Second Quarter Fuel Sales Volume Increased
3.3%
Fuel Gross Margin Increased 3.3%
TravelCenters of America Inc. (Nasdaq: TA) today announced
financial results for the three and six months ended June 30,
2019:
(in thousands, except per share
amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Income (loss) from continuing
operations
$
1,209
$
8,638
$
(11,520
)
$
2,611
Net income (loss)
1,209
(33,924
)
(11,520
)
(44,002
)
Net income (loss) attributable to common
shareholders
1,178
(33,978
)
(11,569
)
(44,090
)
Income (loss) per common share from
continuing operations attributable to common shareholders (basic
and diluted)(1)
$
0.15
$
1.07
$
(1.43
)
$
0.32
Non-GAAP Measures:(2)
Adjusted income (loss) from continuing
operations
$
1,209
$
1,996
$
(13,355
)
$
(20,141
)
Adjusted income (loss) per common share
from continuing operations attributable to common shareholders
(basic and diluted)(1)
$
0.15
$
0.24
$
(1.66
)
$
(2.53
)
EBITDA
$
31,184
$
37,697
$
44,997
$
56,133
Adjusted EBITDA
31,184
29,444
42,544
26,486
(1)
Income (loss) per common share from
continuing operations attributable to common shareholders has been
retrospectively adjusted to reflect the reverse stock split of TA's
outstanding common shares effective August 1, 2019, which is
described further below.
(2)
Reconciliations from income (loss) from
continuing operations and income (loss) per common share from
continuing operations attributable to common shareholders, as
applicable, the financial measures determined in accordance with
U.S. generally accepted accounting principles, or GAAP, to the
non-GAAP measures disclosed herein are included in the supplemental
tables below.
Andrew J. Rebholz, TA's CEO, made the following statement
regarding the 2019 second quarter results:
"We believe that through the first six months of 2019 our
strategy to refocus our efforts on our core travel center
operations have been successful, including in the second quarter
despite cooler, wetter temperatures that generally tempered demand
for our truck service business. We have generated increases in both
fuel sales volume and nonfuel revenues on both a consolidated and
same site basis, and the modest growth in our site level operating
expenses and adjusted selling, general and administrative expenses
are in line with expectations given our future growth plans.
"Net income for the second quarter of $1.2 million was a $35.1
million improvement over the prior year second quarter, which
included a $42.6 million loss from discontinued operations, net of
taxes and a net $8.8 million pre-tax benefit from certain unusual
items. Adjusted EBITDA for the second quarter was a $1.7 million,
or 5.9%, improvement over the prior year.
"Also, we were successful in expanding our travel center network
during the second quarter, signing franchise agreements for five
additional travel centers. We have a number of additional potential
franchise locations in the pipeline and expect to acquire one
operating travel center and two development parcels before the end
of this year."
Financial Results Commentary
Fuel. The following table presents details for TA's fuel sales
during the 2019 second quarter as compared to the 2018 second
quarter.
(in thousands, except per gallon
amounts)
Three Months Ended June
30,
2019
2018
Change
Fuel sales volume (gallons):
Diesel fuel
426,543
407,929
4.6
%
Gasoline
75,803
78,518
(3.5
)%
Total fuel sales volume
502,346
486,447
3.3
%
Fuel revenues
$
1,117,671
$
1,149,486
(2.8
)%
Fuel gross margin
76,822
74,378
3.3
%
Fuel gross margin per gallon
$
0.153
$
0.153
—
%
Fuel sales volume for the 2019 second quarter increased by 15.9
million gallons, or 3.3%, as compared to the 2018 second quarter,
due to the following factors:
- a same site fuel sales volume increase of 11.9 million gallons,
or 2.5%, which primarily resulted from improved market conditions
and the success of TA's marketing initiatives; and
- a net increase of 4.0 million gallons at sites opened or closed
since the beginning of the 2018 second quarter.
Fuel revenues decreased by $31.8 million, or 2.8%, in the 2019
second quarter as compared to the 2018 second quarter, primarily
due to a decrease in market prices for fuel during the 2019 second
quarter, which was partially offset by the increase in fuel sales
volume.
