U-Haul Holding Company (UHAL) Q3 2019 Earnings Report, Transcript and Summary

Good day and welcome to the Amerco Third Quarter Fiscal 2019 Investor Call and Webcast. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Sebastien Reyes. Please go ahead.

Good morning and thank you for joining us today. Welcome to the Amerco third quarter fiscal 2019 investor call. Before we begin, I would 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 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a 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, 2018 which is on file with the U.S. Securities and Exchange Commission. I will now turn the call over to Joe Shoen, Chairman of AMERCO.

Thanks, Sebastien. Good morning to everyone. We remain in very competitive businesses, our truck rental and remarketing, our self-storage and our moving suppliers markets. Lots of well-financed people look at these markets and think this is an easy market and decide to compete and we have to deal with that. The truck rental particularly is more competitive than many people comprehend, but I believe there remains room for profitable growth. Our truck remarketing is just beginning a new model cycle. We finished the current remarketing cycle and did a little bit better than last year, but we are still short of where I would like to see us and I believe we are on the path to improve. Self-storage continues to reflect a flood of additional product. We of course are part of this flood. This likely will result in some near-term sluggishness in rental. Of course, in 2 or 3 years, we will all be able to look back and know how this turns out. I am very positive on the long-term strength of the self-storage market for well-positioned, well-run good quality product. I have got to focus on our retail moving and supply programs currently in process. I believe we have room for continued growth there just a little unhappy with some of the growth in the last 12 months. With that, I will turn it over to Jason to try to walk us through the numbers.

Thanks, Joe. Throughout my presentation this morning, all of my comparisons are going to be for the third quarter of this year compared to the third quarter of fiscal 2018 unless otherwise noted. Yesterday, we reported third quarter earnings of $4.01 per share compared to $27 per share before adjustments. I think a fair way of looking at our quarterly results is to provide some adjustments for events and transactions that occur infrequently. There were two unique events in the results for the third quarter of last year. One was the gain on the sale of a portion of our Chelsea, New York location. The Chelsea gain accounts for $7.34 per share of last year’s earnings. The other event was the Tax Reform Act, which re-measured our deferred tax liabilities. This accounted for $17.32 per share of our earnings last year. The effective federal income tax rate for the third quarter of fiscal 2019 benefited from the Tax Reform Act of the third quarter of last year and did not fully recognize the new rate. We had a blended rate. Had this year’s rate been effective for the third quarter of last year, it would have increased prior year earnings by $0.90 per share. So excluding these three items from the calculation, earnings per share for the third quarter of last year were $3.24 per share compared to this year’s $4.01 per share. Equipment rental revenues increased nearly 9% or about $51 million. During November and December, we experienced increased corporate account activity or what many outside the company might refer to as last mile, which accounted for about a third of the improvement. Please keep in mind our ongoing concerns with this type of business, and that is what is the condition of the equipment going to be when it’s returned. It is possible that we will see some trailing cost associated with these rentals emerge in the next few quarters in the form of repair expense. Aside from that, we saw continued improvement in transactions for both the one way and in-town markets, along with better revenue per transaction. Compared to last year at this time, we have increased the number of trucks, trailers and towing devices in the fleet and we have more independent dealers and company locations. While there has been severe weather throughout parts of the United States and Canada in January, we are still showing revenue increases for our equipment rental business. CapEx on new rental trucks and trailers was $882 million for the first 9 months of this year, that’s compared to $788 million for the first 9 months of last year. Meanwhile, proceeds from the sales of retired equipment also increased to $559 million compared to $389 million the year before. Regarding truck sales, gains from the disposal of rental equipment were down over $3 million for the quarter, but were still up nearly $15 million for the 9 months. Sales volume was down for the quarter compared to last year, but we did see some nominal improvement in sales proceeds per truck. Storage revenues were up $11 million, that’s just under 14%. Average monthly occupancy throughout the third quarter of this year for the entire portfolio was 68%. Looking just at our occupied room count as of December 31, we had an increase of 31,200 rooms compared to the same time last year. If you look at the same statistic for December 31, 2017 last year, that number was 20,600 rooms. So, we are increasing the pace of renting new rooms. We are continuing to see an improvement in our underlying revenue per square foot as well from increasing rates. Our real estate related CapEx for the first 9 months of this year was $639 million compared to $400 million last year. From January 1, 2018 to December 31, 2018, we added just over 4.9 million net rentable square feet to the storage portfolio, about 1.1 million of that came online during the third quarter. Operating earnings at the moving and storage segment, excluding the net gains of the disposal of real estate last year, increased $27 million to $120 million for the quarter. I would like to touch on a few of the more significant items. Fleet maintenance and repair declined $10 million during the quarter. To put that in perspective last year, in this call, I was reporting a $32 million increase in repair and maintenance, primarily associated with the cargo, van and pickup fleet. While we feel we are continuing to make progress on this front nearly all of the improvement for this quarter came from a reduction in the volume of the number of units being prepped for sale. We continue to work on lowering the cost incurred per truck. Depreciation and lease expense associated with the rental fleet decreased $2 million, while depreciation on all other assets, primarily storage location assets increased by about $5 million. The reduction in fleet depreciation maybe short lived as we are beginning production on more of our 26 foot trucks in the fourth quarter. Property taxes, building maintenance and utilities are three of the larger non-personnel expense items associated with new properties that we have been buying. These costs were up about $16 million for the quarter. Properties purchased just over the last 12 months accounted for close to a third of this increase. Some additional operating expenses that increased during the quarter included shipping and fuel costs associated with the delivery of our U-Boxes and legal fees and some litigation accruals. Personnel expense, while up over last year, was in line with revenue improvements. In December, we declared a $0.50 per share of cash dividend that we paid in January. As of December 31, 2018, cash and availability from existing loan facilities that are moving to storage segment totaled $980 million. During the quarter, we entered into and drew down on two additional bank revolvers totaling $150 million and several other real estate loans totaling approximately $214 million. In January, we closed on the purchase of 13 properties from Sears Holding for a total purchase price of $62 million. With that, I would like to hand the call back to Allison, our operator, to begin the question-and-answer portion of the call.

