ROHSTOFF INTERNATIONAL

13:00 | 28.02.2018
TravelCenters of America LLC Announces Fourth Quarter and Full Year 2017 Financial Results

TravelCenters of America LLC (Nasdaq: TA) today announced financial
results for the three months and year ended December 31, 2017:

 

 

 

 

 

(in thousands, except per share and per gallon amounts)

Three Months Ended December 31,

Year EndedDecember 31,

2017
 

 
2016

2017
 

 
2016
Total revenues

$

1,584,765

$

1,408,648

$

6,051,593

$

5,451,124

Loss before income taxes

(27,069

)

(10,849

)

(75,045

)

(3,662

)

Net (loss) income

(20,593

)

(6,545

)

9,394

(1,929

)

Net (loss) income attributable to common shareholders

(20,625

)

(6,493

)

9,262

(2,018

)

 

Net (loss) income per common share attributable to

common shareholders (basic and diluted)

$

(0.52

)

$

(0.17

)

$

0.23

$

(0.05

)

 

Supplemental Data:

Fuel sales volume (gallons):

Diesel fuel

397,445

400,881

1,615,394

1,660,976

Gasoline

132,790

 

134,945

 

536,785

 

544,448

 

Total fuel sales volume

530,235

 

535,826

 

2,152,179

 

2,205,424

 

 

Fuel revenues

$

1,109,758

$

941,852

$

4,090,912

$

3,530,149

Fuel gross margin

97,775

101,050

394,179

404,777

Fuel gross margin per gallon

$

0.184

$

0.189

$

0.183

$

0.184

 

Nonfuel revenues

$

471,158

$

462,579

$

1,944,181

$

1,903,623

Nonfuel gross margin

263,932

256,353

1,084,352

1,053,077

Nonfuel gross margin percentage

56.0

%

55.4

%

55.8

%

55.3

%

 

EBITDA(1)

$

17,438

$

24,049

$

83,333

$

116,542

 
(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.

Andrew J. Rebholz, TA’s CEO, made the following statement regarding the
2017 fourth quarter results:

“TA’s net (loss) income and EBITDA results for both the fourth quarter
and full year of 2017 were impacted by a number of items that affect
comparability with prior year amounts and I believe distract from the
successes TA achieved in our operations in the 2017 fourth quarter.
Those successes include:

Nonfuel revenues in our travel center segment grew by 2.7% in the
fourth quarter of 2017 versus the prior year quarter as our nonfuel
efforts continued to improve, especially in the truck service area. In
the 2017 fourth quarter, compared to the prior year quarter, TA
realized improvements of 6.8% in tire unit sales, 50.6% in RoadSquad
OnSite® mobile maintenance work orders, 6.1% in RoadSquad® roadside
assistance work orders and 20.1% in Reserve-It!® parking reservations
revenue.

Site level gross margin in excess of site level operating expenses in
our convenience store segment grew by 2.7% over the prior year quarter
(1.9 % on a same site basis).

TA also made some management organization changes that I believe will
help our managers focus on controlling costs in the increasingly
difficult competitive environment in which TA conducts its business.

The cost reduction initiatives TA began in the first half of 2017
resulted in approximately $4.6 million of savings in the 2017 fourth
quarter. Many of these cost reductions were implemented during the
second and third quarters of 2017 and I expect some incremental
savings in 2018 from 2017 levels, primarily in the first and second
quarters of 2018.

“For the fourth quarter of 2017, items affecting comparability of TA’s
results to the prior year included $6.9 million of expense related to
asset impairments and write offs, a $6.4 million income tax expense
resulting from the new tax legislation, approximately $6.3 million of
missing tax credit benefits as a result of the biodiesel blenders’ tax
credit not being enacted during 2017 and $1.1 million of expenses
related to retirement agreements with former officers.