Fuel gross margin for the 2019 second quarter increased by $2.4
million, or 3.3%, as compared to the 2018 second quarter. Diesel
fuel gross margin was essentially flat for the 2019 second quarter
as compared to the 2018 second quarter due to a slightly lower
gross margin per gallon, which was largely offset by a 4.6%
increase in diesel fuel sales volume. Gasoline gross margin
increased for the 2019 second quarter as compared to the 2018
second quarter primarily as a result of TA better managing sales
pricing.
Although, the U.S. government has not yet retroactively
reinstated the federal biodiesel blenders' tax credit for 2018 or
2019, TA believes the U.S. government may do so before the end of
2019. If the federal biodiesel blenders' tax credit is reinstated
for 2018 and 2019, TA expects to recognize reductions in fuel cost
of goods sold of approximately $35.0 million relating to 2018 and
$17.0 million relating to the first six months of 2019 in the
period the U.S. government enacts the tax credit reinstatement.
Although TA believes reinstatement of this credit is possible, TA
cannot be certain that the U.S. government will do so. TA has not
recognized any amount of the expected federal biodiesel blenders'
tax credit for 2018 or 2019.
Nonfuel. The following table presents details for TA's nonfuel
revenues during the 2019 second quarter as compared to the 2018
second quarter.
(in thousands)
Three Months Ended June
30,
2019
2018
Change
Nonfuel revenues:
Store and retail services
$
193,895
$
187,935
3.2
%
Truck service
173,431
176,115
(1.5
) %
Restaurant
108,756
107,392
1.3
%
Total nonfuel revenues
476,082
471,442
1.0
%
Nonfuel gross margin
$
288,584
$
287,198
0.5
%
Nonfuel gross margin percentage
60.6
%
60.9
%
(30
)pts
Nonfuel revenues increased by $4.6 million, or 1.0%, in the 2019
second quarter as compared to the 2018 second quarter, due to the
following factors:
- a $3.3 million net increase at sites opened and closed since
the beginning of the 2018 second quarter; and
- a $1.3 million same site increase primarily due to the positive
impact of certain of TA's marketing initiatives in store and retail
services, partially offset by a 1.5% decrease in truck service
revenues primarily as a result of a decrease in demand due to the
impact of cooler weather patterns.
Nonfuel gross margin increased by $1.4 million, or 0.5%, in the
2019 second quarter as compared to the 2018 second quarter, due to
the following factors:
- the $4.6 million increase in nonfuel revenues; and
- a decline in the nonfuel gross margin percentage that primarily
resulted from a change in the mix of products and services sold,
which partially offset the increase in nonfuel revenues.
Income from Continuing Operations and Adjusted Income from
Continuing Operations. Income from continuing operations for the
2019 second quarter was $1.2 million, as compared to $8.6 million
for the 2018 second quarter. The decrease in income from continuing
operations is primarily due to the $10.1 million of reimbursed
litigation costs collected from Comdata Inc., or Comdata, during
April 2018. Adjusted income from continuing operations for the 2019
second quarter was $1.2 million, as compared to $2.0 million for
the 2018 second quarter. The decrease in adjusted income from
continuing operations is primarily due to an increase in selling,
general and administrative expense as a result of annual salary
increases and increased headcount and the decrease in site level
gross margin in excess of site level operating expense.
(in thousands)
Three Months Ended June
30,
2019
2018
Change
Fuel gross margin
$
76,822
$
74,378
3.3
%
Nonfuel gross margin
288,584
287,198
0.5
%
Rent and royalties from franchisees gross
margin
3,611
4,049
(10.8
)%
Total site level gross margin
369,017
365,625
0.9
%
Less: site level operating expense
234,645
228,861
2.5
%
Site level gross margin in excess of site
level operating expense
$
134,372
$
136,764
(1.7
)%
Site level operating expense as a
percentage of nonfuel revenues
49.3
%
48.5
%
80
pts
Net Income (Loss) and Adjusted EBITDA. Net income (loss) for the
2019 second quarter improved by $35.1 million, as compared to the
2018 second quarter and adjusted EBITDA for the 2019 second quarter
increased by $1.7 million, as compared to the 2018 second quarter.
