TravelCenters of America LLC (Nasdaq: TA) today announced
financial results for the three and six months ended June 30,
2017:
(in
thousands, except per share and per gallon
amounts unless indicated otherwise)
Three Months EndedJune 30, Six Months
EndedJune 30, 2017 2016 2017
2016 Total revenues $ 1,498,668 $ 1,430,008 $
2,889,434 $ 2,579,830 (Loss) income before income taxes (5,346 )
5,570 (54,062 ) (10,051 ) Net (loss) income attributable to common
shareholders
(3,013 ) 3,521 (32,437 ) (6,423 ) Net (loss) income per
common share attributable
to common shareholders (basic and
diluted)
$ (0.08 ) $ 0.09 $ (0.82 ) $ (0.17 ) Supplemental Data: Fuel
sales volume (gallons): Diesel fuel 412,629 418,519 807,334 840,919
Gasoline 139,718 142,635 259,169 261,239
Total fuel sales volume (gallons) 552,347 561,154
1,066,503 1,102,158 Total fuel revenues
$ 990,265 $ 931,211 $ 1,925,561 $ 1,640,739 Fuel gross margin
105,810 101,993 191,395 193,694 Fuel gross margin per gallon $
0.192 $ 0.182 $ 0.179 $ 0.176 Total nonfuel revenues $
504,096 $ 494,467 $ 955,470 $ 930,485 Nonfuel gross margin 280,129
272,175 535,504 516,490 Nonfuel gross margin percentage 55.6 % 55.0
% 56.0 % 55.5 % EBITDA(1) $ 31,141 $ 33,632 $ 21,609 $
45,357
(1) A reconciliation from net (loss) income to earnings before
interest, taxes and depreciation and amortization, or EBITDA,
appears in the supplemental data below. TA believes that net (loss)
income 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 second quarter results:
"During the second quarter of 2017 our dispute with
FleetCor/Comdata increased our operating expenses by about $5.3
million in legal fees and what we believe to be excessive fuel card
transaction fees. The status of our dispute with FleetCor/Comdata
remained unchanged since the time of our first quarter report: we
are awaiting a ruling from the Delaware Court of Chancery.
"We incurred about $1.3 million of site level operating expenses
during the 2017 second quarter that we did not incur in the second
quarter of 2016 in connection with certain operating initiatives,
particularly in staffing our commercial tire efforts and to expand
the capacity of our RoadSquad business.
"Our efforts to achieve stabilized results at our recently
acquired locations continued largely as expected for our travel
centers and restaurants, but we have encountered certain challenges
at our convenience stores, including challenges that are impacting
the convenience store industry generally. While I believe these
challenges may increase the time it will take TA to achieve
expected results at these stores, I believe TA's fuel pricing,
merchandising and cost control strategies will continue positively
impacting our financial results at these stores.
"Last quarter I reported that TA had identified certain cost
savings initiatives that would begin to be realized in the second
half of 2017. These initiatives have begun and we are starting to
see the benefits in our financial results."
Second Quarter 2017 Business
Commentary
Fuel sales volume decreased by 8.8 million gallons, or 1.6%, and
same site fuel sales volume decreased by 11.1 million gallons, or
2.0%, each in the 2017 second quarter compared to the 2016 second
quarter. TA believes fuel volume decreases experienced during the
2017 second quarter resulted from comparatively weak consumer
demand for gasoline, a relatively weak trucking freight environment
and especially continued fuel efficiency gains and especially by
TA's commercial diesel fuel customers. Fuel revenue increased by
$59.1 million, or 6.3%, in the 2017 second quarter compared to the
2016 second quarter primarily due to higher market prices for fuel
during the 2017 second quarter compared to the 2016 second quarter.
Fuel gross margin increased by $3.8 million ($0.010 per gallon), to
$105.8 million ($0.192 per gallon) primarily as a result of
increased fuel gross margin per gallon achieved as a result of
declining fuel prices during the 2017 second quarter and the impact
of TA's pricing and purchasing strategies.
