U-Haul (UHAL) Q4 2026 Earnings Transcript

Image source: The Motley Fool.

DATE

Thursday, May 28, 2026 at 11 a.m. ET

CALL PARTICIPANTS

• Chief Financial Officer — Jason Allen Berg

TAKEAWAYS

• Net Loss -- $128 million for the quarter, widening from a $82 million loss in the prior period.
• Full-Year Net Income -- $83 million, down sharply from $367 million.
• EPS -- Non-voting share loss of $0.65 this quarter versus a $0.41 loss previously.
• Moving & Storage Adjusted EBITDA -- $223 million for the quarter, growing $6 million; full-year $1.646 billion, up $26 million.
• Fleet Depreciation -- Increased to $221 million this quarter from $181 million; full year rose to $879 million from $693 million, with cargo van depreciation highlighted as a primary driver.
• Equipment Rental Revenue -- Up $12 million for the quarter, and $86 million for the year, surpassing 2% annual growth.
• Company Locations and Dealer Expansion -- 55 new company-operated sites added, plus a net gain of 1,400 independent dealers.
• Capital Expenditures -- $2.08 billion spent on rental equipment, a $218 million increase; net new equipment purchases totaled $1.381 billion, with $780 million identified as growth-related spend.
• Storage Revenues -- Rose $16 million or 7% for the quarter; full year up $74 million or 8%.
• Average Revenue Per Occupied Foot -- Improved over 6% for both same store and total portfolio.
• Same Store Occupancy -- Declined 540 basis points to 86.1%; 450 basis points attributed to delinquent room cleanup program.
• Real Estate & Development Investment -- $960 million invested, down $541 million; 66 new storage locations and 5.3 million rentable square feet added.
• Operating Expenses -- Increased $17 million, with personnel costs rising $13 million and maintenance up $1 million; self-insurance liability reserves increased $93 million.
• Cash and Availability -- $1.479 billion at quarter end for the Moving and Storage segment.
• Share Repurchase Authorization -- $350 million approved for UHAL and UHAL.B classes; capital reallocation enabled by reduced forward CapEx growth.
• Guidance on Fleet and Storage Growth -- No truck fleet growth planned; new purchases net of sales expected to decrease by roughly $560 million; growth to focus on U Box containers and toy-hauler trailers at a reduced pace.
• U Box Activity -- Transaction and storage box activity increased; revenue per transaction declined due to shorter moves and intensified competition; company indicated a focus on driving storage penetration in U Box customers.
• Warehouse Optimization -- Consolidation of U Box storage led to larger facilities handling more containers while the number of small-capacity warehouses was reduced.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Elevated Depreciation Pressure -- CFO Berg noted, "Approximately half of the fourth quarter's decline in EPS came from depreciation on the truck fleet," highlighting continued margin impact from elevated fleet costs.
• Same Store Occupancy Decline -- 540 basis-point drop, with delinquency cleanup responsible for 450 basis points, leaving occupancy recovery as an operational challenge.
• Net Tenant Move-Ins Slower -- "Net tenant move ins remain slower than in recent years," pointing to subdued demand despite incremental improvement.
• Continued Headwind from Lower Miles per Transaction -- U-Haul continues to observe year-over-year decreases in miles per transaction, with CFO Berg stating this remains "a little bit of a headwind."

SUMMARY

Management delivered a candid appraisal of recent headwinds, emphasizing ongoing elevated depreciation expense stemming from past fleet investments and a strategic pivot away from further truck fleet growth in the near term. Capital allocation priorities have shifted notably with a newly authorized $350 million share buyback, enabled by decelerating growth capital expenditures and an emphasis on filling existing asset capacity rather than expansion. In self-storage, the company continues to address residual effects from last year’s delinquency cleanup, with current occupancy trailing targets and modest progress on net move-ins. Management highlighted that opportunities remain to boost cross-selling between core business segments, with U Box and storage initiatives representing incremental growth focus amid a more challenging market environment.

