TravelCenters of America LLC (Nasdaq: TA) today announced
financial results for the three months ended March 31,
2017:
(in thousands, except per share and per gallon
amounts unless indicated otherwise)
Three Months
EndedMarch 31, 2017
2016 Total revenues $ 1,390,766 $ 1,149,822 Loss before
income taxes (48,716 ) (15,621 ) Net loss attributable to common
shareholders (29,424 ) (9,944 ) Net loss per common share
attributable to common shareholders (basic and diluted) $ (0.74 ) $
(0.26 ) Supplemental Data: Fuel sales volume (gallons):
Diesel fuel 394,705 422,400 Gasoline 119,451 118,604
Total fuel sales volume (gallons) 514,156 541,004
Total fuel revenues $ 935,296 $ 709,528 Fuel gross margin
85,585 91,701 Fuel gross margin per gallon $ 0.166 $ 0.170
Total nonfuel revenues $ 451,374 $ 436,018 Nonfuel gross margin
255,375 244,315 Nonfuel gross margin percentage 56.6 % 56.0 %
EBITDA(1) $ (9,555 ) $ 11,725
(1) A reconciliation from net loss attributable to common
shareholders to earnings before interest, taxes and depreciation
and amortization, or EBITDA, appears in the supplemental data
below. TA believes that net loss attributable to common
shareholders is the most directly comparable financial measure
calculated and presented in accordance with U.S. generally accepted
accounting principles, or GAAP.
Thomas M. O'Brien, TA's CEO, made the following statement
regarding the 2017 first quarter results:
"Major contributors to the $33.1 million increase in the loss
before income taxes of $48.7 million in the 2017 first quarter
compared to the loss before income taxes of $15.6 million in the
2016 first quarter were as follows:
- $8.2 million of costs related to our
litigation against FleetCor Technologies, Inc. and its subsidiary
Comdata, Inc.;
- $5.2 million of non-cash asset write
offs related to programs which we determined to curtail, in
connection with a larger review of cost-saving initiatives which
are currently expected to result in decreased costs and expenses of
approximately $12 million on an annual basis beginning in the
second half of 2017;
- A $7.1 million, or 6.7%, decline in
total gross margin in excess of site level operating expenses,
related primarily to less demand for fuel experienced during the
2017 first quarter;
- $6.1 million of increased depreciation
and amortization (excluding the $5.2 million of increased non-cash
charges described above); and
- $4.5 million of increased rent.
The increases in depreciation and amortization and in rent
described above resulted from our expansion activities during 2016
and the $5.2 million of increased non-cash charges described above.
Our results included a $2.5 million sequential improvement in site
level gross margin in excess of site level operating expenses
contributed by our recently acquired locations during the 12 months
ended March 31, 2017, versus the 12 months in 2016, and we believe
that the soft market environment during the 2017 first quarter
prevented a larger improvement. I remain confident in the prospect
of realizing the expected results from these investments."
First Quarter 2017 Business
Commentary
Fuel sales volume decreased by 26.8 million gallons, or 5.0%,
and same site fuel sales volume decreased by 34.6 million gallons,
or 6.6%, each in the 2017 first quarter compared to the 2016 first
quarter. TA believes fuel volume decreases experienced during the
2017 first quarter resulted from comparatively weak consumer demand
for gasoline, a relatively soft trucking freight environment and
continued fuel efficiency gains, especially by TA's commercial
diesel fuel customers. Fuel revenue increased by $225.8 million, or
31.8%, in the 2017 first quarter compared to the 2016 first quarter
primarily due to higher market prices for fuel. Fuel gross margin
decreased by $6.1 million ($0.004 per gallon), to $85.6 million
($0.166 per gallon) primarily as a result of the impact of lower
demand in the first quarter 2017, reactive pricing strategies by
TA's competitors and TA's reactions thereto.
Nonfuel revenue increased $15.4 million, or 3.5%, in the 2017
first quarter compared to the 2016 first quarter due to an $18.9
million increase attributable to sites acquired since the beginning
of the 2016 first quarter, partially offset by a $3.5 million same
site decline due to planned closure or conversion of certain
restaurants ($1.9 million) and generally decreased sale prices for
TA's new commercial tire initiative ($1.4 million) designed to
increase volume and eventually improve profits. Nonfuel gross
margin increased $11.1 million, or 4.5%, in the 2017 first quarter
compared to the 2016 first quarter due to a $10.0 million increase
from sites acquired and developed since the beginning of the 2016
first quarter, and a $1.1 million, or 0.5%, increase in same site
nonfuel gross margin. Same site nonfuel gross margin in the 2017
first quarter was 56.8% of nonfuel revenue, compared to 56.1% in
the 2016 first quarter, a change largely attributable to the
positive impact of TA's purchasing and pricing strategies and TA's
marketing initiatives.