Nonfuel revenue increased $9.6 million, or 1.9%, in the 2017
second quarter compared to the 2016 second quarter due to a $7.1
million increase attributable to sites acquired and developed since
the beginning of the 2016 second quarter and a $2.5 million same
site increase due to favorable effects of certain pricing and
marketing initiatives. Nonfuel gross margin increased $8.0 million,
or 2.9%, in the 2017 second quarter compared to the 2016 second
quarter due to a $4.1 million increase from sites acquired and
developed since the beginning of the 2016 second quarter, and a
$3.9 million, or 1.5%, increase in same site nonfuel gross margin.
Same site nonfuel gross margin in the 2017 second quarter was 55.4%
of nonfuel revenue, compared to 54.9% in the 2016 second 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 $8.8 million, or 3.6%,
in the 2017 second quarter compared to the 2016 second quarter
primarily due to a $4.9 million increase from sites acquired and
developed since the beginning of the 2016 second quarter and what
TA believes to be excess transaction fees of $2.8 million TA
incurred related to the dispute with FleetCor Technologies, Inc.
and its subsidiary Comdata Inc., or FleetCor/Comdata. On a same
site basis, site level operating expenses as a percentage of
nonfuel revenues increased versus the prior year quarter by 50
basis points to 50.0%. The change in this percentage is primarily
due to the increased transaction fees being charged by
FleetCor/Comdata.
Selling, general and administrative expenses for the 2017 second
quarter increased $1.9 million, or 5.2%, compared to the 2016
second quarter, primarily attributable to litigation costs of $2.5
million related to TA's dispute with FleetCor/Comdata.
Real estate rent expense increased $4.4 million, or 6.8%, in the
2017 second quarter compared to the 2016 second quarter primarily
from TA's sale to, and lease back from, Hospitality Properties
Trust, or HPT, of five travel centers and improvements at leased
sites since the beginning of the 2016 second quarter.
Depreciation and amortization expense increased $7.3 million,
or 34.4%, in the 2017 second quarter compared to the 2016
second quarter primarily resulting from the locations acquired and
other capital investments TA completed (and did not subsequently
sell to HPT) since the beginning of the 2016 second quarter. The
increase was partially offset by the reduction in TA's depreciable
assets as a result of the sale to, and lease back from, HPT of two
travel centers in June 2016.
Interest expense, net, increased by $1.1 million, or 16.3%, in
the 2017 second quarter compared to the 2016 second quarter
primarily due to capitalizing a smaller amount of total interest
expense as a result of a reduced amount of assets under
construction in the 2017 second quarter compared to the 2016 second
quarter.
Net loss attributable to common shareholders for the 2017 second
quarter was $3.0 million ($0.08 per common share) compared to net
income attributable to common shareholders of $3.5 million ($0.09
per common share) for the 2016 second quarter. EBITDA for the 2017
second quarter decreased by $2.5 million, or 7.4%, as compared to
the 2016 second quarter. A reconciliation from net (loss) income 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 $60.9 million, or 5.0%, in the 2017
second quarter as compared to the 2016 second quarter. The increase
in total revenues was primarily due to increases in market prices
for fuel and from sales at recently developed properties opened in
2016 and 2017.
Site level gross margin in excess of site level operating
expenses increased in the 2017 second quarter by $2.3 million, or
1.9%, as compared to the 2016 second quarter primarily due to a
$5.0 million increase in nonfuel gross margin and a $2.5 million
increase in fuel gross margin, partially offset by what TA believes
to be excess transaction fees of $2.8 million being charged by
FleetCor/Comdata.
On a same site basis, site level gross margin in excess of site
level operating expenses increased by $2.8 million, or 2.4%, in the
2017 second quarter compared to the 2016 second quarter due to
increases in nonfuel ($3.3 million) and fuel ($2.5 million) gross
margin, which primarily resulted from an increase in fuel
gross margin per gallon achieved as a result of declining fuel
prices during the 2017 second quarter and the impact of TA's
pricing and purchasing strategies, partially offset by an increase
in site level operating expenses ($3.0 million) primarily due to
what TA believes to be excess transaction fees being charged by
FleetCor/Comdata.
