TravelCenters Reports Third-Quarter Income Rose, Launch of Commercial Tire Network
TravelCenters of America reported third-quarter income rose as revenue dipped amid gains in fuel volume, fuel gross margin, nonfuel gross margin and continued improvements in site level operating expense controls, it said.
Separately, it announced the formation of the TA Truck Service Commercial Tire Network to meet increased customer demand for flexible, efficient sourcing of commercial tires, it said.
RELATED: TravelCenters of America forms commercial tire network
Net income for the period ended Sept. 30 was $10.9 million, or 28 cents per share, a 10.9% increase compared with $9.8 million, or 26 cents for the 2015 third quarter, it said Nov. 8.
Net income was aided by internal and external growth that outpaced headwinds of increased fuel efficiency for heavy-duty truck engines and a softness in freight volume, resulting in an increase in net income attributable.
Revenue slipped to $1.47 billion, compared with $1.5 billion, the Westlake, Ohio-based company said.
Greater fuel efficiency for heavy-duty truck engines and a softness in freight volume hurt diesel sales, it said, as gallons sold in the quarter fell to 419,176, compared with 439,850 year-over-year.
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Same-site fuel sales volume decreased due to fuel efficiency gains by TA's commercial diesel customers and TA's continued effort to manage fuel gross margin by balancing competitive fuel pricing decisions with their impact on volume, the company said.
Gasoline volumes climbed to 148,264 gallons, compared with 110,456, it said.
Also, “We have significantly expanded the ways in which we may sell tires and the tires that we may sell to our customers,” CEO Thomas O’Brien said in a statement. “In addition to our traditional retail and ‘national account’ offering, we have already added tire brands,including Cooper Tire Roadmaster, Goodyear Marathon and Kelly, and expect to add others soon, including BF Goodrich, Pirelli and Formula by Pirelli.”
Many of the tires in its line up will now be available for pick-up by customers, delivery at customer locations and through direct sales, it said.
See behind the scenes at our Commercial Tire Network debut announcement, then learn more about the new program >> https://t.co/UrSH23GrzR pic.twitter.com/F7qMUrt020 — TravelCentersTAPetro (@TATravelCenters) November 4, 2016
It also expanded the array of tire brands available through both its RoadSquad emergency roadside service and growing OnSITE mobile maintenance service, it said, noting it has been in the truck stop tire business for over 40 years.
The company said it believes the TA Truck Service Commercial Tire Network is the largest independent commercial tire dealer in the United States. The network includes 243 truck service facilities, 1,079 repair bays, nearly 3,000 technicians, more than 1,600 RoadSquad Connect emergency roadside assistance vehicles and a growing fleet of OnSITE mobile maintenance vehicles.
“In the past we were, in effect, the distribution arm of the various tire companies that we did business with. And today we’re a commercial dealer,” O’Brien said in an earnings call.
“We think what we have done is provide opportunities for TA to sell tires as a commercial dealer which is different from selling tires in the truck stop channel,” he said.
TravelCenters’ fleet customers are focused on the “combination of competitive fuel price, great service, and a broad array of services in truck repair and maintenance,” he added.