Site level operating expenses increased $11.9 million, or 5.1%,
in the 2017 first quarter compared to the 2016 first quarter
primarily due to a $10.6 million increase due to sites acquired
since the beginning of the 2016 first quarter. Excluding the $1.8
million of increased transaction fees withheld by FleetCor/Comdata,
site level operating expenses decreased $0.5 million on a same site
basis. On a same site basis, site level operating expenses as a
percentage of nonfuel revenues increased versus the prior year
quarter by 0.7 percentage points to 54.3%. The change in this
percentage is primarily due to the increased transaction fees
withheld by FleetCor/Comdata.
Selling, general and administrative expenses for the 2017 first
quarter increased $9.8 million, or 31.8%, compared to the 2016
first quarter, primarily attributable to litigation costs of $6.4
million related to TA's dispute with FleetCor/Comdata.
Real estate rent expense increased $4.5 million, or 7.0%, in the
2017 first quarter compared to the 2016 first quarter primarily
resulting from additional rent on assets sold to and leased back
from Hospitality Properties Trust, or HPT, in 2016 including some
sites that TA developed and sold to HPT for the development
cost.
Net loss attributable to common shareholders for the 2017 first
quarter was $29.4 million ($0.74 per common share) compared to $9.9
million ($0.26 per common share) for the 2016 first quarter,
resulting principally from the factors discussed above.
EBITDA for the 2017 first quarter decreased by $21.3 million, or
181.5%, as compared to the 2016 first quarter. EBITDA decreased
primarily as a result of the changes in fuel gross margin, site
level operating expenses, selling, general and administrative
expenses and real estate rent expense noted above. A reconciliation
from net loss attributable to common shareholders to EBITDA appears
in the supplemental data below.
Travel Centers Segment
Both fuel and nonfuel revenues increased, resulting in an
increase in total revenues of $190.7 million, or 18.9%, in the 2017
first quarter as compared to the 2016 first quarter. The increase
in total revenues was primarily due to increases in market prices
for fuel and from development properties opened in 2016 and
2017.
Site level gross margin in excess of site level operating
expenses decreased in the 2017 first quarter by $9.5 million, or
9.4%, as compared to the 2016 first quarter primarily due to a $7.5
million decline in fuel gross margin and the $1.8 million higher
transaction fees withheld by FleetCor/Comdata.
On a same site basis, site level gross margin in excess of site
level operating expenses decreased by $8.5 million, or 8.7%, in the
2017 first quarter due to decreases in fuel gross margin of $8.2
million due to the impact of lower demand in the first quarter
2017, reactive pricing strategies of TA's competitors and TA's
response thereto, as well as an increase in site level operating
expenses of $0.7 million due to increased FleetCor/Comdata
transaction fees. Excluding the increased FleetCor/Comdata
transaction fees, site level operating expenses decreased by $1.1
million, or 0.5%.
Convenience Stores Segment
Both fuel and nonfuel revenues increased, resulting in an
increase in total revenues of $37.6 million, or 29.6%, in the 2017
first quarter compared to the 2016 first quarter. The increases in
both fuel and nonfuel revenues were due to increases in market
prices for fuel and the impact of the 29 locations acquired since
the beginning of the 2016 first quarter.
Site level gross margin in excess of site level operating
expenses increased in the 2017 first quarter by $1.0 million, or
22.7%, as compared to the 2016 first quarter due to improvements at
same sites and locations acquired since the beginning of the 2016
first quarter.
On a same site basis, site level gross margin in excess of site
level operating expenses increased by $0.6 million, or 14.0%, in
the 2017 first quarter due to increases in fuel ($0.5 million) and
nonfuel ($0.7 million) gross margin primarily due to the impact of
TA's continued ramp up of acquired sites, despite soft market
conditions, partially offset by an increase in site level operating
expenses.
