fees and costs) of $51.3 million before taxes. The settlement had the effect of increasing, on a nonrecurring basis, net earnings and earnings per share for the nine months ended December 31, 2004, by $32.5 million, which increased prior year earnings per share of $1.56.
Income tax expense was $78.6 million in the nine months of fiscal 2006, compared with $74.0 million in the nine months of fiscal 2005.
Dividends accrued and paid on our Series A preferred stock were $9.7 million for the first nine months ended December 31, 2005 and 2004, respectively.
As a result of the above-mentioned items, net earnings available to common shareholders were $109.6 million in the nine months of fiscal 2006, compared with $109.3 million in the first nine months of fiscal 2005.
Basic and diluted earnings per share were $5.26 in the nine months of fiscal 2006, compared with $5.25 in the nine months of fiscal 2005. Adjusted basic and diluted earnings per share were $6.34 in the nine months of fiscal 2006, compared with $3.69 in the nine months of fiscal 2005.
Fiscal 2007 Outlook
There have been many developments which we believe should positively affect performance in the fourth quarter of fiscal 2006 and into fiscal 2007. We believe the momentum in our Moving and Storage operations will continue. We are investing in our rental truck fleet to further strengthen our "do-it-yourself" moving business. During the remainder of this fiscal year, we anticipate putting an additional 2,700 large and midsize rental trucks in service. In addition, production has been initiated for trailers, with an expected production of 3,500 by the end of April 2006. This investment is expected to increase the number of rentable equipment days available to meet customer demands and will reduce future spending on repair costs and equipment downtime.
At RepWest, our plans to exit non U-Haul related lines are progressing.
At Oxford, the recent ratings upgrade by A.M. Best in October 2005 to B+ should support the expansion of its distribution capabilities.
Our objectives for the remaining quarter in fiscal 2006 and the first part of 2007 are to position our rental fleet to achieve revenue and transaction growth, and continue to drive down operating costs. The above-mentioned investment in our fleet will provide a strong basis for meeting these objectives.
AMERCO Third Quarter Fiscal 2006 Investor Call Information
AMERCO will hold its investor call for the third quarter of fiscal year 2006 on Thursday, February 9, 2006, at 10 a.m., Mountain Time (12 p.m. Eastern). The call will be broadcast live over the Internet at www.amerco.com. To hear a simulcast of the call, or a replay, visit www.amerco.com.
Use of Non-GAAP Financial Information
The company reports its financial results in accordance with GAAP. However, the company uses certain non-GAAP performance measures including adjusted earnings per share to provide a better understanding of the Company's underlying operational results. The Company uses adjusted earnings per share to present the impact of certain transactions or events that management expects to be infrequently occurring.
AMERCO is the parent company of U-Haul International, Inc., North America's largest do-it-yourself moving and storage operator, Amerco Real Estate Company, Republic Western Insurance Company and Oxford Life Insurance Company. With a network of over 15,300 locations in all 50 United States and 10 Canadian provinces, U-Haul is celebrating its 60th year of serving customers. The company has the largest consumer truck rental fleet in the world, with over 93,000 trucks, 78,750 trailers and 36,100 towing devices. U-Haul has also been a leader in the storage industry since 1974, with more than 340,000 rooms, approximately 33 million square feet of storage space and more than 1,050 facilities throughout North America.
Certain of the statements made in this press release regarding our business constitute forward-looking statements as contemplated under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of various risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. For a brief discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-Q for the quarter ended December 31, 2005, which is on file with the SEC.