The net income (loss) improvement was largely due to a $42.6
million loss from discontinued operations, net of taxes, during the
2018 second quarter.
Growth Strategies
Thus far in 2019, TA has entered into seven franchise agreements
with four franchisees under TA's travel center brand names; one of
these franchised travel centers opened during the 2019 second
quarter and TA anticipates the remaining six travel centers will be
added to TA's network by the end of the 2020 first quarter. In
addition, TA has entered into agreements with one of these
franchisees pursuant to which TA expects to add two additional
franchised travel centers to its network, one within five years and
the other within 10 years.
Revolving Credit Facility
On July 19, 2019, TA and certain of its subsidiaries, as
borrowers or guarantors, entered into an amendment, or the
Amendment, to its amended and restated loan and security agreement,
or the Credit Facility, with Wells Fargo Capital Finance, LLC, as
administrative agent for various lenders. The Amendment amended the
Credit Facility to, among other things: (i) extend the maturity of
the Credit Facility from December 19, 2019, to July 19, 2024; (ii)
reduce the applicable margins on borrowings and standby letter of
credit fees by 25 basis points and on commercial letter of credit
fees by 12.5 basis points; (iii) make certain adjustments to the
limitations on investments, dividends and stock repurchases under
the Credit Facility in a manner favorable to TA; (iv) reduce the
sublimit for issuance of letters of credit under the Credit
Facility from $170.0 million to $125.0 million; and (v) make
certain adjustments to the borrowing base calculation in a manner
TA believes to be favorable. Under the Credit Facility, a maximum
of $200.0 million may be drawn, repaid and redrawn until
maturity.
Reverse Stock Split
On July 30, 2019, TA announced a reverse stock split of its
outstanding common shares at an exchange ratio of five to one,
which became effective as of August 1, 2019. As a result of the
reverse stock split, every five shares of TA's issued and
outstanding common shares were combined into one share. No
fractional common shares were issued in the reverse stock split.
Instead, fractional shares that otherwise would have resulted from
the reverse stock split were purchased by TA at the closing price
of TA's common shares on July 31, 2019. The common share
information included herein has been retrospectively adjusted to
reflect this reverse stock split.
Conversion to Corporation
On May 23, 2019, TA announced its plan to convert from a
Delaware limited liability company to a Maryland corporation, which
became effective as of August 1, 2019. Following the conversion to
a Maryland corporation, among other things, TA's common shares will
have a par value of $0.001 per share.
Conference Call
On Monday, August 5, 2019, 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 June 30, 2019. 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
10132754.
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 second 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 Inc.
TA's nationwide business includes travel centers located in 43
U.S. states and in Canada, standalone truck service facilities
located in two states and standalone restaurants located in 13
states. TA's travel centers operate under the "TravelCenters of
America," "TA," "TA Express," "Petro Stopping Centers" and "Petro"
brand names and offer diesel fuel and gasoline, restaurants, truck
repair services, travel/convenience stores and other services
designed to provide attractive and efficient travel experiences to
professional drivers and other motorists. TA's standalone truck
service facilities operate under the "TA Truck Service" brand name.
TA's standalone restaurants operate principally under the "Quaker
Steak & Lube" brand name.
