AMERCO (UHAL) Q1 2022 Earnings Call Transcript

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AMERCO (UHAL 0.99%)
Q1 2022 Earnings Call
Aug 5, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the AMERCO First Quarter Fiscal 2022 Investor Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Sebastien Reyes. Please go ahead.

Sebastien Reyes -- Director of Investor Relations

Good morning, and thank you for joining us today. Welcome to the AMERCO first quarter fiscal 2022 investor call. Before we begin, I'd 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 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 June 30, 2021, which is on file with the U.S. Securities and Exchange Commission.

I'll now turn the call over to Joe Shoen, Chairman of AMERCO.

Edward J. Shoen -- Chairman

Good morning. U-Haul self-move products and services is what is driving our current success. AMERCO is on the move, and U-Haul is supporting it. However, we continue to run behind on capex for new rental trucks and affiliated an additional storage units. We are unlikely to get the trucks we want anytime soon. We may be able to catch up on storage units. Supply chain issues are everywhere. This will increase capex in subsequent periods and is causing ongoing disruptions.

Our U-Box and moving health operations are continuing to grow. We remain supported by a low interest rate environment and support from a group of long-term lenders. Our personnel remains stressed. I've talked about this before. We have more unfilled positions than I am comfortable with and that just puts more work on the rest of the team.

Our current success will embolden many competitors. Every time we fall short in service to a customer, we encourage that customer to consider alternatives. We must continually upgrade our game to succeed. And of course, that's what I plan to do.

I'll now turn the call over to Jason to go through the numbers.

Jason A. Berg -- Chief Financial Officer

Thanks, Joe. Yesterday, we reported first quarter earnings of $17.60 a share. That's compared to $4.47 a share for the same period in fiscal 2021. I'll start off with our equipment rental revenue. We experienced an increase of 58% or approximately $381 million for the first quarter versus the same period last year. To put this into perspective a bit, the first quarter of last year was the hardest hit month for -- from COVID-19 for our equipment rental business. We had a quarterly decline in revenue of 13% or $94 million. But excluding that and calculated an average growth rate from the first quarter of the year before fiscal 2020, we still had an 18% increase or a $287 million improvement.

During the first quarter of this year, we saw increases in one way in in-town revenue and transactions. Average miles per transaction increased and rates remained in a good place. Compared to the same period last year, we increased the number of retail locations and independent dealers.

As a reminder, it was July of 2020 that we started to see our equipment rental revenues rebound from COVID and they started to increase. July of 2020, we added an 11% increase in revenue. But even with that relatively strong comparable figure from last year, we are still seeing continued growth in unit revenues for July of this year.

Capital expenditures on new rental equipment were $310 million this quarter. That's up from $123 million in the first quarter of last year. There is still uncertainty surrounding the delivery schedules for receiving equipment for manufacturers. Our initial projection for gross equipment purchases this fiscal year before sales was $1.2 billion. It's likely that some portion of that is going to be pushed into our next fiscal year.

Proceeds from the sales of retired rental equipment increased by $102 million to a total of $176 million so far this year. Sales volume for the rest of this year is also going to be dependent on the availability of new trucks to put into the fleet.

For the equipment that we are electing to sell, there has been a strong market so far this year. The first quarter continued to be a good period for filling storage units. Looking at our occupied unit count at the end of June, we had an increase of 98,000 occupied units compared to the same time last year, and that continued to improve into July.

Storage revenues were up $28 million, which is about a 26% increase for the quarter. And our all-in blended occupancy rate experienced an increase of 12% to an 80% average for the entire quarter. Most of our storage competitors that report publicly share some type of stabilized occupancy figure. Our version of that for facilities that have been at 80% occupancy for at least two years, that represents a little over 45% of our locations. Those locations had an average occupancy of 96.7% versus 92.4% the year before. Now this represents facilities that have been at 80% for two years, but we have a large group of facilities that have opened up in between the last couple of years. We are seeing that those properties also are reaching 80%. In fact, nearly 80% of our locations ended June with 80% occupancy or better.