• CFO Berg stated, "The rate of change, we will call it the second derivative of fleet depreciation growth, has been slowing," indicating sequential improvement though underlying cost remains elevated.
• Company-end cash and liquidity levels provide flexibility while allowing share repurchases without expected material impact to leverage metrics.
• Leadership reported, "We firmly believe that the investments that we have made in the business over the last several years While they are having near term downside effect on our earnings, they will mature into productive assets. And yield our expected returns," framing near-term operating pressure as a tradeoff for future upside.
• Management cited further dealer network expansion as a strategic lever for future rental revenue growth, with only "a third of the way there" to targeted additions.

INDUSTRY GLOSSARY

• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted to exclude certain one-time or non-core items, providing insight into normalized operating profitability for the rental and storage segment.
• U Box: Portable, containerized moving and storage product offered through U-Haul’s network that enables both moving and on-site storage for customers.
• Toy-hauler trailer: Specialized trailer product designed to transport recreational vehicles, equipment, or small tractors, representing a new line for U-Haul rental services.

Full Conference Call Transcript

Jason Allen Berg: Thank you, Sebastien. Good morning. I am speaking to you today from our offices here in Phoenix. Yesterday, we reported a fourth quarter loss of $128 million compared to a fourth quarter loss of $82 million a year before. Our full year fiscal 2 thousand and 26 earnings were $83 million. Down from $367 million the previous year. In terms of earnings per share, the fourth quarter of this year was a loss of $0.65 per nonvoting share compared to $0.41 per non-voting share fourth quarter of the previous year.

Earnings before interest, taxes, and depreciation, we refer to as adjusted EBITDA, and our moving and storage segment increased $6 million for the quarter to $223 million and for the full year fiscal 2026, adjusted EBITDA increased $26 million to $1.646 billion. Included in our release and the financial supplement is a reconciliation of how you get from GAAP earnings to adjusted EBITDA or vice versa. Approximately half of the fourth quarter's decline in EPS came from depreciation on the truck fleet. Which went from $181 million in the fourth quarter of last year to $221 million this year. For the full fiscal year, it was $879 million compared to $693 million the year before.

We began to materially increase the depreciation rate on our cargo van fleet in the first quarter of fiscal 2026 when we began selling the higher cost 2023 and 2024 model year vans into a resale market that frankly just did not recognize that increased price. Additionally, depreciation has been increasing on box trucks. We grew the box truck fleet by over 14 thousand units if you compare March-- end of March of 2025 to March of 2020. A few positive signals, though, The rate of change, we will call it the second derivative of fleet depreciation growth, has been slowing. In fact, we have seen sequential declines in the last 2 quarters.

For box trucks, the upcoming year of no planned growth will lead to a natural decline in depreciation over the course of the year. Even if we do not shrink the fleet. On the cargo van front, April and May resale results have been steady, albeit that is in relation to units that had a much higher depreciation rate over the 12 months. Also, the step down in what we are paying for model year 2025 units and 2026 units will be beneficial but not likely enough to be the sole solution to the issue.

Looking forward, utilization of the expanded box truck fleet during this summer will inform us of what actions that we should take going into next year. And on the cargo van side, it is going to be the resale market and manufacturer pricing that are going to guide us as to whether we need to extend the holding period next year for those trucks and reduce future purchases. For the fourth quarter, our equipment rental revenue results increased $12 million compared to the same quarter the year before, And for the full year, we finished up $86 million, which is excuse me, just over 2%.

Revenue growth for both our in-town and 1-way markets for both the quarter and the full year increased. In-town growth was more robust. Comparing the added 55 new company operated locations. And we had a net increase of 1.4 thousand independent dealers. Our goal of increasing the number of dealers by several thousand and then productively dispersing equipment to them has been taking shape. April and May revenue has trended in line with what we saw in the fourth quarter. Capital expenditures for new rental equipment in fiscal 2026 were $2.08 billion. That was a $218 million increase compared to the year before.