TRAVELCENTERS OF AMERICA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands,
except per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Revenues:
Fuel
$
1,117,671
$
1,149,486
$
2,100,812
$
2,135,831
Nonfuel
476,082
471,442
916,956
895,317
Rent and royalties from franchisees
3,611
4,049
6,888
8,159
Total revenues
1,597,364
1,624,977
3,024,656
3,039,307
Cost of goods sold (excluding
depreciation):
Fuel
1,040,849
1,075,108
1,949,243
1,978,556
Nonfuel
187,498
184,244
355,766
345,655
Total cost of goods sold
1,228,347
1,259,352
2,305,009
2,324,211
Site level operating expense
234,645
228,861
467,365
451,873
Selling, general and administrative
expense
39,562
27,480
76,672
63,974
Real estate rent expense
63,770
70,684
130,183
140,920
Depreciation and amortization expense
23,213
21,123
47,972
41,669
Income (loss) from operations
7,827
17,477
(2,545
)
16,660
Interest expense, net
7,164
6,865
14,214
14,445
Other (income) expense, net
(144
)
903
430
2,196
Income (loss) before income taxes and
discontinued operations
807
9,709
(17,189
)
19
Benefit (provision) for income taxes
402
(1,071
)
5,669
2,592
Income (loss) from continuing
operations
1,209
8,638
(11,520
)
2,611
Loss from discontinued operations, net of
taxes
—
(42,562
)
—
(46,613
)
Net income (loss)
1,209
(33,924
)
(11,520
)
(44,002
)
Less: net income for noncontrolling
interest
31
54
49
88
Net income (loss) attributable to
common shareholders
$
1,178
$
(33,978
)
$
(11,569
)
$
(44,090
)
Net income (loss) per common share
attributable to common shareholders:(1)
Basic and diluted from continuing
operations
$
0.15
$
1.07
$
(1.43
)
$
0.32
Basic and diluted from discontinued
operations
—
(5.32
)
—
(5.83
)
Basic and diluted
0.15
(4.25
)
(1.43
)
(5.51
)
(1)
Net income (loss) per common share attributable to common
shareholders has been retrospectively adjusted to reflect the
reverse stock split of TA's outstanding common shares effective
August 1, 2019.
These financial statements should be read in
conjunction with TA's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2019, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, unless
indicated otherwise)
TA believes the non-GAAP financial
measures presented in the tables 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 when due, make capital expenditures and
expand its business. These non-GAAP financial measures also may
help investors to make comparisons between TA and other companies
and to make comparisons of TA's financial and operating results
between periods.
TA believes that adjusted income (loss)
from continuing operations, adjusted income (loss) per common share
from continuing operations attributable to common shareholders,
EBITDA, adjusted EBITDA, adjusted fuel gross margin and adjusted
fuel gross margin per gallon are meaningful disclosures that may
help investors to better understand TA's financial performance by
providing financial information that represents the operating
results of TA's continuing operations without the effects of items
that do not result directly from TA's normal recurring operations
and may allow investors to better compare TA's performance between
periods and to the performance of other companies. Management uses
these measures in developing internal budgets and forecasts and
analyzing TA's performance. TA calculates EBITDA as net income
(loss) before loss from discontinued operations, interest, taxes,
and depreciation and amortization, as shown below. TA calculates
adjusted EBITDA by excluding items that it considers not to be
normal, recurring, cash operating expenses or gains or losses.
The non-GAAP financial measures TA
presents should not be considered as alternatives to net income
(loss) attributable to common shareholders, net income (loss),
income (loss) from continuing operations, income (loss) from
operations or income (loss) per common share from continuing
operations attributable to common shareholders as an indicator of
TA's operating performance or as a measure of TA's liquidity. Also,
the non-GAAP financial measures TA presents may not be comparable
to similarly titled amounts calculated by other companies.
TA believes that income (loss) from
continuing operations is the most directly comparable GAAP
financial measure to adjusted income (loss) from continuing
operations; income (loss) per common share from continuing
operations attributable to common shareholders is the most directly
comparable GAAP financial measure to adjusted income (loss) per
common share from continuing operations attributable to common
shareholders; net income (loss) is the most directly comparable
GAAP financial measure to EBITDA and adjusted EBITDA; and that fuel
gross margin and fuel gross margin per gallon are the most directly
comparable GAAP financial measures to adjusted fuel gross margin
and adjusted fuel gross margin per gallon, respectively. The
following tables present the reconciliations of the non-GAAP
financial measures to the respective most directly comparable GAAP
financial measures for the three and six months ended June 30, 2019
and 2018.