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec. 31, Mar. 31,
2005 2005
--------- ---------
(Unaudited)
Assets (In thousands)
Cash and cash equivalents $ 247,150 $ 55,955
Reinsurance recoverables & trade
receivables, net 238,483 236,817
Notes and mortgage receivables, net 1,838 1,965
Inventories, net 70,934 63,658
Prepaid expenses 22,162 19,874
Investments, fixed maturities 669,587 635,178
Investments, other 233,228 345,207
Deferred policy acquisition costs, net 48,117 52,543
Other assets 99,044 85,291
Related party assets 265,442 252,666
--------- ---------
1,895,985 1,749,154
--------- ---------
Property, plant and equipment, at cost;
Land 174,337 151,145
Buildings and improvements 742,699 686,225
Furniture and equipment 274,786 265,216
Rental trailers and other rental
equipment 202,280 199,461
Rental trucks 1,273,926 1,252,018
SAC Holding II - PP&E 79,132 77,594
--------- ---------
2,747,160 2,631,659
Less: Accumulated depreciation (1,276,938) (1,277,191)
--------- ---------
Total property, plant and equipment 1,470,222 1,354,468
--------- ---------
Total assets 3,366,207 3,103,622
========= =========
Liabilities & stockholders' equity
Liabilities:
Accounts payable & accrued expenses $ 206,192 $ 206,763
AMERCO notes and loans payable 942,092 780,008
SAC Holding II notes & loans payable 76,572 77,474
Policy benefits & losses, claims &
loss expenses payable 799,503 805,121
Liabilities from investment contracts 463,366 503,838
Other policyholders' funds & liabilities 14,764 29,642
Deferred income 21,258 38,743
Deferred income taxes 133,677 78,124
Related party liabilities 8,818 11,070
--------- ---------
Total liabilities 2,666,242 2,530,783
--------- ---------
Stockholders' Equity:
Series A common stock 929 929
Common stock 9,568 9,568
Additional paid-in capital 365,531 350,344
Accumulated other comprehensive income (29,604) (30,661)
Retained earnings 781,273 671,642
Cost of common shares in treasury, net (418,092) (418,092)
Unearned employee stock ownership
plan shares (9,640) (10,891)
--------- ---------
Total stockholders' equity 699,965 572,839
--------- ---------
Total liabilities & stockholders' equity 3,366,207 3,103,622
========= =========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended December 31,
2005 2004
---------- ----------
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues:
Self-moving equipment rentals $ 353,409 $ 328,471
Self-storage revenues 29,784 28,846
Self-moving and self-storage
products and service sales 47,316 42,694
Property management fees 4,289 2,880
Life insurance premiums 30,743 31,241
Property and casualty insurance premiums 9,949 3,975
Net investment and interest income 12,807 17,109
Other revenue 7,373 6,281
---------- ----------
Total revenues $ 495,670 $ 461,497
---------- ----------
Costs and expenses:
Operating expenses 271,368 286,518
Commission expenses 42,548 39,302
Cost of sales 23,376 21,361
Benefits and losses 35,202 40,958
Amortization of deferred policy
acquisition costs 5,754 6,279
Lease expense 37,182 38,506
Depreciation, net 34,821 28,282
---------- ----------
Total costs and expenses $ 450,251 $ 461,206
---------- ----------
Earnings from operations 45,419 291
Interest expense (17,791) (16,931)
Litigation settlement -- 51,341
---------- ----------
Pretax earnings 27,628 34,701
Income tax expense (12,458) (13,155)
---------- ----------
Net earnings 15,170 21,546
Less: Preferred stock dividends (3,241) (3,241)
---------- ----------
Earnings available to common shareholders $ 11,929 $ 18,305
========== ==========
Basic and diluted earnings per
common share $ 0.57 $ 0.88
========== ==========
Adjusted earnings per share
Basic and diluted earnings per
common share $ 0.57 $ 0.88
Less: After tax litigation settlement
proceeds -- (1.56)
---------- ----------
Adjusted basic and diluted earnings per
common share 0.57 (0.68)
========== ==========
Weighted average common shares outstanding:
Basic and diluted shares 20,865,684 20,813,805
========== ==========