Convenience Stores Segment
Both fuel and nonfuel revenues increased, resulting in an
increase in total revenues of $5.3 million, or 2.8%, in the 2017
second quarter compared to the 2016 second quarter. The increase in
total revenues was primarily due to the impact of the five
locations acquired since the beginning of the 2016 second quarter
and increases in market prices for fuel.
Site level gross margin in excess of site level operating
expenses increased in the 2017 second quarter by $1.1 million, or
10.8%, as compared to the 2016 second quarter due to improvements
in operating results at same sites and locations acquired since the
beginning of the 2016 second quarter.
On a same site basis, site level gross margin in excess of site
level operating expenses increased by $0.9 million, or 8.5%, in the
2017 second quarter compared to the 2016 second quarter due to
increases in fuel ($1.2 million) and nonfuel ($0.6 million) gross
margin, which primarily resulted from the impact of TA's continued
improvements at recently acquired sites, 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 June 30, 2017, TA has invested $895.3
million to develop, purchase and improve travel centers,
convenience stores and standalone restaurants. For the 12 months
ended June 30, 2017, these investments produced site level
gross margin in excess of site level operating expenses of $103.5
million, which, on a sequential basis, was $1.0 million, or 1.0%,
more than the site level gross margin in excess of site level
operating expenses for the 12 months ended March 31, 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 37 travel centers during the 2011 to June 30,
2017, period. Of these stores, 36 are included in the "Travel
Centers Segment Same Site Operating Data" for the six months ended
June 30, 2017 and 2016. As of June 30, 2017, TA invested
$313.4 million (including the cost of improvements) in these 36
locations, and these locations generated $53.2 million of site
level gross margin in excess of site level operating expenses
during the 12 months ended June 30, 2017. TA also developed
four travel centers for a total investment of $95.9 million, and
these locations generated $4.9 million of site level gross margin
in excess of site level operating expenses during the 12 months
ended June 30, 2017; TA operated these locations on average
for less than a full year as of June 30, 2017 (one opened in each
of January, March and May 2016, and March 2017).
TA acquired 228 convenience stores during the 2013 to
June 30, 2017, period. Of these stores, 199 are included in
the "Convenience Store Segment Same Site Operating Data" for the
six months ended June 30, 2017 and 2016. As of June 30,
2017, TA invested $394.4 million (including the cost of
improvements) in these 199 locations, and these locations generated
$33.5 million of site level gross margin in excess of site level
operating expenses during the 12 months ended June 30, 2017.
The remaining 29 locations were acquired by TA in 2016 for a total
investment of $49.0 million (including the cost of improvements),
and these convenience stores generated $3.2 million of site level
gross margin in excess of site level operating expenses during the
12 months ended June 30, 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
June 30, 2017.
TA acquired one standalone restaurant during 2015 and 48 during
2016 (38 of which were operated by franchisees), and in 2017
acquired six of those 48 from one of TA's franchisees. As of
June 30, 2017, TA invested $42.0 million (including the cost
of improvements) in these 49 locations, and these locations
generated $8.7 million of site level gross margin in excess of site
level operating expenses during the 12 months ended June 30,
2017.
Other Growth Initiatives
In addition to the investments in new locations described above,
TA made capital expenditures of $58.8 million during the six months
ended June 30, 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 June 30, 2017.
Approximately $34.9 million of these expenditures are considered by
TA to be investments designed to provide incremental returns. 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. The remainder, or $23.9 million, is considered by TA to be
investments to maintain TA's competitive position.
Conference Call:
On Tuesday, August 8, 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 June 30, 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
10110436.