“For the 2017 full year, the items affecting comparability with 2016
results included a $58.6 million income tax benefit related to our third
quarter 2017 resolution of previously uncertain tax positions,
approximately $23.3 million of missing tax credit benefit in 2017 due to
the biodiesel blenders’ credit not being enacted during 2017, $16.5
million of expense related to asset impairments and write offs, and $9.7
million of legal expenses in 2017 related to our litigation with Comdata
Inc., or Comdata, as well as the income tax and officer retirement
expenses incurred in the fourth quarter.”
Business Commentary
Fuel sales volume decreased by 5.6 million gallons, or 1.0%, and same
site fuel sales volume decreased by 9.2 million gallons, or 1.8%, each
for the 2017 fourth quarter compared to the 2016 fourth quarter. TA
believes the fuel sales volume decreases experienced during the 2017
fourth quarter resulted primarily from increased competition, partially
offset by recently acquired and developed locations. Fuel
revenues increased by $167.9 million, or 17.8%, in the 2017
fourth quarter compared to the 2016 fourth quarter primarily due to
higher market prices for fuel during the 2017 fourth quarter. Fuel gross
margin decreased by $3.3 million compared to the 2016 fourth quarter
primarily as a result of lower sales volume and the federal biodiesel
fuel tax credit program that was in effect in 2016 but not in 2017. The
federal biodiesel tax credit was retroactively reinstated for 2017 in
legislation passed on February 8, 2018. TA expects to recognize
approximately $23.3 million related to the biodiesel blenders’ credit
reinstatement in the 2018 first quarter financial statements as a
reduction to TA’s fuel cost of goods sold.

Nonfuel revenues increased $8.6 million, or 1.9%, in the 2017
fourth quarter compared to the 2016 fourth quarter, including a $6.9
million increase attributable to sites acquired and developed since the
beginning of the 2016 fourth quarter and a $1.7 million same
site increase. Nonfuel gross margin increased $7.6 million, or 3.0%, in
the 2017 fourth quarter compared to the 2016 fourth quarter due to a
$4.2 million increase from sites acquired and developed since the
beginning of the 2016 fourth quarter and a $3.4 million, or 1.3%,
increase in same site nonfuel gross margin. Nonfuel gross margin
increased on a same site basis primarily as a result of the mix of
products and services sold, partially offset by reduced restaurant
business while TA was converting certain locations from full service to
quick service restaurants, or QSRs, and the impact of closing certain
restaurants during slower night time periods to increase profitability.

Site level operating expenses increased $4.1 million, or 1.7%, in
the 2017 fourth quarter compared to the 2016 fourth quarter primarily
due to a $3.7 million increase in site level operating expenses from
sites acquired and developed since the beginning of
the 2016 fourth quarter. Site level operating expenses as a percentage
of nonfuel revenues remained unchanged for the 2017 fourth quarter
compared to the 2016 fourth quarter at 50.5%.

Selling, general and administrative expenses for
the 2017 fourth quarter increased $2.1 million, or 5.6%, compared to
the 2016 fourth quarter, primarily as a result of increased personnel
costs including approximately $1.1 million of expenses that resulted
from the retirement agreements TA entered during 2017 with former
officers, partially offset by certain cost control initiatives.

Real estate rent expense increased $2.9 million, or 4.3%, in
the 2017 fourth quarter compared to the 2016 fourth quarter, primarily
from TA’s sale to, and lease back from, Hospitality Properties Trust of
a travel center and improvements at leased sites since the beginning of
the 2016 fourth quarter.

Depreciation and amortization expense increased $9.4 million, or 33.8%,
in the 2017 fourth quarter compared to the 2016 fourth quarter primarily
resulting from a $5.4 million impairment charge relating to certain
property and equipment at certain convenience store sites and a $1.5
million write off of certain other assets removed from service in the
fourth quarter.

Net loss for the 2017 fourth quarter was $20.6 million compared to net
loss of $6.5 million for the 2016 fourth quarter. Net loss attributable
to common shareholders for the 2017 fourth quarter was $20.6
million ($0.52 per common share) compared to net loss attributable to
common shareholders of $6.5 million ($0.17 per common share) for
the 2016 fourth quarter. These increased losses in 2017 were primarily
attributable to a $6.4 million income tax expense as a result of the
revaluation of TA’s deferred tax assets and liabilities at the new
corporate income tax rate of 21% established in the Tax Cuts and Jobs
Act enacted in December 2017, a $5.4 million impairment charge relating
to certain property and equipment and a $3.3 million decrease in fuel
gross margin primarily as a result of lower fuel sales volume and the
federal biodiesel fuel tax credit program that was in place in 2016 but
not in 2017. These factors increasing TA’s net loss were partially
offset by a $7.6 million increase in nonfuel gross margin primarily due
to sites acquired and developed since the beginning of the 2016 fourth
quarter and changes in the mix of products and services sold.