For the first quarter of fiscal 2022, we have invested $184 million in real estate acquisitions along with self-storage and U-Box warehouse development as compared to $103 million last year. Our goal is to increase the pace of this investment. We currently have just under 6.8 million new square feet in development across approximately 140 projects, and our acquisition pipeline is now beginning to accelerate. We have approximately $250 million of deals in escrow that may or may not close.

In the moving and storage segment, revenue growth continues to outpace expense growth, resulting in margin improvements. For both the GAAP operating margin, total cost to total revenue, as well as the EBITDA margin, we posted improvements compared to the first quarters of either fiscal 2021 or fiscal 2020.

Operating expenses in the quarter increased by $122 million compared to last year. If you compare those cost to the year before, we're up $79 million. In the press release and in our filing, we highlighted a $34 million increase in fleet repair and maintenance compared to last year. Fleet activity was at a low point last year at this time. If you compare those costs against the first quarter of the year before, we're showing about a $6 million increase in repair costs. Due to this dislocation of business last year from COVID, you're going to see reported increases in maintenance and repair costs during this year.

Other categories that experienced large increases during the quarter were personnel, shipping costs associated with U-Box moves, liability costs and payment processing costs associated with the large increase in revenue. After three consecutive quarters of declines in equipment depreciation, we saw that number increase this quarter and is likely going to continue in that direction as we take delivery of new equipment.

Before I hand the call back to the operator, I'd also like -- we'd also like to thank or congratulate our life insurance team over at Oxford for their recent upgrade they received from A.M. Best to an A rating. It's been a long-term goal there, and they finally achieved it.

So with that, I'd like to hand the call back to our operator, Gary, to begin the question-and-answer portion of the call.

Questions and Answers:

Operator

[Operator Instructions] Our first question is from Steven Ralston with Zacks. Please go ahead.

Steven Ralston -- Zacks -- Analyst

Good morning and congratulations on the amazing top line revenue gain in the rental business.

Jason A. Berg -- Chief Financial Officer

Thanks, Steven.

Steven Ralston -- Zacks -- Analyst

I'd like to delve into that somewhat. You've given a lot of information about the volume of transactions going up and the average revenue per transaction, both in-town and in one-way rentals. But the gate was so large, especially when you -- as you did compare it to 2020, actually, it turns out to be like a 16% annualized gain if you look over two years.

In the past, you've mentioned something like there have been double-digit increases in volumes and average revenue per transaction. But this time, you didn't mention something that. Am I supposed to assume that this gain was done on single-digit gains?

Jason A. Berg -- Chief Financial Officer

No. The transaction increases were about half of it.

Steven Ralston -- Zacks -- Analyst

You also give a clue that the expenses on the equipment were higher, obviously, due to higher usage and preventative maintenance. But that flows through to how you receive -- generated this revenue gain. Can you expand upon that?

Jason A. Berg -- Chief Financial Officer

Sure. The maintenance and repair costs increased, but still at a rate slower than the top line growth. So we still picked up some margin even with the increase in the repair and maintenance costs. So -- the two biggest drivers on a normal basis for repair and maintenance in our business is going to be miles driven by the fleet, which are up. So we're seeing an increase in preventative maintenance costs and then costs associated with prepping the fleet for sale.

So we did sell more units this year than last year because the commercial auto auctions were largely shut down during the first quarter of last year. If you compare our sales volume to two years ago, we're actually a little bit below the sales volume from the first quarter of two years ago. The increase in the gain on disposal of equipment is largely from improved sales price per unit. So the increase in repair and maintenance from two years ago is much more moderate. I think I mentioned it was only about a $6 million increase compared to those periods largely from just increase in mileage.

Steven Ralston -- Zacks -- Analyst

I'm going to try to attack this from a different direction. Your product and services in the self-moving side was up only half the amount that the rental revenue was. It was only up 14.8% versus 36.5% for the rentals. Usually, those move in tandem. Can you explain the disparity?