Thank you, sir. [Operator Instructions]

Allison, we have a few questions that came in before the call from Jamie Wilen. I will go ahead and ask those now. The first question is, in the moving and storage business, once we take out all the non-recurring items, what are operating profits this year versus this quarter last year? Have we been able to obtain any operating leverage on the 9% increase in revenues? Is the outlook for revenue growth to continue at or near this pace in the future?

Sebastien, I will take that. This is Jason. So, operating earnings for the third quarter were $120 million compared to $93 million. So, we did see an improvement. Excluding the bump from the corporate account business or the last mile business, we were closer to a 6% increase on equipment rental revenue for the quarter, which is closer to what we have been running this year. On our big three operating expenses, which are personnel, repair and liability costs, we are making improvement. For personnel, I would say that the third quarter as a percent of revenues stacked up favorably to third quarters that we have seen in the past. On a trailing 12 month basis, we are still probably about 150, 200 basis points off of our peak operating margin in fiscal ‘14 and ‘15. The new properties are continuing to put downward pressure on the margin in relation to where we were at the peak. But I feel like the effect of those is beginning to lessen. However, that development is going to be an obstacle for us getting back to where we were at least for the next couple of years.

The second question we have is we sold fewer rental trucks in the quarter but at higher prices, would you expect to sell more in the fourth quarter and how is pricing in the used truck market currently?

I will start with this one. It’s Jason again. The fourth quarter is typically our lightest quarter for truck sales. The fourth quarter of last year was a bit heavier than most. It was still the lightest of the fourth quarters last year, but I would not expect us to sell many more trucks than we did during the fourth quarter of last year.

In the self-storage business, when we take out locations that are less than 3 years old and still in the ramp up stage, what are occupancy rates versus last year?

So if I look at locations that were open more than 3 years, last year at this time, then I take that same group of properties, which is a little over 700 properties and look at the occupancy this year, the average occupancy for those locations last year was about 82.5%, this year, just under 84% and the median for those last year was 89.6% and we are just under 91% this year. So on either measurement, our occupancy on that basis has improved close to 1.5 points.

We have added nearly 5 million net rentable square feet in the last year, which takes several years to become a profit contributor. Do you think it’s prudent to continue to devote so much capital to these projects that will take so long to add to our bottom line? Would shareholders be better served by having a regular quarterly dividend and also devoting $100 million annually to a share buyback program as our stock price does not nearly reflect the underlying asset values of U-Haul?