While proceeds from the sale of retired rental equipment that we sold increased by $48 million to $700 million. That nets out to net equipment purchases of $1.381 billion. I estimate that close to $780 million of the total spend was growth related. Our projections for this coming fiscal year include growth of the U Box container fleet and our new toy-hauler trailer but did not include growth of the truck fleet.

We estimate for next fiscal year a decrease in new purchases net of sales somewhere around $560 million Storage revenues were up $16 million that is a 7% increase for the quarter, and our 12-month results were up 8% or a little over $74 million Average revenue per occupied foot for both our same store and for the non stabilized total portfolio, improved by over 6%. Our average new customer rental rates have increased by about 3% year-over-year and rates for customers leaving are still a couple of percentage points lower than customers moving in. Same store occupancy was down 540 basis points to 86.1%. I continue to highlight the portion that was due to our cleanup of delinquent rooms.

And for this quarter, it was about 450 basis points of that decline. If you recall, we instituted the cleanup program in the second quarter of fiscal 26. Since then, delinquency has not been a problem, but we are still dealing with the year over year comparisons. Net tenant move ins remain slower than in recent years, but we are seeing some incremental improvement. Our strategy of straightforward pricing which includes the 1-year price lock guarantee that Joe announced earlier this year, to strengthen our team's resolve and beginning to resonate with customers.

During fiscal 2026, we invested $960 million in real estate acquisitions along with self-storage and U Box warehouse development. that is a $541 million decrease over fiscal 2025 For the full year, we added 66 locations with storage. totaling 5.3 million net rentable square feet. We have approximately 5.5 million new square feet under development right now across 99 projects and another 6.2 million square feet of potential development behind that in properties that we own but we have not started. To put that into context, last year at this time, those figures were respectively 6.9 million and 8.1 million square feet. My projections have us continuing to see spending on self storage growth decline.

Moving and storage Operating expenses increased $17 million for the fourth quarter compared to the fourth quarter of last year our adjusted EBITDA margin saw a slight improvement with our all in operating margin worsening due to the fleet depreciation that we discussed. Personnel increased $13 million for the quarter. Fleet maintenance and repair was up $1 million. And our self insurance liability decreased by $2 million. Largely due to a rough fourth quarter last year. We have made progress on this front over the course of fiscal 26, we have increased our reserves by about $93 million At the end of March, our cash and availability at moving and storage totaled $1.479 billion A couple last items.

I wanted to highlight that the U Haul Holding Company Board of Directors authorized a $350 million share repurchase plan The plan spans across both our UHAL and UHAL.B share classes. The planned decreases in our growth CapEx this coming year allow us to allocate capital to this program. We firmly believe that the investments that we have made in the business over the last several years While they are having near term downside effect on our earnings, they will mature into productive assets. And yield our expected returns. If you have not visited it yet, although I assume, I guess, everyone has, you are listening to this call on the Internet, visit investors.uhaul.com.

We have relaunched the site tried to make it a little bit easier for people to access information. We would always appreciate any feedback that you have on that. With that, I would like to hand the call back to our operator, John, to begin the question and answer portion of the call.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the number 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speaker phone, please lift the handset before pressing any keys. Our first question comes from the line of Steven Ramsey from Thompson Research Group. Please go ahead.

Analyst (Steven Ramsey): Hi. Good morning. On the U Box revenue per transaction being down I believe, for the for the second consecutive quarter, if I remember correctly. Can you talk about the trends there and how volume is playing out within just overall U-Box Thanks for the question, Steven.

Jason Allen Berg: Actual activity and I will I will define activity as moves, and also boxes in storage. Both of those are up. I would say the boxes and storage is up on a percentage basis a little bit heavier than the actual transaction activity, but both are up. As far as the revenue per transaction issues, we are seeing a couple things. 1 would be the same thing we are seeing on some of the 1 way moves, and that is shorter moves. Right? Shorter moves combined with whatever we have seen on the on the freight side, which for most of the year has been has been down.