EBITDA for the 2017 fourth quarter decreased by $6.6 million, or 27.5%,
as compared to the 2016 fourth quarter, primarily due to a $2.9 million
increase in real estate rent expense, a $2.1 million increase in
selling, general and administrative expenses and a $0.4 million decrease
in site level gross margin in excess of site level operating expenses
from same sites. These changes were partially offset by a $1.5 million
increase in site level gross margin in excess of site level operating
expenses from sites acquired and developed since the beginning of the
2016 fourth quarter.
Travel Centers Segment
Fuel sales volume decreased by 4.2 million gallons, or 0.9%, and same
site fuel sales volume decreased by 8.7 million gallons, or 1.9%, for
the 2017 fourth quarter compared to the 2016 fourth quarter. TA believes
these decreases were primarily due to increased competition. Fuel
revenues increased $151.5 million, or 18.6%, in the 2017 fourth quarter
as compared to the 2016 fourth quarter primarily due to higher market
prices for fuel and from sites acquired and developed since the
beginning of the 2016 fourth quarter. Fuel gross margin decreased by
$4.3 million, or 4.9%, to $83.6 million primarily as a result of the
federal biodiesel fuel tax credit program that was in place in 2016 but
not in 2017.

Nonfuel revenues increased $10.3 million, or 2.7%, in the 2017
fourth quarter compared to the 2016 fourth quarter primarily due to
sites acquired and developed since the beginning of the 2016 fourth
quarter and a $4.8 million, or 1.2%, increase due to same sites; the
same site increase was lowered by reduced restaurant revenues while TA
was converting certain locations from full service restaurants to QSRs
and the impact of closing certain restaurants during slower night time
periods to increase profitability. Nonfuel gross margin increased $7.1
million, or 3.1%, in the 2017 fourth quarter as compared to
the 2016 fourth quarter due to the higher sales level and an increase in
the nonfuel gross margin percentage. Nonfuel gross margin percentage was
59.1% in the 2017 fourth quarter as compared to 58.8% in the 2016 fourth
quarter; the increased nonfuel gross margin percentage was primarily the
result of changes in the mix of products and services sold and the
reduction in operating hours of certain TA restaurants.

Site level gross margin in excess of site level operating
expenses remained essentially unchanged in the 2017 fourth quarter
compared to the 2016 fourth quarter primarily due to decreases at same
sites, offset by increases from recently acquired and developed
properties.

On a same site basis, (223 locations) site level gross margin in excess
of site level operating expenses decreased in the 2017 fourth quarter
by $0.4 million, or 0.4%, as compared to the 2016 fourth quarter,
primarily due to a $5.3 million decrease in fuel gross margin that
resulted primarily from lower sales volume and the federal biodiesel
fuel tax credits that were available to TA in 2016 but were not
available in 2017, partially offset by a $3.9 million increase in
nonfuel gross margin primarily due to changes in the mix of products and
services sold and a $1.0 million reduction in site level operating
expenses primarily due to operating cost control measures, including
reduced billboard advertising and reduced operating hours at certain TA
restaurants.
Convenience Stores Segment
Fuel sales volume decreased by 0.5 million gallons, or 0.8%, for the
2017 fourth quarter as compared to the 2016 fourth quarter on both a
consolidated and same site basis. This decrease was primarily due to
increased competition. Fuel revenues increased $15.6 million, or 14.2%,
in the 2017 fourth quarter as compared to the 2016 fourth quarter
primarily due to higher market prices for fuel. Fuel gross margin
increased by $0.8 million, or 6.3%, to $13.8 million primarily as a
result of the continued improvement of operations at newer locations,
partially offset by a decrease in fuel sales volume.

Nonfuel revenues decreased $2.1 million, or 3.3%, in the 2017
fourth quarter as compared to the 2016 fourth quarter primarily due to
increased competition. Nonfuel gross margin increased $0.1 million, or
0.5%, in the 2017 fourth quarter as compared to the 2016 fourth quarter.
Nonfuel gross margin percentage was 35.2% in the 2017 fourth quarter as
compared to 33.9% in the 2016 fourth quarter. The increases in nonfuel
gross margin and nonfuel gross margin percentage were primarily the
result of changes in the mix of products and services sold.

Site level gross margin in excess of site level operating
expenses increased in the 2017 fourth quarter by $0.3 million, or 2.7%,
as compared to the 2016 fourth quarter primarily due to improvements at
same sites.

On a same site basis, site level gross margin in excess of site level
operating expenses increased by $0.2 million, or 1.9%, in
the 2017 fourth quarter as compared to the 2016 fourth quarter due to
increases in fuel gross margin of $0.8 million, or 6.3%, primarily due
to the continued improvement of operations at newer sites, and nonfuel
gross margin of $0.1 million, or 0.5%, primarily due to changes in the
mix of products and services sold, partially offset by an increase of
$0.8 million, or 2.9%, in site level operating expenses.
Conference Call:
On Wednesday, February 28, 2018, 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 and year ended December 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 10115720.