I will take that, Sebastien. The simple answer will be, no. Of these projects we are bringing on, some percentage of them are what I would consider strategic with the U-Haul organization. There are also self-storage, but they are strategic to us for a variety of specifics. And just overall in the storage market, just a little bit of a slugfest to be positioned in the market. I mean, of course, we are in that slugfest. So I think that the over a period of years, we are all going to be very happy to have this business. We are very happy with those that we got in prior years [indiscernible].

The last question I have from Jamie is we have purchased a significant number of former Sears and Kmart locations for conversion to self-storage facilities. Are we able to buy these locations at terrific prices so they have much more favorable return? It seems like many maybe white elephants that we can pickup very cheaply since they are abandoned retail site with very little on the way of competition for these locations.

Of course, we are only getting facilities after their value as refill real estate has been determined to be poor by the market. The market felt they were good retail locations. Of course, they priced us out. We think we are making good move. We think so. So obviously, we are going ahead with it now, but that’s about right up at this point. There is no thought of tremendous volume with that unless something changes with the Sears Kmart reorganization which of course is anybody’s bet.

Allison, we will hand the call back to you if there is any other questions from callers.

Certainly and thank you, sir. At this time, we have a question from George Godfrey of C.L. King. Please go ahead.

Thank you and good morning. Congratulations on the quarter. Wanted to ask about in the self-storage, the pipeline in under contract square footage, I am looking at the investor presentation back from August and pipeline storage, storage that was in the pipeline was about 11 million square feet and under contract was about 6 million. Where does that stand today?

I will say right now we have – this is Jason, we have 173 active projects. I don’t have that slide directly in front of me, but I think I broke that out into parts. So I would say that the number of square feet currently being worked on is about 9.4 million. So I think that number increased since we last spoke. And I would say the in-escrow portion of that has declined. I don’t have the square footage of that currently, but I think we are down to about 75 properties in escrow. I think we have another 75 or 80 properties that are still in the early entitlement phases or not yet what I would call an active project, but we do own them.

Okay. So if I look at the – I am looking at the square footage and I heard – so 6 million up to 9.4 million so the under contract has gone up and it sounds like the pipeline would have come down. Do you anticipate that number, the pipeline number, going up from an 11 million to 12 million square footage maybe to 14 million or 16 million over the next year or two or is 11 million to 12 million the ideal pipeline size on a given period?

This is Joe. There is no ideal size. And what really is going to determine is how well we do on rent up and whether we can make this self funding. So, if it’s not then we will have to scale this back a little bit, this is more – this is a bigger pipeline than we historically have maintained and we are maybe – want to count it 14 or 18 months into this level. So I don’t want to make a prediction. I mean, I am prepared to slow it down if it looks like it has to slow down, but where there is opportunity, I don’t want to be – the company be a wallflower.

Yes, agreed. And that makes sense to me particularly if you can get a good price on the facility at a mall or a piece of land that you are looking at. So I definitely get the idea that you want to be opportunistic both based on Joe on your comments that supply is coming on could have a sluggish lease or rent up facility would intuitively make sense to me that, that pipeline number wouldn’t go higher in the short-term, unless there was a really advantageous acquisition. Is that fair?

I think that’s fair to say. And again, it’s our job to perform. And so whether the market is good or bad we got a good performance and so I am determined to get performance. But nevertheless, it’s a big marketplace and there is just so much supply and I don’t have a good handle on what the supply is. There is people who tried to analyze that, but it’s rolling on and I am sure you can see it in your community. So we are going to have to be a little bit wary on that.

Understood. And then my last question is if I look at the operating expenses just in Q3 and I am looking at this year, it came in by my numbers, 52%, last year was 52%. And then if I go back to ‘17 and ‘16, it was 49% and 48%. Is the 52% on revenue on operating expense is a high watermark and we should expect that number to trend down or worst case scenario just stay here at a 52% level in Q3?

George, this is Jason. A lot of what’s been happening there and it depends how you take it with depreciation or without depreciation. So I will take it as just operating expenses as a percent of revenue. I think the last few quarters we started to see some year-over-year improvement outside of repair and maintenance. So, our big three expenses: personnel, repair and maintenance and then liability costs, I think the big question still is the direction of the repair and maintenance number. The personnel number has been reasonably positive compared to previous years. I think we might see that number go up in the fourth quarter. As these development properties begin to cover their own costs, I think we will see the operating margin improve again, but I think where we are at right now is it’s probably not going to get worse, but I think we have several years to go before we get back to where we were.