Jason A. Berg -- Chief Financial Officer

Sure. On that, there's three, I'll call them product categories within retail sales. The largest is moving supply sales. The next would be the sales of towing accessories and the installation of hitches and then propane sales. So we had large increases in all three of those categories last year. We've seen the hitch sales slowdown from last year. I think we saw four, five months in a row of kind of record hitch sales as people were going out and recreating in new ways. So I think demand has come off a bit and also, we had a pretty good inventory of hitches going into COVID. There's been supply issues related to hitch supplies that probably have caused a few problems as well. Propane is just an issue of volume that kind of ebbs and flows with weather conditions around the country. And then moving supply sales are closer to the increase in transaction growth on the U-Move side. So that's still tracking relatively close.

Steven Ralston -- Zacks -- Analyst

Okay. Traditionally, your second fiscal quarter is slightly stronger than your first fiscal quarter. You mentioned that so far, July is tracking well. Should I expect that traditional relationship to continue if the next quarter should be slightly stronger than the one you just reported, a top line?

Edward J. Shoen -- Chairman

Well, this is Joe. I surely hope so. And July was good. So I surely hope so, but I don't think anybody knows all the drivers of this moving activity. So we're planning for it to be very busy.

Steven Ralston -- Zacks -- Analyst

Thank you. Just looking at the capex, you mentioned that you did spend $304 million on truck and trailer sales, which is slightly higher. But I didn't see a similar increase in the amount of depreciation, which I assume you were able to purchase it very late in the quarter, new equipment?

Jason A. Berg -- Chief Financial Officer

Yes, it was coming in fairly regular throughout the quarter. I think you have some trucks dropping off of there. We did see -- if you exclude the gains from the sale of equipment, the depreciation line went up. So I don't have it right in front of me, but we did see a few million dollar increase in equipment depreciation for the quarter, and I think that will keep climbing.

Steven Ralston -- Zacks -- Analyst

And last question. Looking at your other revenue line, it was actually the -- well, net interest. It's the strongest percentage change of almost 67%. And it seems to be driven, as you mentioned, in the U-Box program. This is still in, I would think, in a nascent stage and that it should get much larger over time. First, is that accurate? And second of all, if it does, would that become a separate line item in your revenue line-up?

Jason A. Berg -- Chief Financial Officer

Well, I'll tackle the technical question, and then I'll let Joe comment on the program. So the -- there's a couple of tests to determine when you have to break a line out -- a revenue line out. Certainly, the growth, we're checking the boxes there. I think as a percent of total revenue, it's not quite there yet. We're likely to hold out until we're forced to report that and to confirm the majority of that increase is coming from the U-Box program.

Edward J. Shoen -- Chairman

And as to just the business in general, it's clear consumers have an appetite for a move of this type and just remains to be seen how well we execute. I think if we execute, I believe the demand is there. So our plan is that it will grow.

Steven Ralston -- Zacks -- Analyst

Thank you for taking my questions.

Operator

The next question is from Jamie Wilen with Wilen Management. Please go ahead.

Jamie Wilen -- Wilen Management -- Analyst

Hi, fellow. Congratulations on the quarter. I believe that was the largest profit quarter in the history of the company. Is that true?

Edward J. Shoen -- Chairman

It's real close. I think the third quarter -- or second quarter of last year was approaching it, but not quite.

Jamie Wilen -- Wilen Management -- Analyst

Okay. The question just asked about U-Box. You said once it becomes a certain percentage of total revenue, we will have to break that out. What is that percentage, just the accounting rule?

Jason A. Berg -- Chief Financial Officer

I think it's about 10%.

Jamie Wilen -- Wilen Management -- Analyst

Okay. And profitability of U-Box now that it's starting to get some traction. Is it nearing the corporate average?

Jason A. Berg -- Chief Financial Officer

Yes. I mean it's all a game and how you allocate costs, Jamie, I've said that. We're always -- with all the interplay between product lines as best as we can estimate, yes, it's contributing to the profitability of the company. It's not quite at the overall percentage based upon how we're measuring it right now, but it's still a benefit.