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 fourth
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 13 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, some fresh foods 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:

MR. REBHOLZ’S STATEMENTS REGARDING THE INCREASED VOLUME OF BUSINESS IN
TA’S TRUCK REPAIR BUSINESS AND THE INCREASED GROSS MARGIN IN TA’S
CONVENIENCE STORE SEGMENT DURING THE FOURTH QUARTER OF 2017 COMPARED
TO THE FOURTH QUARTER OF 2016 MAY IMPLY THAT TA’S TRUCK REPAIR
BUSINESS AND THE GROSS MARGINS REALIZED FROM TA’S CONVENIENCE STORE
SEGMENT WILL CONTINUE TO GROW AND IMPROVE. IN FACT, BOTH TA’S TRUCK
REPAIR BUSINESS AND TA’S CONVENIENCE STORE SEGMENT ARE EXPERIENCING
INCREASED COMPETITION, AND, FOR THIS REASON, AMONG OTHERS, THESE
ASPECTS OF TA’S BUSINESS MAY NOT GROW OR IMPROVE;

MR. REBHOLZ’S STATEMENT THAT TA’S COST REDUCTION INITIATIVES ARE
EXPECTED TO PRODUCE INCREMENTAL SAVINGS IN 2018, PRIMARILY IN THE
FIRST AND SECOND QUARTERS OF 2018, MAY NOT BE REALIZED. COST REDUCTION
INITIATIVES MAY BE OFFSET BY INCREASED EXPENSES OR BY REDUCED VOLUMES
OF BUSINESS. FOR THESE REASONS, AMONG OTHERS, THE IMPLICATION OF MR.
REBHOLZ’S STATEMENT THAT TA’S COST REDUCTION INITIATIVES MAY REDUCE
TA’S HISTORICAL LOSSES OR CREATE PROFITS MAY NOT OCCUR;

THE STATEMENT IN THIS PRESS RELEASE THAT TA EXPECTS TO RECOGNIZE
APPROXIMATELY $23.3 MILLION OF 2017 RETROACTIVE BIODIESEL TAX CREDITS
DURING THE FIRST QUARTER OF 2018 MAY IMPLY THAT TA’S OPERATIONS WILL
PRODUCE PROFITS IN THE FIRST QUARTER OF 2018 OR THAT BIODIESEL TAX
CREDITS WILL IMPROVE TA’S GROSS MARGINS IN THE FUTURE. IN FACT, THE
RETROACTIVE 2017 $23.3 MILLION BIODIESEL TAX CREDIT MAY NOT BE
SUFFICIENT TO OFFSET TA’S OPERATING LOSSES FOR THE FIRST QUARTER OF
2018. ALSO, THE BIODIESEL BLENDERS’ TAX CREDIT HAS NOT BEEN AUTHORIZED
FOR 2018 AND TA DOES NOT KNOW IF, WHEN OR IN WHAT AMOUNTS THIS TAX
CREDIT WILL BE REAUTHORIZED; AND

STATEMENTS IN THIS PRESS RELEASE ABOUT IMPROVED OPERATING RESULTS,
COST SAVINGS AND INCREASING GROSS MARGINS MAY IMPLY THAT TA’S BUSINESS
MAY BE PROFITABLE IN THE FUTURE. IN FACT, TA’S HISTORY OF OPERATIONS
SINCE IT BECAME PUBLICLY OWNED IN 2007 HAS SHOWN ONLY OCCASIONAL
PROFITS. TA MAY BE UNABLE TO PRODUCE FUTURE PROFITS AND TA’S LOSSES
MAY INCREASE.

THE INFORMATION CONTAINED IN TA’S PERIODIC REPORTS, INCLUDING TA’S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2017, WHICH
HAS BEEN OR WILL BE FILED WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION, OR 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 Ended December 31,

2017
 

 
2016Revenues:

Fuel

$

1,109,758

$

941,852

Nonfuel

471,158

462,579

Rent and royalties from franchisees

3,849

 

4,217

 

Total revenues

1,584,765

 

1,408,648

 

 
Cost of goods sold (excluding depreciation):

Fuel

1,011,983

840,802

Nonfuel

207,226

 

206,226

 

Total cost of goods sold

1,219,209

 

1,047,028

 

 
Operating expenses:

