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UHAL: Not expected to run out of cash! Fourth quarter numbers were much better than expected. Revenue is improving from the low in April 2020 and the relaxed restrictions should boost revenue from these levels. U-Box continues to grow and is profitable.


By Ian Gilson, PhD, CFA



AMERCO (NASDAQ:UHAL) reported its fourth quarter and annual results for fiscal 2020 (ending on March 31, 2020) on May 27, 2020 with a follow-up on May 28, 2020.

Management stated that the company “was not going to run out of cash.”

The company discussed the impact on revenue for April and May 2020 as compared to the same months in 2019. April was down 30% year over year and May was down 15%. These are better numbers than the auto rental companies that are heavily biased by airport driven passenger counts.

The 4Q20 numbers were much better than we had expected, mainly because March 2020 was less affected by the COVID-19 virus pandemic than anticipated. Truck revenue was $518 million as compared to our estimate of $500 million and $529 million a year ago.

Overall, excluding an income tax benefit, the 4Q20 loss was $1.21 a share as compared to a profit of $0.04 a share last year.

Included in the 4Q20 is a $146 million tax credit from the application of the CARES Act regarding the tax carry-back of 5 years of federal tax payments. The company has filed for this with the US tax department and the usual time between filing and payment is 90 days. Applying the net operating loss carryback plus changes in depreciation methods should result in cash refunds of over $380 million.

Overall cash and credit availability at the end of April was over $400 million and AMERCO has borrowed $200 million against this tax benefit. Our forecasts for 2021 and 2022 assume a profit for both fiscal years, albeit at a much lower lever than 2018 and 2019. Given the uncertainties caused by COVID-19, the potential of a second wave of infection in 2020 and the possible lack of a widespread use of a vaccine until 2020 our estimates have a lower rate of confidence than usual.

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