Jamie Wilen -- Wilen Management -- Analyst

Got you. Now on the -- in the self-storage area, as you've had to slow down the new facilities, it's been incredible what's happened to the company as a greater percentage of our units are maturing. Historically, I thought it takes at least three years for a new unit to become cash flow positive. But as I'm hearing within the industry, people like Life Storage are having units at 100% occupancy and having to move things away. It seems like these newer units maybe actually be filling up at least that pace. And then beyond that, given that the industry, a, couldn't add a lot of new facilities and is reaching a higher level of occupancy. Could you talk about rental rates within the industry in self storage?

Edward J. Shoen -- Chairman

This is Joe. There will be some increases selectively. We do all our increases on -- by model by store. So there's not a -- we don't do a general, and I don't think anybody does a general 2% or 3% or sub type increase, most everybody is very specific. I would expect as rooms approach or exceed 90%, you'll see some rental rate increases. There's considerable discussion among frontline managers as to how supportable this will be because they see the customers and the customers aren't necessarily possessing a lot of more discretionary income. So there's a lot of disruption in the economy. It has resulted in everybody that I know in the storage business seeing higher occupancy. It's resulted in essentially every case, rooms filling quicker than they historically have filled. We're enjoying that. I believe that's true with most everybody in the business.

Having the right mix and being in the right locations is kind of going to influence whether we are able to see rate increases for two or three or four years. It's our hope to do that, but it's -- we don't feel as optimistic about that as the current occupancy would show. In other words, we're not -- if this had been 10 years ago and we had these occupancies, we'd be raising rates just as quick as we can.

So there's going to be some rate increases, but there's a whole complicated thing going on here, Jamie, with inflation, what people are paying for new units and what we're going to be able to charge. I think the good news is we got a lot of units that are up and running. But as we put new stuff in, it's going in a fairly high cost and that's the same thing with all our competitors. They do a lot of buying units and it's very expensive to buy them.

So what that means is what's going to be the most profitable going ahead. I don't think there's a guarantee. So far, I don't have a dead loser on my hands of any of the last, say, 150 stores I've gone in. And so that makes me feel positive that we're executing pretty decently. But in the past, I've had dead losers 20 years ago, I've had stores that five years to fill. It's just frightening thought. We're not seeing any of that activity right now.

So hopefully, we'll see some rate increases, but I'm really confused and I think our people are as to what is driving this and what this next round of evictions or no evictions or whatever the political thing that's going back and forth, what effect it's going to have. It clearly will have an effect. Perhaps it will boost occupancy more. I really -- I don't know what to say.

Jamie Wilen -- Wilen Management -- Analyst

Back to the original question of how these units filling up a little quicker than you had anticipated. Are you seeing that? Is that -- are units achieving that 80% occupancy rate or whatever it takes to be free cash flow breakeven at a quicker timetable than it had been previously?

Edward J. Shoen -- Chairman

Absolutely. I'm not -- what I'm going to now say there's a new time frame, OK? But no, I have a story I looked at yesterday and the manager opened six months, they're up over 400 units. Well, if every one of those did that, it'd be a wonderful day. And of course, I said that as a benchmark with the rest of my managers to encourage them -- can be up 400 units. But if you can be up 400 units in six months, you got a winner on your hands. And you'll be positive cash flowing 12 to 14 months out.

Jamie Wilen -- Wilen Management -- Analyst

That's incredible. As you look at occupancy rates, in the March quarter, your occupancy rate was 74%, I believe. You said now at the end of June is 80%. Are we pushing up occupancy rates literally 1% to 2% each month?

Edward J. Shoen -- Chairman

Yes. But you see, we're not -- we're not adding the units as fast as I would like. I'm kind of -- a little bit to your chagrin sometimes. I'm always trying to get more capacity out there, OK? And so what's really had a big impact to that is our inability. I'll let Jason correct me if I'm wrong, but we did something like 3.5 million units trailing 12 months. And before that, we were running 4.5 million or over 5 million.

Jason A. Berg -- Chief Financial Officer

Yes. Our peak in the 12-month period was adding about a little over 6 million square feet is what we've done at our peak. So we've certainly slowed. I think the number of rooms that we've added in the last 12 months is maybe closer to 38,000. But I do believe that we've doubled the pace at which we're filling rooms. So normally, as a rough estimate, looking back over the last three or four years, we're filling about 10% of available rooms are getting filled each year, and we're twice that pace right now. So it's a combination of the pace of adding rooms has slowed a bit, but we've also sped up how many rooms we're filling.