Understood. And I am sorry just had one more question you mentioned that you are getting higher proceeds on the truck sales and that fleet and maintenance was down principally on a volume basis. So to get the higher proceeds, are these trucks coming back to you from renters in better condition requiring less repairs so that the proceeds are higher or are they trucks that aren’t as old, what is exactly leading to the higher proceeds per truck? Thank you.

Higher proceeds per truck, is that we spent money on repairing them. And this cycle as I mentioned is just about done, it would start a new cycle. We are actually trying to introduce trucks now. We will start selling them in March and we will have to see how the repair numbers come in on that. I wish I could tell you that I have a real positive sense that repair is down, but my information is largely anecdotal. So, we run through 5,000 or 6,000 trucks to really see what the numbers really do come in at. I am not going to commit. There is still room to improve there I guess would be what I would say. I think we are still getting more damage than it’s reasonable. These are – when I say damage, these are decrease in the bumper door thing but just kind of road rash type damage and in the markets where these pickups are sold, they need to be real clean or they just don’t sell. So that’s our opportunity. We need to spend the money is the reasonable trade-off to liquidity not as clear the trade offered price. Does that make sense?

Yes, it does. Thank you, Joe and Jason.

Our next question today will come from Ian Gilson of Zacks Investment Research. Please go ahead.

Good morning, gentlemen. Congratulations on the increase in revenue. 6% is still pretty good. So basically, you were running at that level of gains during the second half of last year, when we look at this corporate group is that rate of gain sustainable or basically is it just due to a high Christmas retail online delivery profit?

I think the 6% really is sustainable outside of that business. Ian, this is Joe speaking. There is a lot of trade-offs on that business and I am not as captivated by it as some people in the organization. So, I think there is – well, I know there is more opportunity. As you know, our overall ability to have the fleet positioned where the market is active is really the key to our profitability and that’s kind of an amorphous or like the blob, you have to just – it’s not an exact science, but we are working on that and there is – I don’t think we are as good with our distribution as we have been at some times in our company. So I am a little critical of our people in distribution right now. And of course, they are trying to position things better. And as we continue to get an improved match up there, I think there is at least 6% of volume out there. The question is do we really match up and get it, day-in, day-out. But I think there is reasonable chance to look good.

How about that 3% from the corporate business, is that rate of growth sustainable?

Well, Ian, they have got purchasing agents. You can just figure this and they are all well-funded people. The day they don’t want to trade with us, they are going to just buy their own trucks and move on and they have done a lot of that and they are seeing explosive growth. So I think you have to look at there were a marginal provider for them. Does that make sense? They are only using us for their unpredictable or unsustainable volume. And so as they get more predictability and they do a better job internally, they will do less business with us. That’s just how this is going to work. We are not some smoking low cost provider and I am not going to pretend to be, they are a seasonal use, but the time that I have other customers will also pay me money. So, I am not wanting to get into too big of a dance with these people, because the day they decide to fleet up and use their own equipment, they just won’t appear at our door. And that’s just how that goes. So it’s good business. We are making a little bit of money on it and we are trying to modulate it. And I think we did little better this year than we did last year. And assuming they continue to see the explosive growth that they seem to be seeing, they will probably be back next year and want to try to be what kind of a deal they can cut with us.

And Ian, this is Jason. Just to clarify, the majority of this business really does just take place November, December and to a much lesser extent, January. So, it’s not something that is at this volume throughout the year.

Okay. So, basically, you are sort of a peak shaving mechanism for the parcel company?

Exactly, exactly. As they better understand their situation, I would figure they got a crew of analysts trying to figure out how not to do business with us basically.

Okay. A question for Jason, on this 2018-12, that’s just a review, correct, there is no impact on revenue?

That’s correct. We went through all of the revenues and there is some – a whole lot of paperwork and analysis to what’s going on, but it had very minimal effect on what we were doing as far as the amounts presented.

Okay. So it’s not a dramatic change in the way that they are looking at the accounting?

On the revenue standard?

Yes.

Yes. For us, unlike other companies, a lot of software companies or companies that had multiple deliverables over time, our piece is much more straightforward and I don’t want to minimize it at all. Our accounting team did a fantastic job of going through. There is a lot of work involved with that process. But at the end of the day, it resulted in very little change to what’s going on. Right now, they are focused on the next big accounting piece, which is the change in the lease accounting, which will change the geography of our balance sheet a bit as we have to move some things on balance sheet and change the way that we report on leases. But at the end of the day, the net effect to earnings or equity shouldn’t be dramatic at all.