And then the last item I would like to highlight would be that you know, competitively, I think the market appears to be a little bit more competitive than, say, it was a year ago. And you know, we are going to be competitive right along with it.

Analyst (Steven Ramsey): Okay. that is helpful, Jason. Thank you. And then the cross usage of moving and storage at around the 50% mark, it is good to see Do you think that is a natural peak on that front? And then when you compare U-Box moves with the 50% level as well?

Jason Allen Berg: Great question. The first 1, I think the I think the 50% is more of a baseline. I think there is I continue to believe that it is 1 of the things that is frustrating, but also it gives you optimism for the future, and that is think there is so much more that we can harvest on cross selling. And so I think I think the 50% is a low part. If you were to flip it and try to analyze how many truck transactions have storage, that number is significantly lower. And I think we have a lot of people within the system that believe that number can be increased.

On the on the U-Box side, yeah, I do not see why we cannot increase the storage penetration there. it is a major goal of ours Our team is on it right now. Part of that is increasing the number of moving transactions. But part of that, which is a unique opportunity for us that the other portable storage providers do not have. Is that we have the ability to convert self storage customers into these containers. Right? So I think there is an opportunity there for us. The folks in our system who are best at that are the ones that have run out of storage space. Right?

They have filled their facilities, and then you know, it become the it they find ways to serve the customers, and U-Box is a fantastic way of getting people into storage.

Analyst (Steven Ramsey): So both of those, I would say, the U Box, we are we are on the early innings of that. Okay. that is excellent. And can you talk about the uptake of toy-hauler trailers in the quarter and more recently, given that your investing more into it this next fiscal year, it sounds like it is going well. And maybe can you elaborate on the diverse usage of the product given it seems to be more nonmoving oriented?

Jason Allen Berg: Yeah. it is the first group of people that we expected to use it were the people that traditionally use our auto transports. But then with larger vehicles, were not able to use it. Now I think what we are seeing is the is the usage scenarios have expanded dramatically. A few months ago, I was up in North Dakota, and our location up there was using them for smaller tractors. Right? And I think we are gonna continue to see that grow. From a CapEx perspective, I think the plan going into this next year is maybe half the spending to maybe 2-thirds of the spending that we did on the initial rollout.

And then we will just we will we will just see where that goes. The only planned growth that we have for next year would be adding U-Box containers and these trailers. At a slower clip than we did this last year.

Analyst (Steven Ramsey): Okay. Great. And last quick 1 for me. I am sure there could be other questions on this on the call, but the buyback authorization can you just describe the eagerness to deploy it?

Jason Allen Berg: Or is it more of a perspective that let's have this ready to go just in case the stock gets low enough Well, we would we think the stock's low enough. We are eager to deploy it. So they officially approved it last week. My team is setting up the trading account. I am working on proposed instructions that I will sit down with Joe on and you know, we have got the corporate resolutions going. Everything you have to do behind the scenes is going. So I do not think this is something that we are going to wait too long on now.

Analyst (Steven Ramsey): it is great to hear and agree with all of that. Thank you. You are welcome.

Operator: Your next question comes from the line of Steven Ralston from Zacks. Your line is now open.

Analyst (Steven Ralston): Good morning. Morning. To me, the big news is the of the share repurchase program. So I am gonna dwell on it a little more. It not only states that the board has determined the stock's price, is cheap, But also, at the present time, it implies that further expansion of the fleet is not in the company's best interest. Given the over fleeting and depreciation implications. It also implies the strength of the company's balance sheet. Could you speak to these and any other nuances about the rationale of the share repurchase program?