Investment and Growth
Activities
Since the beginning of 2011, when TA began its growth and
acquisition program, to March 31, 2017, TA has invested $861.9
million to develop, purchase and improve travel centers,
convenience stores and standalone restaurants. For the 12 months
ended March 31, 2017, these investments produced site level
gross margin in excess of site level operating expenses of $102.5
million, and, on a sequential basis, $2.5 million, or 2.5%, greater
than site level gross margin in excess of site level operating
expenses for the 12 months ended December 31, 2016. This change is
attributable to the net effect of an increase in fuel gross margin
($0.6 million), an increase in nonfuel gross margin ($10.3 million)
and an increase in site level operating expenses ($9.4 million).
Excluded from the results above is a development property that was
completed in late March 2017.
TA believes that its investments require a period after they are
developed or acquired and upgrades are completed to reach expected
stabilized financial results, generally three years for travel
centers and one year for convenience stores.
TA acquired 36 travel centers during the 2011 to March 31,
2017, period which are included in the "Travel Centers Segment Same
Site Operating Data" for the three months ended March 31, 2017
and 2016. As of March 31, 2017, TA invested $312.3 million
(including the cost of improvements) in these 36 locations, and
they generated $52.8 million of site level gross margin in excess
of site level operating expenses during the 12 months ended
March 31, 2017, and, on a sequential basis, $1.5 million, or
2.7%, less than site level gross margin in excess of site level
operating expenses for the 12 months ended December 31, 2016. This
change is attributable to the net effect of a decline in fuel gross
margin ($1.4 million), an increase in nonfuel gross margin ($0.1
million) and an increase in site level operating expenses ($0.2
million). Three locations were developed by TA for a total
investment of $64.9 million, and they generated $5.0 million of
site level gross margin in excess of site level operating expenses
during the 12 months ended March 31, 2017; TA has operated
these locations on average for less than a full year (one opened in
each of January, March and May 2016). In late March 2017, TA
completed the development of an additional travel center.
TA acquired 228 convenience stores during the 2013 to
March 31, 2017, period. Of these stores, 199 are included in
the "Convenience Store Segment Same Site Operating Data" for the
three months ended March 31, 2017 and 2016. As of
March 31, 2017, TA invested $394.3 million (including the cost
of improvements) in these 199 locations, and they generated $33.4
million of gross margin in excess of site level operating expenses
during the 12 months ended March 31, 2017, and, on a
sequential basis, $0.5 million, or 1.6%, greater than site level
gross margin in excess of site level operating expenses for the 12
months ended December 31, 2016. This change is attributable to the
net effect of an increase in fuel gross margin ($0.5 million), an
increase in nonfuel gross margin ($0.7 million) and an increase in
site level operating expenses ($0.6 million). The remaining 29
locations were acquired by TA in 2016 for $49.0 million (including
the cost of improvements), and these convenience stores generated
$2.4 million of site level gross margin in excess of site level
operating expenses during the 12 months ended March 31, 2017.
Some of the 29 convenience stores TA acquired during 2016 were
fully or partially out of service while being renovated during the
12 months ended March 31, 2017.
TA acquired one standalone restaurant during 2015, 50 during
2016 (40 of which were operated by franchisees) and six of those 50
from one of TA's franchisees in 2017. As of March 31, 2017, TA
invested $41.3 million (including the cost of improvements) in
these 51 locations, and they generated $8.9 million of site level
gross margin in excess of site level operating expenses during the
12 months ended March 31, 2017, and, on a sequential basis,
$1.5 million, or 21.1%, greater than site level gross margin in
excess of site level operating expenses for the 12 months ended
December 31, 2016.
Other Growth Initiatives
TA's business requires TA to deliver a myriad of goods and
services to multiple customer types from each of TA's locations.
TA's business, in particular the travel center segment, also
requires significant capital expenditures to remain
competitive.
In addition to the investments in new locations described above,
TA made capital expenditures of $25.4 million in its business for
the three months ended March 31, 2017, some of which were site
improvements of the type TA typically sells to HPT for an increase
in rent and some of which were not yet complete as of
March 31, 2017. TA believes that approximately $16.8 million
of this amount may be considered to be investments designed to
provide incremental returns to TA, while the remainder, or $8.6
million, may be considered to be investments to maintain TA's
competitive position. The returns on these investments may not
exceed the cost of capital invested on a short term basis. TA does
expect, however, that on a longer term basis, and especially during
periods of economic and industry expansion, these investments may
provide attractive returns.
TA is currently undertaking several internal growth initiatives
that TA believes will be profitable and that are geared toward a
combination of (a) developing and delivering new products and
services to existing customers and (b) delivering products and
services to new customers.