Calculation of adjusted income (loss)
from continuing operations:
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Income (loss) from continuing
operations
$
1,209
$
8,638
$
(11,520
)
$
2,611
Add: Costs of HPT transactions(1)
—
—
458
—
Less: Loyalty award expiration(2)
—
—
(2,911
)
—
Add: Executive officer retirement
agreement expenses(3)
—
1,792
—
3,571
Less: Comdata interest income(4)
—
(568
)
—
(568
)
Less: Comdata legal reimbursements, net of
expenses(4)
—
(10,045
)
—
(9,967
)
Less: Federal biodiesel blenders' tax
credit(5)
—
—
—
(23,251
)
Add: Net tax impact(6)
—
2,179
618
7,463
Adjusted income (loss) from continuing
operations
$
1,209
$
1,996
$
(13,355
)
$
(20,141
)
Calculation of adjusted income (loss)
per common share from continuing operations attributable to common
shareholders (basic and diluted):
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Income (loss) per common share from
continuing operations attributable to common shareholders (basic
and diluted)
$
0.15
$
1.07
$
(1.43
)
$
0.32
Add: Costs of HPT transactions(1)
—
—
0.06
—
Less: Loyalty award expiration(2)
—
—
(0.36
)
—
Add: Executive officer retirement
agreement expenses(3)
—
0.23
—
0.45
Less: Comdata interest income(4)
—
(0.07
)
—
(0.07
)
Less: Comdata legal reimbursements, net of
expenses(4)
—
(1.26
)
—
(1.25
)
Less: Federal biodiesel blenders' tax
credit(5)
—
—
—
(2.91
)
Add: Net tax impact(6)
—
0.27
0.07
0.93
Adjusted income (loss) per common share
from continuing operations attributable to common shareholders
(basic and diluted)
$
0.15
$
0.24
$
(1.66
)
$
(2.53
)
Calculation of EBITDA and adjusted
EBITDA:
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Net income (loss)
$
1,209
$
(33,924
)
$
(11,520
)
$
(44,002
)
Add: Loss from discontinued operations,
net of taxes
—
42,562
—
46,613
Income (loss) from continuing
operations
1,209
8,638
(11,520
)
2,611
(Less) add: (Benefit) provision for income
taxes
(402
)
1,071
(5,669
)
(2,592
)
Add: Depreciation and amortization
expense
23,213
21,123
47,972
41,669
Add: Interest expense, net
7,164
6,865
14,214
14,445
EBITDA
31,184
37,697
44,997
56,133
Add: Costs of HPT transactions(1)
—
—
458
—
Less: Loyalty award expiration(2)
—
—
(2,911
)
—
Add: Executive officer retirement
agreement expenses(3)
—
1,792
—
3,571
Less: Comdata legal reimbursements, net of
expenses(4)
—
(10,045
)
—
(9,967
)
Less: Federal biodiesel blenders' tax
credit(5)
—
—
—
(23,251
)
Adjusted EBITDA
$
31,184
$
29,444
$
42,544
$
26,486
Calculation of adjusted fuel gross
margin and adjusted fuel gross margin per gallon:
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Fuel gross margin
$
76,822
$
74,378
$
151,569
$
157,275
Less: Loyalty award expiration(2)
—
—
(2,840
)
—
Less: Federal biodiesel blenders' tax
credit(5)
—
—
—
(23,251
)
Adjusted fuel gross margin
$
76,822
$
74,378
$
148,729
$
134,024
Fuel gross margin per gallon
$
0.153
$
0.153
$
0.156
$
0.166
Less: Loyalty award expiration(2)
—
—
(0.003
)
—
Less: Federal biodiesel blenders' tax
credit(5)
—
—
—
(0.025
)
Adjusted fuel gross margin per gallon
$
0.153
$
0.153
$
0.153
$
0.141
(1)
Costs of HPT Transactions. In January
2019, TA entered transaction agreements pursuant to which it
amended its leases with Hospitality Properties Trust, or HPT.
During the six months ended June 30, 2019, TA incurred $0.5 million
of expenses associated with the amendments of these leases, which
were included in selling, general and administrative expense in
TA's consolidated statements of operations and comprehensive income
(loss).
(2)
Loyalty Award Expiration. During the six
months ended June 30, 2019, TA introduced a new customer loyalty
program, UltraONE 2.0. As a result of introducing the new customer
loyalty program, certain loyalty awards earned under the program
now expire in 10 days for all loyalty members. This update resulted
in the immediate expiration of certain loyalty awards upon adoption
of the new customer loyalty program, generating $2.9 million of
additional revenue during the six months ended June 30, 2019, $2.8
million of which was recognized to fuel revenues and $0.1 million
to nonfuel revenues in TA's consolidated statements of operations
and comprehensive income (loss).
