TravelCenters of America Inc. (Nasdaq: TA) today announced that
it has commenced a company-wide reorganization, which is a key step
in the Company’s strategic, long-term plan to improve its
operational efficiency and profitability.
The reorganization plan includes significant leadership changes
with the addition of new Senior Vice Presidents for a newly created
hospitality department, under which the areas of restaurants,
gaming and convenience stores will be consolidated, as well as in
information technology.
TA has also appointed a new Senior Vice President of corporate
development, a new department initially tasked with delivering on
the Company’s reorganizational initiatives. Key among these
initiatives is the creation of a centralized procurement group to
drive economies of scale in pricing, provide increased leverage in
vendor negotiations, and ultimately lead to substantial purchasing
savings and a streamlined operation. Other key initiatives are
focused in areas of opportunity for realizing both costs savings
and increased revenues, including merchandising in the convenience
stores, over-the-road delivery, truck repair training and staffing
and IT systems.
These new leaders bring decades of valuable experience as well
as initiative, critical skills and new visions and approaches to
these critical, but underperforming, areas of TA’s business. In
addition, as part of its reorganization plan, TA is reducing its
corporate headcount by a total of approximately 130 and eliminating
certain positions. These changes are expected to generate net
annual savings of approximately $13.1 million in selling, general
and administrative, or SG&A, expense.
“Since joining TA in December, I, together with TA’s senior
level management, and under the oversight and direction of TA’s
Board of Directors, have been focused on developing a plan to
cost-effectively optimize the strengths of our organization in
order to transform the Company,” said Jon Pertchik, Chief Executive
Officer of TA. “By reorganizing and enhancing our leadership team,
we have taken the first formal steps in executing TA’s turnaround
by repositioning management, redefining management roles and
operating focus, and strategically adding new management who bring
new and valuable experiences, skills and outlooks to TA, while also
focusing on right-sizing historical SG&A growth, which has
significantly outpaced revenue growth over the past decade. I am
confident that the team that we now have in place is the one to
take TA forward.”
“We have worked hard on planning and developing the
reorganization and transition plan announced today. I believe that
this plan will result in major changes in efficiencies and
improvements to TA’s business and position it well for future
success.” added Mr. Pertchik.
Senior Leaders Joining
TA
Kevin Kelly – Senior Vice President,
Hospitality (Retail, Restaurant, Gaming). Mr. Kelly is joining
TA from Delaware North, a global food service and hospitality
company, where he held progressive leadership roles over the past
22 years. His most recent role was as President of Travel
Hospitality, in which he led a subsidiary consisting of over 250
food service and retail locations in 19 airports and oversaw the
construction of 120 locations. Dennis King – Senior Vice
President, Corporate Development. An experienced commercial and
strategy leader with a proven record of building high performing
teams and executing transformative change, Mr. King was most
recently an Associate Partner at McKinsey & Company. Mr. King
has over 15 years of experience leading transformations in retail
and consumer companies, with a deep expertise in advanced
analytics, strategic evaluation, and cost and revenue synergy
realization. Sandy Rapp – Chief Information Officer / Senior
Vice President, Information Technology. Ms. Rapp is an
information systems and business executive with over 30 years of
experience in software development, consumer products, IT
consulting, financial and manufacturing industries. Most recently
serving as Chief Information Officer at the Timken Company, Ms.
Rapp has been recognized in her prior roles for solving large,
complex enterprise-wide business challenges with innovative
solutions and improving business productivity.
The one-time cost associated with executing the reorganization
plan are expected to be approximately $4.2 million, which will be
recognized as selling, general and administrative expense. The
costs comprised primarily of severance, outplacement services,
stock-based compensation expense associated with the accelerated
vesting of previously granted stock awards for certain employees
and fees for recruitment of certain executive positions. During the
2020 first quarter, TA recognized $0.4 million of executive
recruitment fees and expects to recognize the remainder of the
costs during the 2020 second quarter.
About TravelCenters of
America
TravelCenters of America Inc. (Nasdaq: TA) is the nation's
largest publicly traded full-service travel center network. Founded
in 1972 and headquartered in Westlake, Ohio, its more than 21,000
employees serve customers in over 260 locations in 44 states and
Canada, principally under the TA®, Petro Stopping Centers® and TA
Express® brands. Offerings include diesel and gasoline fuel, truck
maintenance and repair, full-service and quick-service restaurants,
car and truck parking and other services and amenities dedicated to
providing great experiences for professional drivers and the
general motoring public. TravelCenters of America operates nearly
650 full-service and quick-service restaurants and 10 proprietary
brands, including Quaker Steak and Lube®, Iron Skillet® and Country
Pride®. For more information, visit www.ta-petro.com.
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.
Also, 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. For example:
- This press release indicates several benefits that TA and its
Chief Executive Officer, Jon Pertchik, expect TA to realize as a
result of the reorganization plan announced today. However, there
can be no assurance that TA will realize these benefits, including
TA may not realize the annual cost savings it expects, its new
management and changes in TA’s operating focus may not produce the
results TA expects, and the costs for implementing and executing
the reorganization plan may be more than TA expects. Further, TA
may not realize improved operating results despite its
reorganization plan due to various factors and risks applicable to
TA’s business, many of which are outside its control.
The information contained in TA’s filings with the Securities
and Exchange Commission, or SEC, including under “Risk Factors” in
TA’s periodic reports, or incorporated therein, identifies other
important factors that could cause TA’s actual results to differ
materially from those stated in or implied by 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 statements as a result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200501005243/en/
Investors: Kristin Brown
Director, Investor Relations TravelCenters of America 617-796-8251
kbrown@ta-petro.com Media: Tina
Arundel Manager, Corporate Communications TravelCenters of America
216-389-3028 tarundel@ta-petro.com
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