Conference Call:
On Tuesday, May 9, 2017, at 10:00 a.m. Eastern Time, TA
will host a conference call to discuss its financial results and
other activities for the three months ended March 31, 2017.
Following management's remarks, there will be a question and answer
period.
The conference call telephone number is 877-329-4614.
Participants calling from outside the United States and Canada
should dial 412-317-5437. No pass code is necessary to access the
call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the
conference call will be available for about a week after the call.
To hear the replay, dial 412-317-0088. The replay pass code is
10104381.
A live audio webcast of the conference call will also be
available in a listen only mode on TA's website at
www.ta-petro.com. To access the webcast, participants should visit
TA's website about five minutes before the call. The archived
webcast will be available for replay on TA's website for about one
week after the call. The transcription, recording and
retransmission in any way of TA's first quarter conference call is
strictly prohibited without the prior written consent of TA.
The Company's website is not incorporated as part of this press
release.
About TravelCenters of America LLC:
TA's nationwide business includes travel centers located in 43
U.S. states and in Canada, standalone convenience stores in 11
states and standalone restaurants in 15 states. TA's travel centers
operate under the "TravelCenters of America," "TA," "Petro Stopping
Centers" and "Petro" brand names and offer diesel and gasoline
fueling, restaurants, truck repair services, travel/convenience
stores and other services which are designed to provide attractive
and efficient travel experiences to professional drivers and other
motorists. TA's convenience stores operate principally under the
"Minit Mart" brand name and offer gasoline fueling as well as
nonfuel products and services such as coffee, groceries, fresh food
offerings and other convenience items. TA's standalone restaurants
operate principally under the "Quaker Steak & Lube" brand
name.
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS.
WHENEVER TA USES WORDS SUCH AS "BELIEVE," "EXPECT," "ANTICIPATE,"
"INTEND," "PLAN," "ESTIMATE," "WILL," "MAY" AND NEGATIVES OR
DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, TA IS MAKING FORWARD
LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON
TA'S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN
OR IMPLIED BY TA'S FORWARD LOOKING STATEMENTS AS A RESULT OF
VARIOUS FACTORS. AMONG OTHERS, THE FORWARD LOOKING STATEMENTS WHICH
APPEAR IN THIS PRESS RELEASE THAT MAY NOT OCCUR INCLUDE:
- STATEMENTS BY TA'S CEO, MR. O'BRIEN,
THAT CERTAIN INITIATIVES ARE CURRENTLY EXPECTED TO RESULT IN
INCREASED MARGIN AND DECREASED EXPENSES OF APPROXIMATELY $12
MILLION ON AN ANNUAL BASIS BEGINNING IN THE SECOND HALF OF 2017,
AND EXPRESSIONS OF HIS CONFIDENCE IN THE PROSPECT OF TA REALIZING
IMPROVED RESULTS FROM RECENTLY ACQUIRED LOCATIONS. THESE STATEMENTS
MAY IMPLY THAT TA'S INITIATIVES WILL GENERATE NET INCOME
ATTRIBUTABLE TO COMMON SHAREHOLDERS. HOWEVER, INCREASED MARGINS OR
DECREASED EXPENSES MAY NOT BE REALIZED AND/OR MAY NOT BE IN EXCESS