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 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 14 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 COST
SAVINGS BEGINNING IN THE SECOND HALF OF 2017, AND EXPRESSIONS OF
HIS CONFIDENCE IN GENERATING IMPROVED FINANCIAL RESULTS FROM
RECENTLY ACQUIRED LOCATIONS MAY IMPLY THAT TA'S INITIATIVES WILL
GENERATE INCREASED OPERATING INCOME. HOWEVER, THE EXPECTED
INCREASED MARGINS OR DECREASED EXPENSES MAY BE DELAYED, 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 EXCESS TRANSACTION FEES OR OTHER COSTS. 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
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 ONGOING, AND UNLESS THE COURT
DECIDES IN TA'S FAVOR OR A NEW AGREEMENT IS ACHIEVED, TA EXPECTS
THAT FLEETCOR/COMDATA IS LIKELY TO CONTINUE TO IMPOSE ON TA
INCREASED TRANSACTION FEES IN EXCESS OF THE TRANSACTION FEES
PREVIOUSLY PAID PURSUANT TO ITS MERCHANT AGREEMENT (SUCH EXCESS
FEES AVERAGED $0.9 MILLION PER MONTH IN THE MONTHS FEBRUARY THROUGH
JUNE 2017), AND THAT TA WILL CONTINUE TO INCUR SIGNIFICANT COSTS
RELATED TO THIS LITIGATION UNTIL IT IS COMPLETED. WHILE TA
CURRENTLY EXPECTS THIS LITIGATION MAY BE CONCLUDED DURING THE THIRD
QUARTER OF 2017, IT MAY NOT BE. IN ADDITION, DESPITE TA'S BELIEF IN
THE MERITS OF ITS POSITIONS IN THIS LITIGATION, TA MAY NOT PREVAIL
IN THIS LITIGATION. IF TA DOES NOT PREVAIL IN THIS LITIGATION, TA
WILL NO LONGER HAVE A MERCHANT AGREEMENT WITH FLEETCOR/COMDATA AND,
IF TA DOES NOT THEN ENTER A NEW MERCHANT AGREEMENT WITH
FLEETCOR/COMDATA, TA MAY LOSE A MATERIAL AMOUNT OF FUTURE BUSINESS
FROM ITS CUSTOMERS WHO USE COMDATA ISSUED FUEL CARDS, THE RESULT OF
WHICH COULD HAVE A MATERIAL ADVERSE AFFECT ON TA'S BUSINESS,
FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS. EVEN IF
TA PREVAILS IN THIS LITIGATION, TA MAY NEED TO REACH A NEW
AGREEMENT WITH FLEETCOR/COMDATA REGARDING FEES BEFORE TA'S MERCHANT
AGREEMENT EXPIRES ACCORDING TO ITS PRESENT TERMS ON JANUARY 2,
2022. MOREOVER, THE CONTINUATION OF THIS LITIGATION IS DISTRACTING
TO TA'S MANAGEMENT AND IT IS EXPENSIVE, AND THIS DISTRACTION AND
EXPENSE MAY CONTINUE BEYOND THE ISSUANCE OF A RULING FROM THE COURT
BECAUSE OF DELAYS, APPEALS OR OTHERWISE;
- THIS PRESS RELEASE DISCLOSES CERTAIN
INVESTMENTS TA MADE DURING THE SIX MONTHS ENDED JUNE 30, 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 OPERATING INITIATIVES. 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 REPORTS ON FORM 10-Q FOR THE
PERIODS ENDED MARCH 31, 2017 AND JUNE 30, 2017, 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.