AMERCO AND CONSOLIDATED ENTITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended
December 31,
2005 2004
---------- ----------
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues:
Self-moving equipment rentals $1,201,374 $1,147,369
Self-storage revenues 92,153 88,359
Self-moving and self-storage products
and service sales 176,371 161,967
Property management fees 12,558 8,971
Life insurance premiums 90,050 96,535
Property and casualty insurance premiums 20,172 20,815
Net investment and interest income 38,873 46,160
Other revenue 29,093 23,686
---------- ----------
Total revenues 1,660,644 1,593,862
---------- ----------
Costs and expenses:
Operating expenses 827,861 845,876
Commission expenses 143,763 138,069
Cost of sales 85,337 77,617
Benefits and losses 89,225 111,010
Amortization of deferred policy
acquisition costs 17,806 24,015
Lease expense 107,055 115,389
Depreciation, net 103,380 86,214
---------- ----------
Total costs and expenses 1,374,427 1,398,190
---------- ----------
Earnings from operations 286,217 195,672
Interest expense (52,672) (53,995)
Fees on early extinguishment of debt (35,627) --
Litigation settlement -- 51,341
---------- ----------
Pretax earnings 197,918 193,018
Income tax expense (78,564) (73,994)
---------- ----------
Net earnings 119,354 119,024
Less: Preferred stock dividends (9,723) (9,723)
---------- ----------
Earnings available to common shareholders $ 109,631 $ 109,301
========== ==========
Basic and diluted earnings per
common share $ 5.26 $ 5.25
========== ==========
Adjusted earnings per share
Basic and diluted earnings per
common share $ 5.26 $ 5.25
Less: After tax litigation settlement
proceeds -- (1.56)
Add: Debt extinguishment fees 1.08 --
---------- ----------
Adjusted earnings per share 6.34 3.69
========== ==========
Weighted average common shares
outstanding:
Basic and diluted shares 20,850,254 20,801,112
========== ==========
NON-GAAP FINANCIAL RECONCILIATION SCHEDULE
Dollars in Thousands (except share and per share data)
Quarter Ended
December 31, 2004
-----------------
AMERCO and Consolidated Entities
Earnings per common share basic and diluted $ 0.88
Nonrecurring litigation proceeds, net of taxes (1.56)
----------------
Loss per common share basic and diluted
before nonrecurring litigation proceeds $ (0.68)
================
Nonrecurring litigation proceeds, net of fees $ 51,341
Income tax expense (18,853)
-----------------
Nonrecurring litigation proceeds, net of taxes $ 32,488
================
Nonrecurring litigation proceeds, net of taxes,
per common share basic and diluted $ 1.56
================
Weighted average shares outstanding:
Basic and diluted 20,813,805
================
Nine Months Ended
AMERCO and Consolidated Entities December 31, 2005
-----------------
Earnings per common share basic and diluted $ 5.26
Nonrecurring refinancing charges, net of taxes 1.08
----------------
Earnings per common share basic and diluted
before nonrecurring refinancing charges $ 6.34
================
Nonrecurring refinancing charges $ (35,627)
Income tax benefit 13,109
----------------
Nonrecurring refinancing charges, net of taxes $ (22,518)
================
Nonrecurring refinancing charges, net of taxes,
per common share basic and diluted $ (1.08)
================
Weighted average shares outstanding:
Basic and diluted 20,850,254
================
Nine Months Ended
AMERCO and Consolidated Entities December 31, 2004
-----------------
Earnings per common share basic and diluted $ 5.25
Nonrecurring litigation proceeds, net of taxes (1.56)
----------------
Earnings per common share basic and diluted
before nonrecurring litigation proceeds $ 3.69
================
Nonrecurring litigation proceeds, net of fees $ 51,341
Income tax expense (18,853)
----------------
Nonrecurring litigation proceeds, net of taxes $ 32,488
================
Nonrecurring litigation proceeds, net of taxes,
per common share basic and diluted $ 1.56
================
Weighted average shares outstanding:
Basic and diluted 20,801,112
================