OF THE NEGATIVE IMPACT OF DECLINING CUSTOMER DEMAND FOR TA'S GOODS
AND SERVICES, INCLUDING FUEL, OR OF INCREASED TRANSACTION FEES OR
OTHER COSTS. MANY OF THE LOCATIONS THAT TA HAS ACQUIRED PRODUCED
OPERATING RESULTS THAT CAUSED THE PRIOR OWNERS TO EXIT THESE
BUSINESSES. TA'S SUCCESS IN THESE MATTERS DEPENDS ON MANY FACTORS
SOME OF WHICH ARE BEYOND TA'S CONTROL;
- STATEMENTS BY MR. O'BRIEN, AND OTHER
DISCLOSURES IN THIS PRESS RELEASE, SEPARATELY ADDRESS SOME OF THE
FIRST QUARTER 2017 IMPACTS OF TA'S LITIGATION WITH
FLEETCOR/COMDATA. THE FACT THAT THESE ARE SEPARATELY ADDRESSED MAY
IMPLY THAT THESE IMPACTS ARE GOING TO BE TEMPORARY, OR ONE-TIME IN
NATURE. HOWEVER, TA'S LITIGATION WITH FLEETCOR/COMDATA IS NOT
CONCLUDED, AND UNTIL IT IS CONCLUDED, TA EXPECTS THAT
FLEETCOR/COMDATA IS LIKELY TO CONTINUE TO WITHHOLD TRANSACTION FEES
AT AN ELEVATED LEVEL (SUCH LEVEL AVERAGED $0.9 MILLION PER MONTH IN
THE MONTHS FEBRUARY AND MARCH 2017), AND THAT TA WILL CONTINUE TO
INCUR SIGNIFICANT COSTS RELATED TO THIS LITIGATION. WHILE TA
CURRENTLY EXPECTS THIS LITIGATION MAY BE CONCLUDED DURING THE THIRD
QUARTER OF 2017, IT MAY NOT BE. IN ADDITION, WHILE TA EXPECTS TO
PREVAIL IN THIS LITIGATION, IT MAY NOT. A DELAY IN THE CONCLUSION
OF THE LITIGATION, OR TA'S FAILURE TO PREVAIL COULD CAUSE EITHER OR
BOTH OF THE INCREASED TRANSACTION COSTS OR THE COSTS OF THIS
LITIGATION TO CONTINUE INDEFINITELY;
- TA BELIEVES THAT ITS INVESTMENTS
REQUIRE A PERIOD AFTER THEY ARE DEVELOPED OR ACQUIRED AND UPGRADES
ARE COMPLETED TO REACH EXPECTED STABILIZED RESULTS, GENERALLY THREE
YEARS FOR TRAVEL CENTERS AND ONE YEAR FOR CONVENIENCE STORES.
HOWEVER, TA'S FUTURE PROFITS WILL BE DETERMINED BY MANY FACTORS
INCLUDING TA'S ABILITY TO CONTROL ITS EXPENSES AND OTHER FACTORS
WHICH ARE BEYOND TA'S CONTROL SUCH AS THE DEMAND FOR TA'S GOODS AND
SERVICES CREATED BY THE ECONOMY'S GENERAL CONDITIONS. TA CANNOT BE
SURE THAT ITS INVESTMENTS WILL ACHIEVE STABILIZATION ON THE TIMING
IT EXPECTS OR AT ALL. CERTAIN RECENT ACQUISITIONS TA HAS MADE HAVE
TAKEN LONGER TO REACH STABILIZATION THAN HAD BEEN EXPECTED AND
FUTURE ACQUISITIONS AND INVESTMENTS MAY REALIZE SIMILAR
RESULTS;
- TA CHARGED DECREASED SALE PRICES FOR
ITS COMMERCIAL TIRE INITIATIVE DURING THE FIRST QUARTER OF 2017
WITH THE DESIGN TO INCREASE VOLUME AND EVENTUALLY IMPROVE PROFITS.
HOWEVER, TA MAY NOT REALIZE INCREASED VOLUME FOR ITS COMMERCIAL
TIRE SALES OR IMPROVED PROFITS;
- THIS PRESS RELEASE DISCLOSES CERTAIN
INVESTMENTS TA MADE DURING THE THREE MONTHS ENDED MARCH 31, 2017,
SOME OF WHICH WERE DESIGNED TO PROVIDE INCREMENTAL RETURNS TO TA
AND SOME THAT ARE CONSIDERED TO BE INVESTMENTS TO MAINTAIN ITS
COMPETITIVE POSITION. HOWEVER, TA MAY NOT REALIZE INCREMENTAL
RETURNS OR MAINTAIN ITS COMPETITIVE POSITION AS A RESULT OF THESE
INVESTMENTS; AND
- THIS PRESS RELEASE STATES THAT TA IS
CURRENTLY UNDERTAKING SEVERAL INTERNAL GROWTH INITIATIVES THAT TA
BELIEVES WILL BE PROFITABLE AND THAT ARE GEARED TOWARD INCREASING
ITS SALES OF PRODUCTS AND SERVICES TO ITS EXISTING AND NEW
CUSTOMERS. TA MAY NOT REALIZE THE BENEFITS IT EXPECTS FROM THESE
INITIATIVES AND THE COSTS IT INCURS IN DESIGNING, IMPLEMENTING AND
EXECUTING THESE INITIATIVES MAY EXCEED ANY BENEFITS IT MAY REALIZE
FROM THEM.