Ian, as you know, we have always presented ourselves as an EBITDA or EBITDAR performer and I think that what Jason is saying you and I have lived through changes in how to account for leasing before. It’s an expense however you account for it. It’s an expense. And an expense doesn’t vary much by how you account for it. So we kind of encouraged people to look at this with an EBITDA or EBITDAR and then that way, if the accounting professionals decide it’s done on a different presentation, no big deals.

Okay. The choice between leasing and buying, you had a lot of cash at the end of the third quarter, but that seems to be the peak quarter in cash generation over the years. If interest rates increase, are you likely to keep that lease line low and continue to buy? And within that vein, Joe mentioned a new purchase cycle, new model cycle and his line and my connection are not too good, would you elaborate on that?

Sure. I will take that and I will let Jason have the first part of the question. We will take a big group of vans and pickups every year and we have just pretty much finished our sales and the new trucks are starting to come in. And then about 3 weeks later, they will start to appear as sales income, the outgoing truck. So, that’s a normal thing we do every year. We are kind of at the low point right in here which is kind of between a slack/tight or wherever it is right in between the new trucks coming in and then the trucks they replaced in going out. So we will see if that cycle goes through. It will be very instructive on what our damaged expense part of our repair and maintenance comes in at. Hopefully, it comes in lower. You want to address the rent versus buy, Jason?

Sure. For – the leases that we are doing today are almost exclusively on balance sheet, so its purchases, the decision to go whether a bank loan versus a capital lease is largely up to the lender and what works best for them and what gets us the lowest interest rate. So you mentioned rising interest rate, but we haven’t seen any large swing in the cost of funds for our real estate loans, which are longer term loan, the fleet loans which are shorter term and are benchmarked off of shorter term benchmarks. With the increase in short-term rates, we have seen average fleet borrowing costs come up a bit, but we have been able to reduce spread slightly in order to keep that cost very manageable and we are still at historic lows. The large cash balance at the end of the quarter I mentioned that we did fund several real estate loans and revolvers in anticipation of the acquisition from Sears and then also some additional real estate spending. So, the large cash balance was largely earmarked for future development.

Okay. And Joe, could you repeat your comment upon the impact of the weather in the first quarter in January?

Okay. I don’t remember making a comment, but of course the weather always stink when – this time of year and which we get stinks in or which month it stinks in, we don’t know. And this last cold snap of course hurt a little bit of business. We actually had some stores I think Wednesday of that week, one day, it would not even open. It was just wasn’t – we didn’t bring our people in. So that will have some modest impact, but I think it’s no different than any winter, it will kind of work itself out in the bigger number, Ian.

Ian, this is Jason. I had made the comment just in relation to our January equipment rental results and the increase looked a lot like what we have seen the previous 9 months.

Okay, fine. Thank you.

Our next question will come from Craig Inman of Artisan Partners. Please go ahead.

Hey, guys. One of the things I was curious about on the self-storage we have gone from ground up for a few years now and what have you all learned over this time period of the development? Anything you would do differently or anything you wish you hadn’t done, I guess?

Well, I wish I bought more completed storage. It’s just fraught with delay, not to be believed delay, but they are essentially all some quasi regulation cleared out, because they want to debate what color to paint the building and good golly, let’s move on. So all this has told me is buying is better than building, but nevertheless, we are in certain markets and everything you just need to build them and so that’s what we are kind of stuck with and we don’t have a policy of like a lot of the competitors do where they get someone to build it and get it leased up, partially leased up and then we do a takeout. So we just – the whole thing comes on our balance sheet and to our income statement, so it’s a little ugly, but it kind of all net out in the end I believe. So I don’t think there is any one lesson we knew. We have tried to avoid building. But just right now, certain markets and everything, we are just going to have to build and it’s a torturous process to put it politely and almost adversarial. This is not to be believed that people will be as I don’t know, they want to be so much in your business through the local people I believe. But that’s just the market and everybody has the same – there is nobody in the storage business that’s got some big deal up on anybody else I don’t think. Everybody is going through that problem.

So delays in terms of getting it built would be the headache, but in terms of once it’s built, you are getting the occupancy and rate that works for your returns?