Jason Allen Berg: Sure. I appreciate the questions, Steven. On the first front, yes, the board of directors thinks that the stock is trading at a discount today and that there is an opportunity to acquire it. Our view on that really, you know, has not changed too much. What I will say is changed is the availability of capital. And for those who have been around a long time as you have, you know that our first instinct and what we typically do is we wanna reinvest back into the business.

I would say that the pace at which we have grown over the last several years has now afforded us the opportunity today to do this because we have added so much capacity that under normal circumstances, it would take about this much time in order to soak up that with demand. So now we can take a year off at least of some of that growth, and it frees up the capital here without we do not believe it is going to materially affect our leverage levels. We think that there will be a certain amount certainly on the fleet side, a certain amount of deleveraging taking place on that front.

So it gives us that opportunity So look, ideally, at the end of the year, we have fully utilized these assets. We go back to a little bit of growth. But I think where we are at for what we want to accomplish we have the most storage capacity in that we have ever had. So I do not view that as a weakness. I view it as a huge opportunity. And while we are waiting for us to get caught up on filling that up, we are going to go out and do other things that we think are wise allocation of capital. And so we have finally been able to hit this program. And we appreciate everyone's patience.

Analyst (Steven Ralston): Thank you. Now just turning to the tone of business. I noticed in the fourth fiscal quarter, the rate of year over year growth in the self-moving equipment rental revenue line. Improved somewhat over the flattish growth in the third fiscal quarter. Even though the fourth fiscal quarter is seasonally the company's weakest, What were the drivers of that fourth quarter's growth And what do you glean about the future tone of revenues in the self-moving rental segment going forward into fiscal 2 thousand 27.

Jason Allen Berg: Yeah. You know, in the third quarter, we saw kind of a mix of an increase in-town revenue, a decrease in 1-way revenue. Fourth quarter, both managed to increase. And of note, in the fourth quarter, we did see an increase in 1-way transactions. Now I think part of that, there is a little bit of a trade off with revenue per transaction or rate. I think that there was a little bit of a handoff there. But we were able to increase the transactions for the first March of the year, 1-way transactions have kind of been up and down month over month. It was hard to get any sort of trend.

So the fourth quarter was welcome on that front. We are still seeing small declines in miles per transaction. You know, I think I have been saying now for over a year that I expect that to bottom out. The actual mile decreases are getting much smaller. But that continues to be a little bit of a headwind. And that is probably not gonna turn around until you know, consumer confidence gets better. What we have seen through the April and the first couple weeks of May has been growth fairly similar to what we saw in the fourth quarter. So we would we would like to get back to the 4.5%, 5% growth.

The initiative that Joe was pressing on expanding the dealer network we are maybe a third of the way there. And trying to get the equipment out there. So I think some amount of those new dealers are going to be available to help row the boat in the, you know, from Memorial Day to Labor Day here in the busy season. And if that all works out, you know, I think there is more in store for us on this on this revenue line.

Analyst (Steven Ralston): Thank you. And just 1 last question, is just something that occurred to me. Concerning retired rental equipment and the depreciation of 1 of the factors has been that the rate of depreciation has been underestimated. But it occurs to me that another factor could be that the realized prices from selling off the retired fleet dropped. Since these are older trucks, you held them longer than you expected to, and so the use was overextended. And the normal replacement cycle is stretched out, How much do you think the lower realized pricing account for the I guess, pressure on profitability versus the underestimated depreciation.

Jason Allen Berg: that is it. Mentioned more often. The dynamic that you referenced is true. I just do not think it is applicable to this last 12 months. As it has been in other years. We are we are back to about a 12-month replacement cycle for our cargo van fleet. So last year, we increased the amount that we spent on cargo vans without growing the fleet because we sold more. And the resale prices were fairly resilient over last year. As far as there was not a big decrease in average price per unit. I think in many cases, we may have seen increases for some models.