Jamie Wilen -- Wilen Management -- Analyst

Okay. As a shareholder, I'm kind of pleased that the percentage of new units doesn't overwhelm our core anymore. It's maybe 10% of our core units as opposed to opening up 15% new units, and we still have plenty of growth ahead within that.

Last question, I'll hop back in the queue. We're earning a decent amount of money. We've always done over the last however many years, just special dividend. Is there any reason that U-Haul won't announce a regular dividend policy and then do special dividends beyond that given that I mean, in this past quarter, we earned $350 million, yet we paid out a dividend of $10 million, which is nice, but it seems like we could have a regular dividend and then pay extras beyond that.

Edward J. Shoen -- Chairman

I'll speak to that. I don't have for sure comment. Part of the opportunity with me is, is I have a very long frame of reference. And so I remember many years we had no dividend at all. And I'm loathed to promise something I'm not going to perform on. But I think your comments are heated and they're represented at the Board level. So it's not a closed discussion or closed book.

Jamie Wilen -- Wilen Management -- Analyst

Okay. Great job of managing the business. These are incredible results. Thank you.

Operator

The next question is from Craig Inman with Artisan Partners. Please go ahead.

Craig Inman -- Artisan Partners -- Analyst

Hey. I was curious about -- Jason, you all mentioned -- and Joe mentioned the pickup in the pipeline for self-storage and obviously, the cost pressures there in terms of building some compression in cap rates. So can you talk about how you keep your discipline in terms of building that backlog and not compressing returns, keeping the good return profile on that investment?

Edward J. Shoen -- Chairman

Well, of course, a great deal of it has been we want to get enough mass going ahead. So you saw me over the last 5 years, drive very hard at trying to add more total mass. So at the point we get enough financial mass there, it's going to kind of self-in fund and make a return. So there's not an exact science to it, but we're a heck of a lot closer to it today than we were there years ago. I'm not sure we're quite there. Again, I lost from my point of view, the momentum over the last 18 months, first, because COVID scared us, I think, the first 90 days. And then after that, it was just -- it's been really hard to get things rolling because of both supply chain problems and the general labor market.

It's hard to -- It's hard to find framers or cement finishers. I mean, all these trades are kind of in short supply. And so we haven't quite got the momentum up, but I'm driving real hard on it. I plan to get that momentum up. But I would rather have had another 1.5 million square feet on the books right now. I think I would have filled more rooms if I had more available sites because there's -- one is at a given site, if you have 100 empty rooms, that's an opportunity. But if you can open an entire new point, there you can gain a lot more -- new point might have somewhere between 600 or 1,100 rooms depending on what was going on and it will contribute more to overall rooms rented than what I can get taking something from 80 to 90.

Craig Inman -- Artisan Partners -- Analyst

Okay. But Joe, you all aren't decreasing in trying to build and rebuild that momentum. Is there a decrease in the required return to get that going?

Edward J. Shoen -- Chairman

Well, Jason kind of his financial analysts set the return I would tell them to keep a low breadth. They're steady, so I have not been successful in getting them to back down. So it puts us in a jam. And of course, it's always in retrospect, did you miss a good one? And I could say I've missed more good ones than made mistakes. So that might be a good thing from somebody's point of view, you see. But I don't want to miss out on too many deals. You see we continually get outbid on all these big deals. People bringing it down, and they're always bidding more money than we are comfortable bidding. And -- but still, we're -- as Jason said, we did 6.5 million square feet, 2.5 years ago. We can do that much and the snowball is getting bigger. So absorbing it becomes easier than it was two years or three years ago to absorb that much square footage is this -- as a portion of the whole to a smaller amount.

Craig Inman -- Artisan Partners -- Analyst

Right. I'm curious about the labor, the job openings and wanting to fill them. I mean what goes to your head in terms of how to resolve that issue? Is it -- does it just take time? Do wages need to go up? I mean what is the background conversation for management there?