Site level operating

237,727

233,653

Selling, general and administrative

39,352

37,265

Real estate rent

70,385

67,460

Depreciation and amortization

37,253

 

27,844

 

Total operating expenses

384,717

 

366,222

 

 
Loss from operations

(19,161

)

(4,602

)

 

Acquisition costs

11

165

Interest expense, net

7,254

7,054

(Loss) income from equity investees

(643

)

972

 
Loss before income taxes

(27,069

)

(10,849

)

Benefit for income taxes

6,476

 

4,304

 
Net loss

(20,593

)

(6,545

)

Less: net income (loss) for noncontrolling interests

32

 

(52

)
Net loss attributable to common shareholders

$

(20,625

)

$

(6,493

)

 
Net loss per common share attributable to common shareholders:

Basic and diluted

$

(0.52

)

$

(0.17

)

 
These financial statements should be read in conjunction with TA’s
Annual Report on Form 10-K for the year ended December 31, 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)

 

Year EndedDecember 31,

2017
 

 
2016Revenues:

Fuel

$

4,090,912

$

3,530,149

Nonfuel

1,944,181

1,903,623

Rent and royalties from franchisees

16,500

 

17,352

 

Total revenues

6,051,593

 

5,451,124

 

 
Cost of goods sold (excluding depreciation):

Fuel

3,696,733

3,125,372

Nonfuel

859,829

 

850,546

 

Total cost of goods sold

4,556,562

 

3,975,918

 

 
Operating expenses:

Site level operating

980,749

959,407

Selling, general and administrative

154,663

139,052

Real estate rent

277,127

262,298

Depreciation and amortization

128,416

 

92,389

 

Total operating expenses

1,540,955

 

1,453,146

 

 
(Loss) income from operations

(45,924

)

22,060

 

Acquisition costs

247

2,451

Interest expense, net

29,962

27,815

Income from equity investees

1,088

 

4,544

 
Loss before income taxes

(75,045

)

(3,662

)

Benefit for income taxes

84,439

 

1,733

 
Net income (loss)

9,394

(1,929

)

Less: net income for noncontrolling interests

132

 

89

 
Net income (loss) attributable to common shareholders

$

9,262

 

$

(2,018

)

 
Net income (loss) per common share attributable to common
shareholders:

Basic and diluted

$

0.23

 

$

(0.05

)

 
These financial statements should be read in conjunction with TA’s
Annual Report on Form 10-K for the year ended December 31, 2017, to be
filed with the U.S. Securities and Exchange Commission.

 

 

 

 

 

TRAVELCENTERS OF AMERICA LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)

 

December 31, 2017

December 31, 2016Assets

Current assets:

Cash and cash equivalents

$

36,082

$

61,312

Accounts receivable, net

125,501

107,246

Inventory

209,640

204,145

Other current assets

27,295

 

29,358

Total current assets

398,518

402,061

 

Property and equipment, net

1,001,090

1,082,022

Goodwill

93,859

88,542

Other intangible assets, net

34,383

37,738

Other noncurrent assets

90,004

 

49,478
Total assets

$

1,617,854

 

$

1,659,841

 
Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$

155,581

$

157,964

Current HPT Leases liabilities

41,389

39,720

Other current liabilities

130,140

 

132,648

Total current liabilities

327,110

330,332

 

Long term debt, net

319,634

318,739

Noncurrent HPT Leases liabilities

368,782

381,854

Other noncurrent liabilities

35,029

 

75,837

Total liabilities

1,050,555

1,106,762

 

Shareholders’ equity (39,984 and 39,523 common shares outstanding at

December 31, 2017 and 2016, respectively)

567,299

 

553,079
Total liabilities and shareholders’ equity

$

1,617,854

 

$

1,659,841

 
These financial statements should be read in conjunction with TA’s
Annual Report on Form 10-K for the year ended December 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
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. TA calculates EBITDA as earnings
before interest, taxes and depreciation and amortization, as shown
below. This information should not be considered as an alternative to
net (loss) income attributable to common shareholders, net (loss) income
or (loss) 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) 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 months and years
ended December 31, 2017 and 2016.