The bigger issue was it was not enough to cover the increased price that we paid for those units. To, you know, 2 to 3 years ago. And what we are seeing so far this year is pricing improving a little bit. We had a couple good weeks. In April, a little bit of a step back. So I am not going to say that there is a trend yet. But we are selling newer units. And it is looking better. But we are not ready to declare victory because that is still comparing it at a pretty elevated depreciation rate. So we need a couple things to happen. 1, we need to buy the units cheaper.

2, we need to sell them for more. And then 3, we need to that will allow us to do 3, which is reduce the monthly depreciation on those so that we can get back to making some money on the actual rentals. And you know, a couple of those things are falling into place. The prices for model year 2026 have come down more than they came down in 2025. But I mentioned in the prepared remarks is that on that portion of the fleet, if we do not see-- we are going to compare the resale market this year versus what the manufacturers wanna sell those for last year.

And now we have built in for next year the optionality to not have to buy. Right? We can sit out a year of buying vans or buying as many as we would normally buy. If we just do not feel like the resale market is there, in relation to what they wanna charge us for new trucks. Sorry. I went on a little long there.

Analyst (Steven Ralston): No. No. I appreciate it. And thank you for answering my questions.

Jason Allen Berg: You are welcome.

Operator: Your next question comes from the line of Andy Liu from Wolfe Research. Please go ahead.

Analyst (Andy Liu): Hey. Good morning, and thanks so much for taking the question. We covered good ground here, so I will start on the storage side. So since you guys, you know, start the initiative to address the delinquencies here, Seems like there is still some amount that you are working through in the quarter. So that is on the move out side. But on the move in side, I see, you know, kind of industry headlines as well as some of the pure play storage REITs kinda calling out that the spring leasing season has been gaining momentum.

So I just wanna get some color on what your thoughts are around how much of the evictions on the delinquency side that you have left here and when you can get back to kinda gaining occupancy from the momentum that we are seeing.

Jason Allen Berg: Yeah. The delinquency issue now is really idiosyncratic issue to specific locations. System wide, we are back to the system expectation, the system standard. So we went we took all of our pain in 1 quarter cleaned everyone out, had a little bit of an amnesty program for folks that were letting that go on. And then now we are we are we are we are on program. So if you know, I still see individual locations that are running higher than they should But system wide, our percentages are in line with our expectations. On the rent up period, it is it is better year over year.

But to give you a sense, I am talking about you know, a few thousand rooms that the pace has improved a few thousand rooms. Year over year. I am not talking about, you know, 10 thousand or 20 thousand increase in pace. So we are we are still filling rooms if you look at the locations that are in rent up right now, We are probably depending upon the cohort, you know, either year 1, year 2, or year 3, we are we are somewhere between 5 to maybe 10 percentage occupancy points behind what we would normally expect. So we still have some ground to make up.

Analyst (Andy Liu): Got it. that is very helpful. And I think 1 thing that, you know, wanted to take a moment to appreciate is really, you know, right, as you move out these delinquencies, you know, I see it as the as a headwind of physical occupancy. that is recorded. But if they were not paying to begin with, right, I guess, a from an economic standpoint, know, you move someone out who was not paying to begin with does not really impact as much.

So I wanna get wanna, you know, get a sense of, you know, how I should think about it know, as I look at you know, the physical occupancy number that I report versus kinda maybe, like, an economic occupancy number. Because if you are moving out, people are not paying and you are seeing improvement on the move in side I guess, economically, it would just shift it sheds a better picture just the physical occupancy side. Right?

Jason Allen Berg: Oh, it is it is for customers that want to rent storage from us, it is fantastic. They now have a whole bunch more rooms I forget the exact number, but 35 thousand more units available to them to rent. So, yeah, some of our folks were fooling themselves looking at physical occupancy versus economic occupancy. We are we have now made sure that everyone is on what our program was economic occupancy all along. And so I think we are I think we are in a much better spot with people not trying to fool themselves with the physical occupancy.