TRAVELCENTERS OF AMERICA LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share
amounts)
Three Months EndedJune 30, 2017
2016 Revenues: Fuel $ 990,265 $ 931,211 Nonfuel
504,096 494,467 Rent and royalties from franchisees 4,307
4,330 Total revenues 1,498,668 1,430,008
Cost of goods sold (excluding depreciation): Fuel
884,455 829,218 Nonfuel 223,967 222,292 Total cost of
goods sold 1,108,422 1,051,510
Operating
expenses: Site level operating 252,946 244,120 Selling, general
and administrative 37,877 36,009 Real estate rent 69,144 64,736
Depreciation and amortization 28,649 21,322 Total
operating expenses 388,616 366,187
Income
from operations 1,630 12,311 Acquisition costs 63 1,092
Interest expense, net 7,838 6,740 Income from equity investees 925
1,091
(Loss) income before income taxes (5,346
) 5,570 Benefit (provision) for income taxes 2,380 (1,985 )
Net (loss) income (2,966 ) 3,585 Less: net income for
noncontrolling interests 47 64
Net (loss) income
attributable to common shareholders $ (3,013 ) $ 3,521
Net (loss) income per common share attributable to common
shareholders: Basic and diluted $ (0.08 ) $ 0.09
These financial statements should be read in conjunction with
TA's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share
amounts)
Six Months EndedJune 30, 2017
2016 Revenues: Fuel $ 1,925,561 $ 1,640,739 Nonfuel
955,470 930,485 Rent and royalties from franchisees 8,403
8,606 Total revenues 2,889,434 2,579,830
Cost of goods sold (excluding depreciation): Fuel
1,734,166 1,447,045 Nonfuel 419,966 413,995 Total
cost of goods sold 2,154,132 1,861,040
Operating expenses: Site level operating 498,861 478,170
Selling, general and administrative 78,689 66,975 Real estate rent
137,143 128,265 Depreciation and amortization 60,449 41,847
Total operating expenses 775,142 715,257
(Loss) income from operations (39,840 ) 3,533
Acquisition costs 203 2,061 Interest expense, net 15,222 13,561
Income from equity investees 1,203 2,038
Loss
before income taxes (54,062 ) (10,051 ) Benefit for income
taxes 21,695 3,692
Net loss (32,367 ) (6,359 )
Less: net income for noncontrolling interests 70 64
Net loss attributable to common shareholders $ (32,437 ) $
(6,423 )
Net loss per common share attributable to common
shareholders: Basic and diluted $ (0.82 ) $ (0.17 )
These financial statements should be read in conjunction with
TA's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017, to be filed with the U.S. Securities and
Exchange Commission.
TRAVELCENTERS OF AMERICA LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
June 30, 2017 December 31,
2016 Assets Current assets: Cash and cash equivalents
$ 76,625 $ 61,312 Accounts receivable, net 115,417 107,246
Inventory 197,131 204,145 Other current assets 26,292 29,358
Total current assets 415,465 402,061 Property and equipment,
net 1,023,032 1,082,022 Goodwill 89,698 88,542 Other intangible
assets, net 35,510 37,738 Other noncurrent assets 60,988
49,478
Total assets $ 1,624,693 $ 1,659,841
Liabilities and Shareholders' Equity Current liabilities:
Accounts payable $ 154,010 $ 157,964 Current HPT Leases liabilities
40,432 39,720 Other current liabilities 148,515 132,648
Total current liabilities 342,957 330,332 Long term debt,
net 319,183 318,739 Noncurrent HPT Leases liabilities 375,792
381,854 Other noncurrent liabilities 63,447 75,837 Total
liabilities 1,101,379 1,106,762 Shareholders' equity (39,556
and 39,523 common shares outstanding
at June 30, 2017 and December 31, 2016,
respectively)
523,314 553,079
Total liabilities and shareholders'
equity $ 1,624,693 $ 1,659,841
These financial statements should be read in conjunction with
TA's Quarterly Report on Form 10-Q for the quarter ended
June 30, 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 (loss) income attributable to
common shareholders, net (loss) income or income (loss) 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) income 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)
income for the three and six months ended June 30, 2017 and
2016.