 

 

 

 

 

Three Months Ended December 31,

Year EndedDecember 31,

2017
 

 
2016

2017
 

 
2016
Calculation of EBITDA:

Net (loss) income

$

(20,593

)

$

(6,545

)

$

9,394

$

(1,929

)

Add: benefit for income taxes

(6,476

)

(4,304

)

(84,439

)

(1,733

)

Add: depreciation and amortization

37,253

27,844

128,416

92,389

Add: interest expense, net

7,254

 

7,054

 

29,962

 

27,815

 

EBITDA

$

17,438

 

$

24,049

 

$

83,333

 

$

116,542

 

 

TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME SITE OPERATING DATA(in
thousands, except for number of locations, percentage amounts and fuel
gross margin per gallon)
CONSOLIDATED SAME SITE OPERATING DATA
The following table presents consolidated operating data for the periods
noted for all of the locations in operation on December 31, 2017, that
were operated by TA continuously since the beginning of the earliest
period presented, with the exception of six 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 Ended December 31,

Year EndedDecember 31,

2017
 

 
2016

Change

2017
 

 
2016

Change
Number of same site company

operated locations(1)

463

463

420

420

 

Diesel sales volume (gallons)

389,961

396,288

(1.6

) %

1,571,099

1,629,055

(3.6

) %

Gasoline sales volume (gallons)

126,437

 

129,339

 

(2.2

) %

483,360

 

497,169

 

(2.8

) %

Total fuel sales volume (gallons)

516,398

 

525,627

 

(1.8

) %

2,054,459

 

2,126,224

 

(3.4

) %

 

Fuel revenues

$

1,080,928

$

923,414

17.1

%

$

3,902,495

$

3,396,269

14.9

%

Fuel gross margin

96,352

100,805

(4.4

) %

380,820

396,741

(4.0

) %

Fuel gross margin per gallon

$

0.187

$

0.192

(2.6

) %

$

0.185

$

0.187

(1.1

) %

 

Nonfuel revenues

$

463,646

$

461,941

0.4

%

$

1,836,051

$

1,836,157

%

Nonfuel gross margin

258,574

255,222

1.3

%

1,025,542

1,018,381

0.7

%

Nonfuel gross margin percentage

55.8

%

55.2

%

60

pts

55.9

%

55.5

%

40

pts

 

Total gross margin

$

354,926

$

356,027

(0.3

) %

$

1,406,362

$

1,415,122

(0.6

) %

Site level operating expenses

233,764

234,458

(0.3

) %

926,104

930,142

(0.4

) %

Site level operating expenses as a

percentage of nonfuel revenues

50.4

%

50.8

%

(40

)pts

50.4

%

50.7

%

(30

)pts

Site level gross margin in excess of

site level operating expenses

$

121,162

$

121,569

(0.3

) %

$

480,258

$

484,980

(1.0

) %

 
(1) Same site operations for the three months ended December
31, 2017, include 223 travel centers, 229 convenience stores and 11
standalone restaurants that TA operated since October 1, 2016. Same site
operations for the year ended December 31, 2017, include 220 travel
centers and 200 convenience stores that TA operated since January 1,
2016. The 11 standalone restaurants are not a separately reportable
segment but are included in corporate and other in our segment
information.

TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME SITE OPERATING DATA(in
thousands, except for number of locations, percentage amounts and fuel
gross margin per gallon)
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 December 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 Ended December 31,
 

 

 

 
Year EndedDecember 31,
 

 

Travel Centers

2017
 

 
2016

Change

2017
 

 
2016

Change
Number of same site company

operated travel center locations

223

223

220

220

 

Diesel sales volume (gallons)

384,474

391,477

(1.8

) %

1,552,959

1,612,405

(3.7

) %

Gasoline sales volume (gallons)

68,938

 

70,655

 

(2.4

) %

274,398

 

281,285

 

(2.4

) %

Total fuel sales volume (gallons)

453,412

 

462,132

 

(1.9

) %

1,827,357

 

1,893,690

 

(3.5

) %

 

Fuel revenues

$

955,787

$

813,866

17.4

%

$

3,472,078

$

3,011,216

15.3

%

Fuel gross margin

82,536

87,810

(6.0

) %

329,399

348,554

(5.5

) %

Fuel gross margin per gallon

$

0.182

$

0.190

(4.2

) %

$

0.180

$

0.184

(2.2

) %

 

Nonfuel revenues

$

393,345

$

388,515

1.2

%

$

1,597,954

$

1,596,816

0.1

%

Nonfuel gross margin

231,651

227,792

1.7

%

940,724

935,140

0.6

%

Nonfuel gross margin percentage

58.9

%

58.6

%

30

pts

58.9

%

58.6

%

30

pts

 