(3)
Executive Officer Retirement Agreement
Expenses. As part of TA's retirement agreement with a certain
former officer, TA agreed to accelerate the vesting of previously
granted share awards and make a cash payment. This acceleration and
cash payment resulted in additional compensation expense of $1.8
million and $3.6 million for the three and six months ended June
30, 2018, respectively, which was included in selling, general and
administrative expense in TA's consolidated statements of
operations and comprehensive income (loss).
(4)
Comdata Legal Reimbursements, Net of
Expenses and Interest Income. On April 9, 2018, the Court of
Chancery of the State of Delaware entered its final order and
judgment with respect to TA's litigation with Comdata, or the
Order. Pursuant to the Order, Comdata was required to, among other
things, reimburse TA for attorneys' fees and costs, together with
interest, in the amount of $10.7 million, which TA collected in
April 2018. In addition, during the three and six months ended June
30, 2018, TA incurred $37 thousand and $0.1 million, respectively,
of legal fees in its litigation with Comdata. The legal
reimbursements and expenses were included in selling, general and
administrative expense in TA's consolidated statements of
operations and comprehensive income (loss).
(5)
Federal Biodiesel Blenders' Tax Credit. On
February 8, 2018, the U.S. government retroactively reinstated the
2017 federal biodiesel blenders' tax credit. TA's recovery as a
result of this tax credit was $23.3 million and was recognized in
February 2018 as a reduction to fuel cost of goods sold in TA's
consolidated statement of operations and comprehensive income
(loss). TA collected this amount during the remainder of 2018.
(6)
Net Tax Impact. TA calculated the tax
impact of the adjustments described above by using its estimated
statutory rate of 25.2% and 24.7% for the three and six months
ended June 30, 2019 and 2018, respectively.
TRAVELCENTERS OF AMERICA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in
thousands)
June 30, 2019
December 31, 2018
Assets:
Current assets:
Cash and cash equivalents
$
25,785
$
314,387
Accounts receivable, net
147,620
97,449
Inventory
199,715
196,721
Other current assets
27,437
35,119
Total current assets
400,557
643,676
Property and equipment, net
880,142
628,537
Operating lease assets
1,817,701
—
Goodwill
25,259
25,259
Intangible assets, net
21,683
22,887
Other noncurrent assets
99,988
121,749
Total assets
$
3,245,330
$
1,442,108
Liabilities and Shareholders'
Equity:
Current liabilities:
Accounts payable
$
194,895
$
120,914
Current operating lease liabilities
97,298
—
Current HPT Leases liabilities
—
42,109
Other current liabilities
153,717
125,668
Total current liabilities
445,910
288,691
Long term debt, net
320,971
320,528
Noncurrent operating lease liabilities
1,898,832
—
Noncurrent HPT Leases liabilities
—
353,756
Other noncurrent liabilities
52,853
28,741
Total liabilities
2,718,566
991,716
Shareholders' equity (8,087 and 8,080
common shares outstanding as of June 30, 2019 and December 31,
2018, respectively)(1)
526,764
450,392
Total liabilities and shareholders'
equity
$
3,245,330
$
1,442,108
(1)
TA's common shares outstanding have been
retrospectively adjusted to reflect the reverse stock split of TA's
outstanding common shares effective August 1, 2019.
These financial statements should be read in
conjunction with TA's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2019, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA INC.