Edward J. Shoen -- Chairman

It's a little bit of everything. It's making your onboarding process much simpler, less confusing. It's considering personnel you might have rejected for some other reason in prior years, but maybe you're going to give them a chance and evaluate how they actually work for the first week or two. It's making the work attractive. We're not a Starbucks. It's hard to say happy environment, pretty girls, I mean that's not the environment here. So we have to -- we're kind of sorting for people who are a little bit more hard work oriented, and that's not an easy sell. And to speak, at least talking to my recruiters, they say they're not 10 minutes into the deal and the people ask can they work from home? Well, not probably, you see; not very likely. We have some phone operators and such from home. But by and large, the bulk of our personnel are either fixing equipment or dispatching and receiving equipment, a very physical thing. It's generally exposed to the weather. So it's -- that's not an attractive proposition. So we're having to work at how to communicate that in an attractive manner to the right person. And we're still learning.

It's -- I have a daughter who's 23, and she told me here about 10 days ago, "Dad, I can't get any of my friends to come to work for us." And she says, "They all want to work from home." But I said, "I understand that." But -- and of course, my daughter actually works in the store and has for two years, and of course, she's not working from home. This morning, she's putting a hitch on a car. That's a very physical thing. So how to get a young woman to be interested to put a hitch on a car is a little bit -- we're still learning how to do that right. I've been lucky with her. She's interested in it. But there's not that many women, yet as everybody knows, I need to be hiring more women and getting more women in management positions. And so they're going to have to come up through that program.

So it's -- there's not a simple cure in sight. I don't know if cutting back all my managers complain about -- it's too easy to get unemployment that pays too much. I don't know if changing that's going to actually change at our thing. But -- and the question is or a bunch of these people even going to come back to work at all, I couldn't answer that question. I'll just say this has been slow for us. I'm back right now almost 250 maintenance technicians. Well, that's a lot of work. And that's not going to fill real quick.

So -- but we need all that work done or the customer needs it done. We can't just ignore it. And we don't -- we can't turn to contractors very easily on most of this stuff. Most of our things like this maintenance and our dispatch and receive require us. But the one kind of ace in the hole we have is what we call U-Haul dealers, and they do over slightly over half our truck and trailer business. And there -- we're attempting to gear that up right now because they can come on board perhaps if we can locate them. They can come on board. They already have a small business of their own. And they typically just add U-Haul to their existing business. And that gives them a little bit more revenue and gives us, of course, another point. So that's kind of an ace in the hole we have.

And I believe, Jason, you might correct me, I believe they've grown a little bit faster in revenue over the last 18 -- well, 12 months than our stores have.

Jason A. Berg -- Chief Financial Officer

Certainly, the dealer network was hit harder by COVID last year. So we've seen that bounce back. It used to be about a 50:50 split in revenue. It dropped down several percentage points, leading up to COVID and during COVID. And now it's been coming back as the dealer network is picking up more of its share as it is closer to where it historically was.

Edward J. Shoen -- Chairman

Which is a bright light from my point of view, because these are people, they're not employees of ours, they're actually independent agents. So bringing them on doesn't give me a bunch of HR opportunities. So there's no simple solution. I learned an interesting thing the other day. I don't know, I'm sure you're seeing it. The fast foods are all putting a wage in the window of $15 or $16 an hour. Well, I had somebody go there and actually took the job, and they were advised when they actually onboarded that that was a shift differential and expected to go away in September. So there's a little bit of normal hustle going on in this market. And I'm not sure I want to start people at a wage and then decrease it three months later. So there's just a lot of activity. And we're just -- we're in there dealing with.

Craig Inman -- Artisan Partners -- Analyst

Yes. Yes, you don't want to let the pressure enter immediately. But I mean, operationally, is this too many positions unfilled that it's obviously, the results right now don't show any distress or any operational trouble, but how long can we go on?