Three Months
EndedJune 30, Six Months EndedJune 30,
2017 2016 2017 2016
Calculation of EBITDA: Net (loss) income $ (2,966 ) $ 3,585 $
(32,367 ) $ (6,359 ) Add: (benefit) provision for income taxes
(2,380 ) 1,985 (21,695 ) (3,692 ) Add: depreciation and
amortization 28,649 21,322 60,449 41,847 Add: interest expense, net
7,838 6,740 15,222 13,561 EBITDA $
31,141 $ 33,632 $ 21,609 $ 45,357
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
June 30, 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 EndedJune
30, Six Months EndedJune 30, 2017
2016 Change 2017 2016
Change
Number of same site company
operated locations
446 446 — 420 420 — Diesel sales volume (gallons) 406,394
413,285 (1.7 ) % 787,862 827,595 (4.8 ) % Gasoline sales volume
(gallons) 130,924 135,169 (3.1 ) % 233,504
240,904 (3.1 ) % Total fuel sales volume (gallons) 537,318
548,454 (2.0 ) % 1,021,366 1,068,499
(4.4 ) % Fuel revenues $ 962,124 $ 908,518 5.9 % $ 1,842,440
$ 1,585,835 16.2 % Fuel gross margin 104,801 101,128 3.6 % 186,275
190,722 (2.3 ) % Fuel gross margin per gallon $ 0.195 $ 0.184 6.0 %
$ 0.182 $ 0.178 2.2 % Nonfuel revenues $ 487,771 $ 485,258
0.5 % $ 905,427 $ 907,220 (0.2 ) % Nonfuel gross margin 270,234
266,324 1.5 % 509,051 504,561 0.9 % Nonfuel gross margin percentage
55.4 % 54.9 % 50 pts 56.2 % 55.6 % 60 pts Total gross margin
$ 375,035 $ 367,452 2.1 % $ 695,326 $ 695,283 — % Site level
operating expenses 243,923 240,036 1.6 % 472,630 466,996 1.2 % Site
level operating expenses as a
percentage of nonfuel revenues
50.0 % 49.5 % 50 pts 52.2 % 51.5 % 70 pts Site level gross margin
in excess
of site level operating expenses
$ 131,112 $ 127,416 2.9 % $ 222,696 $ 228,287 (2.4 ) %
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 June 30, 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 EndedJune
30, Six Months EndedJune 30, Travel
Centers 2017 2016 Change
2017 2016 Change Number of same site
company
operated travel center locations
222 222 — 220 220 — Diesel sales volume (gallons) 401,691
408,578 (1.7 ) % 779,801 819,917 (4.9 ) % Gasoline sales volume
(gallons) 71,700 73,480 (2.4 ) % 131,424
134,598 (2.4 ) % Total fuel sales volume (gallons) 473,391
482,058 (1.8 ) % 911,225 954,515 (4.5 )
% Fuel revenues $ 843,443 $ 790,390 6.7 % $ 1,640,405 $
1,406,259 16.7 % Fuel gross margin 89,696 87,213 2.8 % 162,157
168,000 (3.5 ) % Fuel gross margin per gallon $ 0.189 $ 0.181 4.4 %
$ 0.178 $ 0.176 1.1 % Nonfuel revenues $ 417,902 $ 416,095
0.4 % $ 788,307 $ 791,728 (0.4 ) % Nonfuel gross margin 245,827
242,517 1.4 % 467,495 464,237 0.7 % Nonfuel gross margin percentage
58.8 % 58.3 % 50 pts 59.3 % 58.6 % 70 pts Total gross margin
$ 335,523 $ 329,730 1.8 % $ 629,652 $ 632,237 (0.4 ) % Site level
operating expenses 215,872 212,876 1.4 % 422,650 418,790 0.9 % Site
level operating expenses as a
percentage of nonfuel revenues
51.7 % 51.2 % 50 pts 53.6 % 52.9 % 70 pts Site level gross margin
in excess
of site level operating expenses
$ 119,651 $ 116,854 2.4 % $ 207,002 $ 213,447 (3.0 ) %
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
June 30, 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 EndedJune
30, Six Months EndedJune 30, Convenience