THE INFORMATION CONTAINED IN TA'S PERIODIC REPORTS, INCLUDING
TA'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2016, WHICH HAS BEEN FILED WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION, OR SEC, AND TA'S QUARTERLY REPORT ON FORM 10-Q FOR THE
PERIOD ENDED MARCH 31, 2017, WHICH HAS BEEN OR WILL BE FILED
WITH THE SEC, UNDER THE CAPTION "RISK FACTORS," OR ELSEWHERE IN
THOSE REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE DIFFERENCES FROM TA'S FORWARD LOOKING
STATEMENTS. TA'S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, TA DOES NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENT AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
TRAVELCENTERS OF AMERICA LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share
amounts)
Three Months EndedMarch 31, 2017
2016 Revenues: Fuel $ 935,296 $ 709,528
Nonfuel 451,374 436,018 Rent and royalties from franchisees 4,096
4,276 Total revenues 1,390,766 1,149,822
Cost of goods sold (excluding depreciation):
Fuel 849,711 617,827 Nonfuel 195,999 191,703 Total
cost of goods sold 1,045,710 809,530
Operating expenses: Site level operating 245,915 234,050
Selling, general and administrative 40,812 30,966 Real estate rent
67,999 63,529 Depreciation and amortization 31,800 20,525
Total operating expenses 386,526 349,070
Loss from operations (41,470 ) (8,778 )
Acquisition costs 140 969 Interest expense, net 7,384 6,821 Income
from equity investees 278 947
Loss before income
taxes (48,716 ) (15,621 ) Benefit for income taxes 19,315
5,677
Net loss (29,401 ) (9,944 ) Less: net
income for noncontrolling interests 23 —
Net loss
attributable to common shareholders $ (29,424 ) $ (9,944 )
Net loss per common share attributable to common
shareholders: Basic and diluted $ (0.74 ) $ (0.26 )
These financial statements should be read in conjunction with
TA's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
March 31, 2017 December 31, 2016
Assets Current assets: Cash and cash equivalents $ 37,646 $
61,312 Accounts receivable, net 111,981 107,246 Inventory 197,949
204,145 Other current assets 25,585 29,358 Total current
assets 373,161 402,061 Property and equipment, net 1,061,992
1,082,022 Goodwill 89,698 88,542 Other intangible assets, net
36,604 37,738 Other noncurrent assets 57,305 49,478
Total
assets $ 1,618,760 $ 1,659,841
Liabilities and
Shareholders' Equity Current liabilities: Accounts payable $
143,917 $ 157,964 Current HPT Leases liabilities 40,351 39,720
Other current liabilities 149,125 132,648 Total current
liabilities 333,393 330,332 Long term debt, net 318,959
318,739 Noncurrent HPT Leases liabilities 378,426 381,854 Other
noncurrent liabilities 62,981 75,837 Total liabilities
1,093,759 1,106,762 Shareholders' equity (39,518 and 39,523
common shares outstanding
at March 31, 2017 and December 31, 2016,
respectively)
525,001 553,079
Total liabilities and shareholders'
equity $ 1,618,760 $ 1,659,841
These financial statements should be read in conjunction with
TA's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA LLCRECONCILIATION OF
NON-GAAP FINANCIAL MEASURES(in thousands)
Non-GAAP financial measures are financial measures that are not
determined in accordance with GAAP. TA believes the non-GAAP
financial measures presented in the table below are meaningful
supplemental disclosures because they may help investors gain a
better understanding of changes in TA's operating results and its
ability to pay rent or service debt, make capital expenditures and
expand its business. These non-GAAP financial measures also may
help investors to make comparisons between TA and other companies
on both a GAAP and a non-GAAP basis. TA calculates EBITDA as
earnings before interest, taxes and depreciation and amortization,
as shown below. TA believes that EBITDA is a meaningful disclosure
that may help investors to better understand its financial
performance, including by allowing investors to compare TA's
performance between periods and to the performance of other
companies. EBITDA is used by management to evaluate TA's financial
performance and compare TA's performance over time and to the
performance of other companies. This information should not be
considered as an alternative to net income or income from
operations, as an indicator of TA's operating performance or as a
measure of TA's liquidity. Also, EBITDA as presented may not be
comparable to similarly titled amounts calculated by other
companies.
TA believes that net loss attributable to common shareholders is
the most comparable financial measure, determined according to
GAAP, to TA's presentation of EBITDA. The following table presents
the reconciliation of this non-GAAP financial measure to net loss
attributable to common shareholders for the three months ended
March 31, 2017 and 2016.