Edward J. Shoen -- Chairman

Wearing out the workforce. Everybody is maxed. Everybody's shuffling around things like vacation days and this sort of thing in an effort. I have a very dedicated work group, and they want to serve the customer, and they're willing to do quite a little bit to get that done. But at a point they all need to take their vacation. They just -- there's a limit to this, and they're constantly operating pretty close to full speed. Normally, in a workday, you have kind of some ebb and flow and you can kind of say, well, I'm going to get to sit down here at 11:00, it will slow down or pretty much it's on your feet all day long move, move, move. There's no real ebb, because when it's hitting hard, we're a little overrun. And so as soon as it ebbs, we're immediately trying to catch back up, and that's kind of been the situation at all of our retail levels. And we have a lot of our personnel, obviously, that are operating right at the retail level.

Craig Inman -- Artisan Partners -- Analyst

Okay. I was curious on -- there's a comment, Jason, last quarter, I believe, on looking at extending the duration of the loans on the real estate side. Any update there in terms of financing or obviously, these assets have become a lot more valuable in the last 12 months? Any change in plans there?

Jason A. Berg -- Chief Financial Officer

We still think it's a great environment to lock rates. And getting back to your original question or one of your first questions about how we're maintaining price discipline for our return. The return is predicated on the amount of equity that you invest in and one of the variables being the debt amount and the cost of debt. And if we can adjust that variable in our model, it gives you a little bit more room to operate within that model. So we have a number of things that are still in process right now. But liquidity is at a high point and it's likely to go a little bit higher as we're going into a cycle of where we expect to reinvest heavily again similar to what happened during the time period when we sold the portion of our Chelsea, New York location and took that money and reinvested it back. So I think we'll see a similar several years ahead of us.

Craig Inman -- Artisan Partners -- Analyst

Okay. All right. That's -- I'll ask one more on the truck shortage. I mean, how long can you guys keep this fleet if you can't replace it? Obviously, we went into the downturn with the newest fleet ever. Any issues there?

Edward J. Shoen -- Chairman

Of course, there is. And it really depends on how much maintenance. Maintenance and capex are just the different sides of the same door. So we'll have to pop maintenance. That's a little bit limited by our ability to gear up, but we're very actively doing it. We'll be adding a couple of fleet, replaced five or six repair facilities in the last, say, 12 or 14 months, and I would hope to do that again and again, you're expanding capacity. So -- but then you have to staff it, just have them in the buildings and such, doesn't do it. So we're going to see some increased maintenance because you're just running the miles. As you said, we went into this with a terrific fleet and it still is in good shape, but it's just going to burn more repair dollars, that's it.

Jason A. Berg -- Chief Financial Officer

And Craig, we are getting some new trucks in. So we're about twice where we were last year at this time, but about half of where we were at two years ago.

Craig Inman -- Artisan Partners -- Analyst

Okay. That's it from me right now. Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Jason A. Berg -- Chief Financial Officer

This is Jason. I wanted to -- before handing it back to Joe, I wanted to thank everyone for participating in the meeting. And remind you that on Thursday, August 19, we have a few important meetings for shareholders at 9 a.m. Arizona Time. We're going to start off with our Annual Stockholder Meeting. There is once again going to be a live video feed broadcast over the Internet. And then two hours after that, at 11:00 Arizona Time, we're going to do our Virtual Analyst and Investor Meeting. Joe is going to be moderating both of these meetings, and we'll have some other executives available for questions and answers. Please feel free to start submitting those questions to Sebastien ahead of time. Last year, we had great participation before the meeting. I think we actually got more questions than we had time to answer, but we look forward to speaking to you in a few weeks.

Edward J. Shoen -- Chairman

Well, thanks, Jason. Again, I thank everybody for their support. We're going to have a busy 12 months ahead of us, and I expect to turn in good results. Thank you, again.

Operator

[Operator Closing Remarks]

Duration: 43 minutes

Call participants:

Sebastien Reyes -- Director of Investor Relations

Edward J. Shoen -- Chairman

Jason A. Berg -- Chief Financial Officer

Steven Ralston -- Zacks -- Analyst

Jamie Wilen -- Wilen Management -- Analyst

Craig Inman -- Artisan Partners -- Analyst

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