TravelCenters of America Reports Mixed 4Q, Annual Results
TravelCenters of America, the nation’s only publicly traded truck stop network, reported a narrowed loss in fourth-quarter net income but an increase in revenue.
For the quarter ended Dec. 31, TravelCenters had a loss of $5.92 million, or 18 cents per diluted share, compared with a loss of $20.7 million, or 35 cents, in the comparable year-ago period.
Total revenue for the quarter increased to $1.53 billion compared with $1.40 billion a year earlier.
The volume of diesel sold in the quarter increased to 400.5 million gallons from 392.7 million gallons in the 2017 period. And revenue for fuel, including gasoline, rose to $1.1 billion on higher prices and volume compared with $970 million a year ago. Its fuel gross margin per gallon was 18.2 cents compared with 14.6 cents a year earlier.
“Despite ongoing technological and competitive headwinds, we grew total fuel sales volume by 0.8% and total nonfuel revenues by 3.9%,” CEO Andrew Rebholz said.
“One soft spot in our fourth-quarter operating results was related to site-level operating expenses; our ratio of these expenses to nonfuel revenues increased,” he said. “This resulted from higher labor costs as we recruited and trained truck repair technicians ahead of the increased business volume we expect.”
On Sept. 1, the company entered into an agreement to sell 225 convenience stores, one stand-alone restaurant and certain related assets. The sales price was $330.6 million, resulting in net proceeds of $319.9 million after transaction-related costs of $9.7 million. In connection with the sale of its convenience stores, the company recognized a loss on disposal of $79.6 million and a goodwill impairment charge of $17.8 million.
The company used most of the proceeds from that sale to purchase 20 previously leased travel centers from its primary landlord Hospitality Properties Trust, and reduced annual minimum rent payable to Hospitality Properties by $43.1 million. In addition, it established a third brand in its travel center network by converting four existing locations to the smaller format TA Express brand announced earlier this year.
For the year, the company posted a net loss of $120.4 million, or 7 cents, compared with net income of $9.28 million, or 50 cents, a year earlier.
Revenue rose to $6.23 billion compared with $5.31 billion a year earlier.
The company’s business includes travel centers in 43 states and Canada as well as stand-alone restaurants in 14 states.
Its travel centers operate under the TravelCenters of America, TA, TA Express, Petro Stopping Centers and Petro brand names and offer diesel and gasoline fueling, restaurants, truck repair services, convenience stores and other services designed to provide attractive and efficient travel experiences to professional drivers and other motorists. TA’s stand-alone restaurants operate principally under the Quaker Steak & Lube brand name.