Yes, of course. I have shining stars and barking dogs. But overall, yes, I think we are seeing things come in. The delays are coming and the delays in getting the entitlement and getting to where you can actually break ground are running longer than we had forecasted. So it’s an error on our part I guess in that regard, but once they are built, we are still renting up predictably. But as I said in my earlier comments, we are going to get some sluggishness in some markets, that’s got to happen. There is just so much product coming on board no different than apartments or single-family homes or any of these things. When people get a little too exuberant, it’s going to slowdown for somebody. And I don’t know that we will be totally an exception in that regard, but I am not seeing a big slowdown yet, but what part of the country are you from?

Atlanta.

Atlanta. Well, you can drive around Atlanta. You can see they are sprouting like mushroom, okay, so...

Yes, it’s always been a bad self-storage market here.

Well, but we are doing fine in Atlanta. So our results are okay. I would say they are better than average and of course part of it is I have a crackerjack team in Atlanta. I wish I had that team in every metro area in the United States. We have a good reputation with the customer. We are recognized in the market very, very well I think in Atlanta. I can’t tell you off the top of my head how much storage we have, but...

We have over I think around 34, 35 locations and there is a lot of different ways to slice Atlanta, so I might be undercounting, but we are over 90% occupancy and we are getting good rate increases there, so that whereas other people have complained a bit, our team has done quite well.

Still much of this is subjective. And of course, the way I look at all of it is subjective. Okay, so what’s the market type? Perform better. I mean, now from a specific point, that’s where I am with every one of my people in the management side, but I still believe we are going to see some sluggishness out here, whether it’s this year, next year, 2 years from now, there is just so much product coming online and so many new entrants in the market. We are all pretty sure there is a certain way to riches with little work. Well, it’s not – that’s not been our experience.

Yes. And we appreciate – I always appreciate the candor and a lot of management teams, they just tell you what’s going right and that you guys are always telling us where you can improve. Can you talk about areas where you are excelling, maybe areas that you are excited about that are coming in ahead of expectations?

Well, you changed my whole outlook on life, because things will….

Well, if I could just mention something from a financial perspective and Craig, we have spoken for a while now, we are coming off a couple of years where we have been increasing the fleet at a fairly significant rate and that’s watered down some of our what I referred to them as efficiency results, gross revenue per unit utilization. And what we have seen for this 9-month period now is just about every model of truck that we have is up in just about every statistic. So we have been able to swallow a large increase in the fleet. And in the middle of that, a whole lot of disruption from recalls and whatnot and still get the fleet where we needed it and show reasonably good improvement in overall utilization profitability of the fleet, but I would point that out from a financial perspective I think we have done pretty good with that over the last 9 months.

And so I mean, you all hinted at buying more 26 footers coming up, have they been – had a good return?

Yes. And the consumer wants more of it and we are putting the lid to it, so we will see a fair amount come out over the next 12 to 16 months as we are going to be a little aggressive there. As you probably know, we assemble most of our van boxes on chassis we buy from different motor carriers. So, we kind of have a – we kind of know our plan out for the future a little bit. We plan out just a little bit long. So those trucks will be coming in, in pretty good quantity over the next 12 to 16 months and I think the market is doing well.

Yes. I guess the last one, you all called out revenue per transaction in the press release and I just glanced back quickly and hadn’t seen that in the last few. Is that a change there in some – I mean not pricing, but consumer uptake of products? I am curious what that, just that byline might indicate?

Sure, Craig. A couple of things go into that, but it’s going to be either miles driven per transaction or the revenue per mile are the two larger components for that. And we haven’t seen a significant increase in miles per transaction. In December, we did from that last mile business, but for the 9 month period, not so much. So, I am hesitant to make any comments about the overall rate environment, but it does seem that we are earning a bit more per mile than we did last year.

So little bit more, pricing is tight in that quarter as it was last year?

Probably. It’s not quite that precise, but since we have – the other thing that affects this is what sized truck it is, basically, big trucks rent more than a little truck, does that make sense? Yes, just across the whole fleet. So there is still a little increase there, while we weren’t adding big trucks. It means we probably got a little bit of price, yes.

Okay, great. Thank you.

Okay.

Ladies and gentlemen, at this time we will conclude our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Well, I would like to thank you all for attending the call and supporting us. And I look forward to talking to you again when we have more results to report. Do you want to do the closing then, Sebastien?

That’s it. Thanks everyone for joining us. We’ll talk to you again after we file the 10-K in May. Thank you.

The conference has now concluded. We thank you all for attending today’s presentation. You may now disconnect your lines.