Stores 2017 2016 Change 2017
2016 Change Number of same site company
operated convenience store
locations
224 224 — 200 200 — Total acquisition cost and
initial renovation investment
at end of period
$ 432,376 $ 420,568 2.8 % $ 394,349 $ 385,772 2.2 % Fuel
sales volume (gallons) 63,927 66,396 (3.7 ) % 110,141 113,984 (3.4
) % Fuel revenues $ 118,681 $ 118,128 0.5 % $ 202,035 $ 179,576
12.5 % Fuel gross margin 15,105 13,915 8.6 % 24,118 22,722 6.1 %
Fuel gross margin per gallon $ 0.236 $ 0.210 12.4 % $ 0.219 $ 0.199
10.1 % Nonfuel revenues $ 69,869 $ 69,163 1.0 % $ 117,120 $
115,492 1.4 % Nonfuel gross margin 24,407 23,807 2.5 % 41,556
40,324 3.1 % Nonfuel gross margin percentage 34.9 % 34.4 % 50 pts
35.5 % 34.9 % 60 pts Total gross margin $ 39,512 $ 37,722
4.7 % $ 65,674 $ 63,046 4.2 % Site level operating expenses 28,051
27,160 3.3 % 49,980 48,206 3.7 % Site level operating expenses as a
percentage of nonfuel revenues
40.1 % 39.3 % 80 pts 42.7 % 41.7 % 100 pts Site level gross margin
in excess
of site level operating expenses
$ 11,461 $ 10,562 8.5 % $ 15,694 $ 14,840 5.8 %
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 and six months ended June 30, 2017 and 2016.
Three Months
Ended June 30, 2017 TravelCenters
ConvenienceStores Corporateand
Other Consolidated Revenues: Fuel $
848,289 $ 122,287 $ 19,689 $ 990,265 Nonfuel 421,741 71,884 10,471
504,096 Rent and royalties from franchisees 3,189 54
1,064 4,307 Total revenues 1,273,219 194,225
31,224 1,498,668
Site level gross
margin in excess ofsite level operating expenses $
122,942 $ 11,707 $ 2,651 $ 137,300
Corporate operating expenses: Selling, general and
administrative $ 37,877 $ 37,877 Real estate rent 69,144 69,144
Depreciation and amortization 28,649 28,649
Income
from operations 1,630 Acquisition costs 63 63 Interest
expense, net 7,838 7,838 Income from equity investees 925
925
Loss before income taxes (5,346 ) Benefit for
income taxes 2,380 2,380
Net loss (2,966 )
Less: net income for noncontrolling interests 47
Net loss
attributable tocommon shareholders $ (3,013 )
Supplemental data:
Gross
margin Fuel $ 90,235 $ 15,535 $ 40 $ 105,810 Nonfuel 248,140
25,115 6,874 280,129 Rent and royalties from franchisees 3,189
54 1,064 4,307 Total gross margin $ 341,564
$ 40,704 $ 7,978 $ 390,246 Site level
operating expenses $ 218,622 $ 28,997 $ 5,327
$ 252,946
TRAVELCENTERS OF AMERICA LLC
BUSINESS SEGMENT INFORMATION
(in thousands)
Three
Months Ended June 30, 2016 TravelCenters
ConvenienceStores Corporateand
Other Consolidated Revenues: Fuel $
792,016 $ 119,193 $ 20,002 $ 931,211 Nonfuel 417,168 69,673 7,626
494,467 Rent and royalties from franchisees 3,176 57
1,097 4,330 Total revenues 1,212,360 188,923
28,725 1,430,008
Site level gross
margin in excess ofsite level operating expenses $
120,667 $ 10,568 $ 3,143 $ 134,378
Corporate operating expenses: Selling, general and
administrative $ 36,009 $ 36,009 Real estate rent 64,736 64,736
Depreciation and amortization 21,322 21,322
Income
from operations 12,311 Acquisition costs 1,092 1,092
Interest expense, net 6,740 6,740 Income from equity investees
1,091 1,091
Income before income taxes 5,570
Provision for income taxes (1,985 ) (1,985 )
