Amerco (NASDAQ:UHAL) Q2 2020 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 10:00 am ET


Amerco (NASDAQ:UHAL) Q2 2020 Earnings Conference Call - Final Transcript


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Q & A

We will now begin the question-and-answer session. [Operator Instructions] The first question is from George Godfrey with C.L. King. Please go ahead.

Sebastien Reyes

[Speech Overlap] George?

George Godfrey

Hey, there. Joe, I was wondering if you could expand on your comments about -- I'm sure you know exactly where I'm going, the number of units and the storage building out. And just thinking over past calls about your desire to increase that capacity and now you're not sure that time will fill that up. Have you done more analysis proprietary for yourself in the industry that suggest that perhaps we had an overcapacity state that isn't going to be corrected anytime soon?

I just want to get understanding of what your comments imply. Thanks.

Edward J. Shoen

No, I don't think we had an overcapacity because there is no such thing as a market. That's the problem. So, but in the past people have added units and while it's always kind of surprised me -- I've been in this business a while, it's always surprised me but yet, demand is always kind of caught up to it after five years to six years. There is so much going on right now. Every estimate that I see of new construction I believe is below. It's actually occurring by as much as 50%.

Now that seems like an awfully big air but that's my opinion, okay? We don't have good data on supply increases by year that are really very accurate. But, of course, our job is to make sure we don't put product in those markets, and pretty much we've avoided that so I don't think we're particularly vulnerable to that. In other words, putting something that's going to be a barking dog indefinitely, but we'll -- out of as much as we've got going, we'll end up with some short-term barking dogs. That's for sure.

The other thing is our product is a lot different -- most of our products is a lot different than what you see in the market out there, George, because we do this in conjunction with the truck and trailer operations. And that's just a little bit different, we get a little -- quite a little bit different customer than most of our competitors. Again, it's hard to generalize because there's so many subtleties, but we have -- we kind of cater mostly to our U-Haul customers and not just to customers in general. And that gives us a tiny bit of edge if we do a good job. So, I'm not concerned that we have stuff out there, but it's -- I see what you see, and you see tremendous amount of new supply coming online and it's -- a lot of it is pretty good product.

The other thing when you look at supply is that there is various types of product out there. So, a general statement of how many units or how many square foot there in a market doesn't really tell the story, because your standard drive