Three Months EndedMarch 31,
2017 2016 Calculation of EBITDA:
Net loss attributable to common shareholders $ (29,424 ) $ (9,944 )
Add: benefit for income taxes (19,315 ) (5,677 ) Add: depreciation
and amortization 31,800 20,525 Add: interest expense, net 7,384
6,821 EBITDA $ (9,555 ) $ 11,725
TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME
SITE OPERATING DATA(in thousands, except number of locations and
per gallon amounts unless indicated otherwise)
CONSOLIDATED SAME SITE OPERATING
DATA
The following table presents consolidated operating data for the
periods noted for all of the locations in operation on
March 31, 2017, that were operated by TA continuously since
the beginning of the earliest period presented, with the exception
of five locations TA operates that are owned by an unconsolidated
joint venture in which TA owns a noncontrolling interest. This data
excludes revenues and expenses at locations TA does not operate,
such as rents and royalties from franchisees and corporate level
selling, general and administrative expenses. TA does not exclude
locations from the same site comparisons as a result of capital
improvements to the site or changes in the services offered.
Three Months
EndedMarch 31, 2017
2016 Change Number of same site company operated
locations 420 420 — Diesel sales volume (gallons) 385,540
416,877 (7.5 ) % Gasoline sales volume (gallons) 107,758
111,068 (3.0 ) % Total fuel sales volume (gallons) 493,298
527,945 (6.6 ) % Fuel revenues $ 897,152 $
691,171 29.8 % Fuel gross margin 83,383 91,055 (8.4 ) % Fuel gross
margin per gallon $ 0.169 $ 0.172 (1.7 ) % Nonfuel revenues
$ 428,666 $ 432,201 (0.8 ) % Nonfuel gross margin 243,386 242,280
0.5 % Nonfuel gross margin percentage 56.8 % 56.1 % 70 pts
Total gross margin $ 326,769 $ 333,335 (2.0 ) % Site level
operating expenses 232,809 231,486 0.6 % Site level operating
expenses as a percentage of nonfuel revenues 54.3 % 53.6 % 70 pts
Site level gross margin in excess of site level operating expenses
$ 93,960 $ 101,849 (7.7 ) %
TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME
SITE OPERATING DATA(in thousands, except number of locations and
per gallon amounts unless indicated otherwise)
TRAVEL CENTERS SEGMENT SAME SITE OPERATING
DATA
The following table presents operating data for the periods
noted for all of the travel centers in operation
on March 31, 2017, that were operated by TA continuously
since the beginning of the earliest period presented, with the
exception of two travel centers TA operates that are
owned by an unconsolidated joint venture in which TA owns a
noncontrolling interest. This data also excludes revenues and
expenses at travel centers TA does not operate, such as rents and
royalties from franchisees and corporate level selling, general and
administrative expenses. TA does not exclude locations from the
same site comparisons as a result of capital improvements to the
site or changes in the services offered.
Three Months
EndedMarch 31, Travel Centers 2017
2016 Change Number of same site company
operated travel center locations 220 220 — Diesel sales
volume (gallons) 381,904 413,544 (7.7 ) % Gasoline sales volume
(gallons) 60,256 61,625 (2.2 ) % Total fuel sales
volume (gallons) 442,160 475,169 (6.9 ) % Fuel
revenues $ 804,609 $ 620,507 29.7 % Fuel gross margin 73,274 81,471
(10.1 ) % Fuel gross margin per gallon $ 0.166 $ 0.171 (2.9 ) %
Nonfuel revenues $ 374,941 $ 379,428 (1.2 ) % Nonfuel gross
margin 224,328 223,937 0.2 % Nonfuel gross margin percentage 59.8 %
59.0 % 80 pts Total gross margin $ 297,602 $ 305,408 (2.6 )
% Site level operating expenses 208,643 207,945 0.3 % Site level
operating expenses as a percentage of nonfuel revenues 55.6 % 54.8
% 80 pts Site level gross margin in excess of site level operating
expenses $ 88,959 $ 97,463 (8.7 ) %
TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME
SITE OPERATING DATA(in thousands, except number of locations and
per gallon amounts unless indicated otherwise)
CONVENIENCE STORES SEGMENT SAME SITE
OPERATING DATA
The following table presents operating data for the periods
noted for all of the convenience stores in operation on
March 31, 2017, that were operated by TA continuously since
the beginning of the earliest period presented, with the exception
of three convenience stores TA operates that are owned by
an unconsolidated joint venture in which TA owns a noncontrolling
interest. This data also excludes revenues and expenses at
convenience stores TA does not operate, such as revenues from a
dealer operated convenience store and corporate level selling,
general and administrative expenses. TA does not exclude locations
from the same site comparisons as a result of capital improvements
to the site or changes in the services offered.