Analyst (Andy Liu): Yeah for sure. For sure. And then just 1 last 1 on kinda on the on the U-Box. I noticed that, you guys report you know, quarterly, the number of U-Box co-locations you have. I think it is been going up every quarter. But I look in that I look for this quarter, it seems to be down. So I am curious if there is anything interesting of note there.

Jason Allen Berg: I so appreciate that you are going through our investor supplement. And looking at it that closely. Thank you. Yeah. Actually, it is a good question, and it is actually a sign of progress, and I will explain why. So I will break apart that number which is our warehouse count versus what the customer sees. So the U Box availability for our customers is still near ubiquitous across all company operated locations. They can pretty much get a U Box any company location, pick up and drop off. What we have been doing is we have been consolidating warehouse space.

So when we first got into this business, we were kinda trying to find anywhere we could to store the these containers. As you look at our supplements, you can see these new warehouses that we are building. You know, they are storing 1 thousand to maybe 2,000 containers. So what is happened is from I will go from March of last year to March of this year. We have added 49 warehouses that have more than a 500-box capacity.

And then at the same time, we have reduced the number of warehouses that have less than a 100-box capacity by, say, 160, So it is not that we are not serving any markets or pulling back. it is that we are trying to become a little bit more efficient with the storing and the shipping of these containers. We have increased over that same time frame I mentioned the number of containers that we can store inside warehouses has increased 53 thousand maybe 52 thousand. So that is the story behind that number.

Analyst (Andy Liu): Okay. Got it. No. that is super helpful. Appreciate it. Thank you much for your time.

Jason Allen Berg: For the question. You are welcome.

Operator: Your next question comes from the line of Jeffrey Kauffman from Citizens Bank.

Analyst (Jeffrey Kauffman): Good morning. Just a quick just a quick question. I was looking at the supplement, and you had a terrific slide in there talking about how, you know, jeez, if we could just get the occupancy up in storage, here's what can happen to, you know, operating profits. And I think the point here is you do not really need the market so much to improve as just kind of get back where you wanna be in some of these businesses. Can you talk about kind of the core businesses and how tough is it to get 100 basis points of occupancy back?

You were talking about being 500 basis points to 1 thousand basis points off And then on the, moving and storage side, you know, we know a lot of this issue is the depreciation and the losses on sale. It looks like you are gonna anniversary the negative effect of the losses in this next quarter, that is different than generating a gain on sale. I understand that. But maybe talk about how far margins are off in that business once you get to a more normalized level in the market on depreciation levels and gainloss on sale as well.

Jason Allen Berg: Great questions. I am you are going to have to refresh my memory on some of this as I am sure I am going to forget 1 of them. The first 1 was on storage revenue. I think today, just a rough rule of thumb is for every 1% increase in occupied rooms for a 12-month period, it is just under a $14 million increase in revenue. So you know, our year over year increase in occupied rooms excluding the effect of this whole delinquency issue. Has been I think, around 25 to plus 25 thousand to 27 thousand rooms, I think.

So, you know, at that rate, it is going to take us a while I should have the exact number, but I do not. What I will say is we certainly should be capable of doubling that pace. You know? Plus 50 thousand rooms. And on the margin question, You know, if nothing else to get that much better, we would at least look better next year because from a comparable standpoint, you know, it has not been a great year in fiscal 26. So on the you know, I mentioned the delinquency issue.

We are going to lap that So then the occupancy year over year occupancy numbers will look comparable, and we will not have to try to explain that part. On the depreciation, we are on track to see the fleet depreciation decrease the second half of this year. On the disposal on equipment, you know, I really do not wanna prognosticate on whether or we are going to get back to a game this year. But what I will say is everything is set up for us to do better than we did last year.

And then when you combine the 2, depreciation plus the gain, we do in the financial statements, that should be a headwind to a tailwind going into next year. On the repair and maintenance side, of the fleet of the equation, the fleet is in good shape. You know, we certainly are in the position where we can prune some of the oldest part of the fleet that would have the biggest effect on the maintenance number next year. Or the year that we are in now. Coming up. And on liability costs, we have got a lot of people here focused on trying to manage that number.