Total gross margin

$

314,187

$

315,602

(0.4

) %

$

1,270,123

$

1,283,694

(1.1

) %

Site level operating expenses

203,754

204,776

(0.5

) %

826,705

833,323

(0.8

) %

Site level operating expenses as a

percentage of nonfuel revenues

51.8

%

52.7

%

(90

)pts

51.7

%

52.2

%

(50

)pts

Site level gross margin in excess of

site level operating expenses

$

110,433

$

110,826

(0.4

) %

$

443,418

$

450,371

(1.5

) %

 

TRAVELCENTERS OF AMERICA LLCSUPPLEMENTAL SAME SITE OPERATING DATA(in
thousands, except for number of locations, percentage amounts and fuel
gross margin per gallon)
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 December 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 Ended December 31,

Year EndedDecember 31,

Convenience Stores

2017
 

 
2016

Change

2017
 

 
2016

Change
Number of same site company

operated convenience store

locations

229

229

200

200

 

Fuel sales volume (gallons)

62,986

63,495

(0.8

) %

227,102

232,534

(2.3

) %

Fuel revenues

$

125,141

$

109,548

14.2

%

$

430,417

$

385,053

11.8

%

Fuel gross margin

13,816

12,995

6.3

%

51,421

48,187

6.7

%

Fuel gross margin per gallon

$

0.219

$

0.205

6.8

%

$

0.226

$

0.207

9.2

%

 

Nonfuel revenues

$

63,715

$

65,859

(3.3

) %

$

238,097

$

239,341

(0.5

) %

Nonfuel gross margin

22,448

22,326

0.5

%

84,818

83,241

1.9

%

Nonfuel gross margin percentage

35.2

%

33.9

%

130

pts

35.6

%

34.8

%

80

pts

 

Total gross margin

$

36,264

$

35,321

2.7

%

$

136,239

$

131,428

3.7

%

Site level operating expenses

26,608

25,847

2.9

%

99,399

96,819

2.7

%

Site level operating expenses as a

percentage of nonfuel revenues

41.8

%

39.2

%

260

pts

41.7

%

40.5

%

120

pts

Site level gross margin in excess of

site level operating expenses

$

9,656

$

9,474

1.9

%

$

36,840

$

34,609

6.4

%

 

TRAVELCENTERS OF AMERICA LLCBUSINESS SEGMENT INFORMATION
(UNAUDITED)(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 and years ended December 31, 2017 and 2016.

 

 

 

Three Months Ended December 31, 2017

TravelCenters
 

 
ConvenienceStores
 

 
Corporateand Other
 

 
ConsolidatedRevenues:

Fuel

$

965,366

$

125,141

$

19,251

$

1,109,758

Nonfuel

399,011

63,715

8,432

471,158

Rent and royalties from franchisees

2,917

 

53

 

879

 

3,849

 

Total revenues

1,367,294

 

188,909

 

28,562

 

1,584,765

 

 
Site level gross margin in excess ofsite level operating expenses

$

115,230

 

$

9,729

 

$

2,870

 

$

127,829

 

 
Corporate operating expenses:

Selling, general and administrative

$

39,352

$

39,352

Real estate rent

70,385

70,385

Depreciation and amortization

37,253

 

37,253

 
Loss from operations

(19,161

)

 

Acquisition costs

11

11

Interest expense, net

7,254

7,254

Loss from equity investees

(643

)

(643

)
Loss before income taxes

(27,069

)

Benefit for income taxes

6,476

 

6,476

 
Net loss

(20,593

)

Less: net income for noncontrolling interests

32

 
Net loss attributable to common shareholders

$

(20,625

)

Supplemental data:

 

 

 

 

 

 

 

 

 

 

 

 

 
Gross margin:

Fuel

$

83,634

$

13,816

$

325

$

97,775

Nonfuel

235,746

22,448

5,738

263,932

Rent and royalties from franchisees

2,917

 

53

 

879

 

3,849

Total gross margin

$

322,297

 

$

36,317

 

$

6,942

 

$

365,556

 

Site level operating expenses

$

207,067

 

$

26,588

 

$

4,072

 

$

237,727

 

 

 

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)

(in thousands)

 

Three Months Ended December 31, 2016

TravelCenters
 

 
ConvenienceStores
 

 
Corporateand Other
 

 
ConsolidatedRevenues:

Fuel

$

813,899

$

109,548

$

18,405

$

941,852

Nonfuel

388,670

65,859

8,050

462,579

Rent and royalties from franchisees

3,072

 

57

 

1,088

 

4,217

 

Total revenues

1,205,641

 

175,464

 

27,543

 

1,408,648

 

 
Site level gross margin in excess ofsite level operating expenses

$

115,267

 

$

9,472

 

