James Wilen

Jamie Wilen proposed selling a territory of well-occupied self-storage facilities without significant U-Box presence to a publicly held REIT to crystallize value for shareholders, using proceeds for stock buybacks or debt reduction.

Answer

Chairman Joe Shoen acknowledged the financial logic but expressed wariness about selling assets, fearing potential regret if the market improves. He agreed to explore the proposal with CFO Jason Berg. Shoen noted that past efforts to improve stock liquidity had minimal results and suggested another way to demonstrate value is to achieve 90% occupancy in stores, currently around 80% effective occupancy, with plans to fill the 290,000 available rooms. He also highlighted U-Haul's outperformance against REITs in maintaining rates and expanding its customer base, emphasizing their focus on customer service.

James Wilen asked about the rationale for reducing fleet expenditures by only $500 million in the coming year and future spending plans, given fleet utilization is a prime objective. He also inquired about slowing the pace of self-storage development due to capacity utilization. Finally, he suggested selling a territory of well-occupied self-storage facilities (without U-Box) to a publicly held REIT to crystallize value for shareholders, using proceeds for stock buybacks or debt reduction.

Answer

Joe Shoen (Chairman, U-Haul Holding Company) explained that the increased fiscal 2026 fleet expense was to rebalance the fleet, addressing imbalances in specific truck sizes (e.g., over-purchased 10-foot trucks, aging 20-foot trucks). He aims to reduce 10-foot truck purchases massively next year but will make modest buys of 20-foot trucks to smooth out the age profile, accelerating sales to manage the 'lump' of older vehicles. He confirmed that self-storage development has slowed significantly (down $400 million), but the impact is delayed due to the 3-year development cycle. He continues with strategic U-Box warehouses and opportunistic self-storage acquisitions. Regarding the suggestion to sell assets, Joe Shoen understood the math but was wary of selling, fearing regret if the market improves. He agreed to explore the idea with the CFO but noted past efforts to improve stock liquidity had minimal results. He believes another way to demonstrate value is to increase occupancy to 90% from the current 80% effective occupancy (290,000 empty rooms including managed portfolio), distinguishing U-Haul's customer service from competitors and highlighting U-Haul's outperformance in maintaining rates and expanding customer base compared to REITs.

James Wilen of Wilen Investment Management highlighted a perceived valuation gap, asking about share repurchases, the reason for a decline in P&C operating profit, and the possibility of selling the insurance business to unlock value.

Answer

Chairman & CEO Edward Joe Shoen acknowledged the valuation comment but is not currently pushing for a buyback, citing liquidity needs. CFO Jason Berg explained the P&C profit decline was due to mark-to-market losses on its stock portfolio. Shoen called selling the insurance business a "valid consideration" that is discussed internally.

James Wilen of Wilen Management asked about competitor construction levels in self-storage, the rate and margin dynamics of U-Box storage, U-Haul's key competitive advantages in the portable storage market, whether acquired storage properties are immediately accretive, and for more details on the impact of electric vehicle regulations.

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Chairman Edward Shoen stated that competitor construction appears high everywhere and provided extensive commentary on EV mandates, explaining there is no viable solution for U-Haul's truck sizes and that regulations have inflated the cost of traditional trucks. Executive Samuel Shoen explained that U-Box's competitive advantages are its lower cost, vast network, and delivery options, not just indoor storage, and that its metrics should eventually exceed traditional storage. CFO Jason Berg clarified that acquired properties are not always immediately accretive, as they often require a 'seasoning process' to normalize artificially low rental rates, which can cause a temporary occupancy dip.

James Wilen asked about the competitive advantage of integrating U-Box into new self-storage facilities, the valuation gap relative to peers like CubeSmart, and the strategic rationale for the aggressive development pace versus potentially selling mature assets.

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An executive identified as Sam Shoen clarified that while integrated U-Box storage is an advantage, the company's market share gains are driven more by its moving services, noting significant room for improvement in the storage side of U-Box. Chairman Edward Shoen acknowledged that aggressive development is a near-term drag on earnings but is core to the long-term strategy. He dismissed the idea of selling mature assets, explaining that partitioning integrated facilities is operationally complex and provides only a 'onetime pop' rather than sustained value.

Jamie Wilen of Wilen Management praised the significant SG&A cost reductions and questioned why Koppers isn't accelerating its share repurchase program more aggressively given the stock's current valuation.

Answer

CEO Leroy Ball acknowledged the rationale, stating the company repurchased $15 million in Q1 under the new plan and intends to actively use the program. He noted that credit agreements place some limits on the annual pace of buybacks but affirmed the company's commitment to repurchasing shares while they are viewed as undervalued.

James Wilen from Wilen Management inquired about the number, timing, and historical production volumes of the H2S wells, the cost breakdown for the Cote d'Ivoire FPSO versus drilling items, and potential efficiencies from the new FPSO.

Answer

CEO George Maxwell and executive Thor Pruckl explained that two Ebouri wells are currently tied in, with one recently brought online producing around 1,600 bbl/d. The H2S wells are scheduled for the tail end of the drilling program, likely in 2026, due to long-lead times for severe service equipment. CFO Ronald Bain noted the gross FPSO project cost is around $650 million. Pruckl added that the FPSO work is primarily a refurbishment to its original condition with modernization upgrades, not a significant change to its topside capabilities.

James Wilen questioned the significant increase in the 2025 share count forecast, sought details on the proprietary products business, inquired about M&A strategy and target multiples, and commented on the company's low visibility on Wall Street.

Answer

Executive Patrick Fogarty attributed the higher share count to a 1-million-share ATM offering in 2024 and clarified the 14.7 million figure is a full-year weighted average. He described the proprietary fastener products as high-growth items used for lightweighting in auto and aerospace. Executive Matthew V. Crawford added that the M&A strategy is focused on smaller, strategic bolt-ons and acknowledged the need to improve the company's visibility, calling the suggestion to reintroduce Park-Ohio to Wall Street 'welcome and timely'.

Asked about the percentage of business from national accounts, the potential for a stock buyback, the company's target for optimal fleet age, and whether new branch openings contribute to the fleet's young age.

Answer

The company does not disclose its national account mix but confirmed the large customer base is growing. A stock buyback is not a current priority, as capital is focused on growth through acquisitions and new branches, while the dividend will continue. The current fleet age is well below an optimal level, providing flexibility. The young age is a result of high fleet growth and deploying new assets to new locations.