SUPPLEMENTAL SAME SITE OPERATING DATA (dollars and gallons in
thousands, unless indicated otherwise)
The following table presents operating
data for the periods noted for all of the locations in operation on
June 30, 2019, that were operated by TA continuously since the
beginning of the earliest period presented, with the exception of
three 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, the results of TA's
discontinued operations and corporate level selling, general and
administrative expense. 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 Ended June
30,
Six Months Ended June
30,
2019
2018
Change
2019
2018
Change
Number of same site company operated
locations(1)
241
241
—
241
241
—
Diesel sales volume (gallons)
417,930
402,612
3.8
%
818,178
790,506
3.5
%
Gasoline sales volume (gallons)
71,221
74,653
(4.6
) %
131,059
137,840
(4.9
) %
Total fuel sales volume (gallons)
489,151
477,265
2.5
%
949,237
928,346
2.3
%
Fuel revenues
$
1,082,594
$
1,127,213
(4.0
) %
$
2,035,211
$
2,097,030
(2.9
) %
Fuel gross margin(2)
76,289
73,598
3.7
%
150,442
155,754
(3.4
) %
Fuel gross margin per gallon
$
0.156
$
0.154
1.3
%
$
0.158
$
0.168
(6.0
) %
Nonfuel revenues
$
470,663
$
469,367
0.3
%
$
904,890
$
892,085
1.4
%
Nonfuel gross margin
285,272
285,764
(0.2
) %
553,597
547,283
1.2
%
Nonfuel gross margin percentage
60.6
%
60.9
%
(30
)pts
61.2
%
61.3
%
(10
)pts
Total gross margin(2)
$
361,561
$
359,362
0.6
%
$
704,039
$
703,037
0.1
%
Site level operating expense
230,520
226,961
1.6
%
459,141
448,871
2.3
%
Site level operating expense as a
percentage of nonfuel revenues
49.0
%
48.4
%
60
pts
50.7
%
50.3
%
40
pts
Site level gross margin in excess of site
level operating expense(2)
$
131,041
$
132,401
(1.0
) %
$
244,898
$
254,166
(3.6
) %
(1)
Same site operations for the three and six
months ended June 30, 2019, included 227 travel centers, one
standalone truck service facility and 13 standalone restaurants
that TA operated since April 1, 2018 and January 1, 2018,
respectively.
(2)
The amount for the six months ended June
30, 2019, includes $2.8 million of a one time benefit due to the
reversal of loyalty award accruals recognized in connection with
introducing a revised customer loyalty program, and the amount for
the six months ended June 30, 2018, includes the $23.2 million
benefit from the federal biodiesel blenders' tax credit that the
U.S. government retroactively reinstated for 2017 in February 2018.
The U.S. government has not yet reinstated the federal biodiesel
blenders' tax credit for 2018 or 2019.
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. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors, some of which are beyond TA's control. Among others, the
forward-looking statements which appear in this press release that
may not occur include:
- Statements about improved operating results and increased fuel
and nonfuel gross margins may imply that TA's business may be
profitable in the future. However, TA operates in a highly
competitive industry and its business is subject to various market
and other risks and challenges. As a result, TA may fail to be
profitable in the future for these or other reasons. Since TA
became publicly traded in 2007, TA's operations have generated
losses and only occasionally generated profits. TA may be unable to
produce future profits and TA's losses may increase;
- Statements about TA's strategy to refocus its efforts on its
core travel center operations being successful through the first
six months of 2019. This may imply that this strategy will continue
to be successful. TA operates in a dynamic business environment and
its current strategy may not continue to be successful or as
successful as other strategies and TA may fail to execute its
strategy;
- Statements about TA's belief that the U.S. government may
retroactively reinstate the federal biodiesel blenders' tax credit
for 2018 and 2019 before the end of 2019 and the amounts by which
that credit may reduce TA's fuel cost of goods sold in the period
the U.S. government enacts the tax credit reinstatement. However,
the U.S. government may not retroactively reinstate this tax credit
at the level TA expects or at all and TA may not realize the
reductions in its fuel cost of goods sold that it expects; and
- Statements about the franchise agreements TA entered with
franchisees pursuant to which TA expects to add TA branded travel
centers to its network, as well as, the pipeline of site
acquisition opportunities being pursued. These franchise agreements
are subject to conditions and these franchise arrangements may not
occur or may be delayed, and the terms of the arrangements may
change. In addition, acquisition opportunities may not occur or may
subject TA to greater risks than anticipated. These opportunities
may not result in the increased EBITDA and cash flows as
expected.
The information contained in TA's periodic reports, including
TA's Annual Report on Form 10-K for the year ended December 31,
2018, which has been filed with the U.S. Securities and Exchange
Commission, or SEC, and TA's Quarterly Reports on Form 10-Q for the
periods ended March 31, 2019 and June 30, 2019, which have 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190805005178/en/
Katie Strohacker, Senior Director of Investor Relations (617)
796-8251 www.ta-petro.com
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