From our claims units to our general counsel team everyone is focused on making sure that not only do we seize the growth in that, but we also start to try to reduce it. And we finally got back to the point where we think we are we are well reserved on that front. So I would be surprised if I saw next year get much worse outside of maybe an inflation number. So our EBITDA margin for last year for fiscal 26 was I think, 29%. that is still probably 350 basis points off, and that is not even affected by depreciation. So we still have ways to go, the majority of that being revenue. Okay.

Operator: Thank you. Your next question comes from the line of James Wilen from Wilen Management. Please go ahead.

Analyst (James Wilen): Jason, I want to applaud the shift in the capital allocation strategy I hope it is not a short term thing. I mean, Joe has always said that the key measure for the truck rental business is fleet utilization. And if we can reduce that denominator, that will help that there. And also, if we can slow down the very fast build out of self storage for a while, starts at 0% occupancy and obviously does not make any money for a few years, that would help the overall number. So I hope it is not just a short term thing and, you know, like, it was COVID induced and then we will go back to overspending for a while.

Appreciate the feedback. Definitely, I would wonder if we could revisit the idea of selling advertising on the side panels of our truck. We have a couple of hundred thousand vehicles. And, you know, there is a lot of other companies out there. I mean, you can see the Waymo cars going around, and they have ads on their fleet. Which teams put the little logo for a million dollars a year on the jerseys. We have a couple of hundred thousand trucks out there. And if we could just sell the side panels, I would think we could for $100 a month, we could rent them to a Coca Cola, McDonald's, a Wendy's a 7-11.

And if you wrap those numbers around the size of our truck fleet, we are looking at incremental profits of around a half billion dollars a year. And, you know, I would hope we could relook at it. I mean, anytime I would see a billion dollars laying in the street, I think the thing is to go down and pick it up.

Jason Allen Berg: James, it is a it is an interesting idea that, obviously, we have thought about in the past, and we have tried to weigh the pros and the cons of that. Our view on that is that it would be a gain likely in the short term. Our challenge now is customer awareness of our product offerings. And we have excellent awareness of the rental equipment because people see it everywhere, and it is clear brand imaging. What is less clear to customers is self storage, moving supplies, U Box, and how all of those can be used together.

And I would say before we introduce something that could potentially confuse customers, irritate local communities and their zoning boards, we think we are trying to find ways to use the equipment as in a better way to inform our customers of every other product offering that we have.

Analyst (James Wilen): So Okay. I see I see that on the backs of the trucks, but on the sides, it still says Cape Cod or visit wherever, and it is beautiful for the local communities, but we are spending millions of dollars a year just putting details, not promoting our product, but promoting some getting in this country.

Jason Allen Berg: Yeah. We have a limited very limited program where trucks that are transitioning into the for sale fleet are used as advertisements. Right? Small businesses typically can use them out in front of their business as a billboard and storage inside. Right? The And that program has had limited success but we have we have at least attempted to go down that path and look into it. Now that is full imaging. that is not partial imaging. I would be a little concerned about the confusion that it would cause customers and the potential issues that we would have turning these into rolling billboards for everyone else and trying to explain that.

Analyst (James Wilen): I like rolling billboards. I think it is a nice profit business for us, but that is your decision. Okay. Appreciate the switching capital allocation. I think it is a wonderful move for the company. Thanks, Jason.

Jason Allen Berg: Thanks, James.

Operator: Are no further questions at this time. I will now turn the call over to management team. Please continue.

Jason Allen Berg: Well, I appreciate everyone joining us for the call. I hope you enjoy the new website, and the investor supplement, and we will speak to you again on August 6 for our first quarter earnings call. Thank you very much.

Operator: Ladies and gentlemen, this concludes today's conference call. You for your participation. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool recommends U-Haul. The Motley Fool has a disclosure policy.