Net income
3,585 Less: net income for noncontrolling interests 64
Net income attributable tocommon shareholders $ 3,521
Supplemental data:
Gross margin Fuel
$ 87,731 $ 14,057 $ 205 $ 101,993 Nonfuel 243,139 23,929 5,107
272,175 Rent and royalties from franchisees 3,176 57
1,097 4,330 Total gross margin $ 334,046 $ 38,043
$ 6,409 $ 378,498 Site level operating
expenses $ 213,379 $ 27,475 $ 3,266 $ 244,120
TRAVELCENTERS OF AMERICA LLC
BUSINESS SEGMENT INFORMATION
(in thousands)
Six
Months Ended June 30, 2017 TravelCenters
ConvenienceStores Corporateand
Other Consolidated Revenues: Fuel $
1,662,430 $ 225,993 $ 37,138 $ 1,925,561 Nonfuel 803,153 132,586
19,731 955,470 Rent and royalties from franchisees 6,218 108
2,077 8,403 Total revenues 2,471,801
358,687 58,946 2,889,434
Site level
gross margin in excess ofsite level operating expenses $
214,505 $ 17,070 $ 4,866 $ 236,441
Corporate operating expenses: Selling, general and
administrative $ 78,689 $ 78,689 Real estate rent 137,143 137,143
Depreciation and amortization 60,449 60,449
Loss
from operations (39,840 ) Acquisition costs 203 203
Interest expense, net 15,222 15,222 Income from equity investees
1,203 1,203
Loss before income taxes (54,062 )
Benefit for income taxes 21,695 21,695
Net
loss (32,367 ) Less: net income for noncontrolling interests 70
Net loss attributable tocommon shareholders $
(32,437 )
Supplemental data:
Gross
margin Fuel $ 164,489 $ 26,780 $ 126 $ 191,395 Nonfuel 476,351
46,230 12,923 535,504 Rent and royalties from franchisees 6,218
108 2,077 8,403 Total gross margin $ 647,058
$ 73,118 $ 15,126 $ 735,302 Site level
operating expenses $ 432,553 $ 56,048 $ 10,260
$ 498,861
TRAVELCENTERS OF AMERICA LLC
BUSINESS SEGMENT INFORMATION
(in thousands)
Six
Months Ended June 30, 2016 TravelCenters
ConvenienceStores Corporateand
Other Consolidated Revenues: Fuel $
1,414,596 $ 191,824 $ 34,319 $ 1,640,739 Nonfuel 798,351 123,796
8,338 930,485 Rent and royalties from franchisees 7,318 191
1,097 8,606 Total revenues 2,220,265
315,811 43,754 2,579,830
Site level
gross margin in excess ofsite level operating expenses $
221,698 $ 14,939 $ 3,983 $ 240,620
Corporate operating expenses: Selling, general and
administrative $ 66,975 $ 66,975 Real estate rent 128,265 128,265
Depreciation and amortization 41,847 41,847
Income
from operations 3,533 Acquisition costs 2,061 2,061
Interest expense, net 13,561 13,561 Income from equity investees
2,038 2,038
Loss before income taxes (10,051 )
Benefit for income taxes 3,692 3,692
Net loss
(6,359 ) Less: net income for noncontrolling interests 64
Net loss attributable tocommon shareholders $ (6,423
)
Supplemental data:
Gross margin Fuel $ 169,531 $ 23,846 $ 317 $ 193,694 Nonfuel
468,122 42,706 5,662 516,490 Rent and royalties from franchisees
7,318 191 1,097 8,606 Total gross margin $
644,971 $ 66,743 $ 7,076 $ 718,790 Site
level operating expenses $ 423,273 $ 51,804 $ 3,093
$ 478,170
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808005270/en/
TravelCenters of America LLCKatie Strohacker, 617-796-8251Senior
Director of Investor Relationswww.ta-petro.com
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