Three Months
EndedMarch 31, Convenience Stores 2017
2016 Change Number of same site
company operated convenience
store locations
200 200 — Fuel sales volume (gallons) 51,138 52,776 (3.1 ) %
Fuel revenues $ 92,543 $ 70,664 31.0 % Fuel gross margin 10,109
9,584 5.5 % Fuel gross margin per gallon $ 0.198 $ 0.182 8.8 %
Nonfuel revenues $ 53,725 $ 52,773 1.8 % Nonfuel gross
margin 19,058 18,343 3.9 % Nonfuel gross margin percentage 35.5 %
34.8 % 70 pts Total gross margin $ 29,167 $ 27,927 4.4 %
Site level operating expenses 24,166 23,541 2.7 % Site level
operating expenses as a percentage of nonfuel revenues 45.0 % 44.6
% 40 pts Site level gross margin in excess of site level operating
expenses $ 5,001 $ 4,386 14.0 %
TRAVELCENTERS OF AMERICA LLCBUSINESS SEGMENT
INFORMATION(in thousands)
The following tables present business segment information for
travel centers and convenience stores, or TA's reportable segments,
for the three months ended March 31, 2017 and 2016.
Three Months Ended March 31, 2017
TravelCenters
ConvenienceStores
Corporateand Other
Consolidated Revenues: Fuel $ 814,141 $ 103,706 $
17,449 $ 935,296 Nonfuel 381,412 60,702 9,260 451,374 Rent and
royalties from franchisees 3,029 54 1,013
4,096 Total revenues 1,198,582 164,462 27,722
1,390,766
Site level gross margin in excess
of site level operating expenses $ 91,563 $ 5,363
$ 2,215 $ 99,141
Corporate operating
expenses: Selling, general and administrative $ 40,812 $ 40,812
Real estate rent 67,999 67,999 Depreciation and amortization 31,800
31,800
Loss from operations (41,470 )
Acquisition costs 140 140 Interest expense, net 7,384 7,384 Income
from equity investees 278 278
Loss before income
taxes (48,716 ) Benefit for income taxes 19,315 19,315
Net loss (29,401 ) Less: net income for
noncontrolling interests 23
Net loss attributable to
common shareholders $ (29,424 )
Supplemental data:
Gross margin Fuel $ 74,254 $ 11,245 $ 86 $ 85,585 Nonfuel
228,211 21,115 6,049 255,375 Rent and royalties from franchisees
3,029 54 1,013 4,096 Total gross margin
$ 305,494 $ 32,414 $ 7,148 $ 345,056
Site level operating expenses $ 213,931 $ 27,051
$ 4,933 $ 245,915
TRAVELCENTERS OF AMERICA LLCBUSINESS SEGMENT
INFORMATION(in thousands)
Three Months Ended March 31, 2016
TravelCenters
ConvenienceStores
Corporateand Other
Consolidated Revenues: Fuel $ 622,580 $ 72,631 $
14,317 $ 709,528 Nonfuel 381,183 54,123 712 436,018 Rent and
royalties from franchisees 4,142 134 — 4,276
Total revenues 1,007,905 126,888 15,029
1,149,822
Site level gross margin in excess of
site level operating expenses $ 101,031 $ 4,371
$ 840 $ 106,242
Corporate operating
expenses: Selling, general and administrative $ 30,966 $ 30,966
Real estate rent 63,529 63,529 Depreciation and amortization 20,525
20,525
Loss from operations (8,778 )
Acquisition costs 969 969 Interest expense, net 6,821 6,821 Income
from equity investees 947 947
Loss before income
taxes (15,621 ) Benefit for income taxes 5,677 5,677
Net loss (9,944 ) Less: net income for noncontrolling
interests —
Net loss attributable to common
shareholders $ (9,944 )
Supplemental data:
Gross margin Fuel $ 81,800 $ 9,789 $ 112 $ 91,701 Nonfuel
224,983 18,777 555 244,315 Rent and royalties from franchisees
4,142 134 — 4,276 Total gross margin $
310,925 $ 28,700 $ 667 $ 340,292
Site level operating expenses $ 209,894 $ 24,329 $
(173 ) $ 234,050
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170509005363/en/
TravelCenters of America LLCKatie Strohacker, 617-796-8251Senior
Director of Investor Relationswww.ta-petro.com
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