$

3,228

 

$

127,967

 

 
Corporate operating expenses:

Selling, general and administrative

$

37,265

$

37,265

Real estate rent

67,460

67,460

Depreciation and amortization

27,844

 

27,844

 
Loss from operations

(4,602

)

 

Acquisition costs

165

165

Interest expense, net

7,054

7,054

Income from equity investees

972

 

972

 
Loss before income taxes

(10,849

)

Benefit for income taxes

4,304

 

4,304

 
Net loss

(6,545

)

Less: net loss for noncontrolling interests

(52

)
Net loss attributable to common shareholders

$

(6,493

)

Supplemental data:

 

 

 

 

 

 

 

 

 

 

 

 

 
Gross margin:

Fuel

$

87,915

$

12,995

$

140

$

101,050

Nonfuel

228,601

22,326

5,426

256,353

Rent and royalties from franchisees

3,072

 

57

 

1,088

 

4,217

Total gross margin

$

319,588

 

$

35,378

 

$

6,654

 

$

361,620

 

Site level operating expenses

$

204,321

 

$

25,906

 

$

3,426

 

$

233,653

 

 

 

 

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)
(in thousands)

 

Year Ended December 31, 2017

TravelCenters
 

 
ConvenienceStores
 

 
Corporateand Other
 

 
ConsolidatedRevenues:

Fuel

$

3,533,121

$

480,917

$

76,874

$

4,090,912

Nonfuel

1,636,009

269,854

38,318

1,944,181

Rent and royalties from franchisees

12,304

 

215

 

3,981

 

16,500

 

Total revenues

5,181,434

 

750,986

 

119,173

 

6,051,593

 

 
Site level gross margin in excess ofsite level operating expenses

$

463,833

 

$

40,554

 

$

9,895

 

$

514,282

 

 
Corporate operating expenses:

Selling, general and administrative

$

154,663

$

154,663

Real estate rent

277,127

277,127

Depreciation and amortization

128,416

 

128,416

 
Loss from operations

(45,924

)

 

Acquisition costs

247

247

Interest expense, net

29,962

29,962

Income from equity investees

1,088

 

1,088

 
Loss before income taxes

(75,045

)

Benefit for income taxes

84,439

 

84,439

 
Net income

9,394

Less: net income for noncontrolling interests

132

 
Net income attributable to common shareholders

$

9,262

 

Supplemental data:

 

 

 

 

 

 

 

 

 

 

 

 

 
Gross margin:

Fuel

$

336,253

$

57,227

$

699

$

394,179

Nonfuel

964,438

94,516

25,398

1,084,352

Rent and royalties from franchisees

12,304

 

215

 

3,981

 

16,500

Total gross margin

$

1,312,995

 

$

151,958

 

$

30,078

 

$

1,495,031

 

Site level operating expenses

$

849,162

 

$

111,404

 

$

20,183

 

$

980,749

 

 

 

TRAVELCENTERS OF AMERICA LLC

BUSINESS SEGMENT INFORMATION (UNAUDITED)

(in thousands)

 

Year Ended December 31, 2016

TravelCenters
 

 
ConvenienceStores
 

 
Corporateand Other
 

 
ConsolidatedRevenues:

Fuel

$

3,036,861

$

420,747

$

72,541

$

3,530,149

Nonfuel

1,615,405

263,577

24,641

1,903,623

Rent and royalties from franchisees

13,628

 

306

 

3,418

 

17,352

 

Total revenues

4,665,894

 

684,630

 

100,600

 

5,451,124

 

 
Site level gross margin in excess ofsite level operating expenses

$

468,912

 

$

36,660

 

$

10,227

 

$

515,799

 

 
Corporate operating expenses:

Selling, general and administrative

$

139,052

$

139,052

Real estate rent

262,298

262,298

Depreciation and amortization

92,389

 

92,389

 
Income from operations

22,060

 

Acquisition costs

2,451

2,451

Interest expense, net

27,815

27,815

Income from equity investees

4,544

 

4,544

 
Loss before income taxes

(3,662

)

Benefit for income taxes

1,733

 

1,733

 
Net loss

(1,929

)

Less: net income for noncontrolling interests

89

 
Net loss attributable to common shareholders

$

(2,018

)

Supplemental data:

 

 

 

 

 

 

 

 

 

 

 

 
Gross margin:

Fuel

$

352,361

$

51,900

$

516

$

404,777

Nonfuel

946,308

90,047

16,722

1,053,077

Rent and royalties from franchisees

13,628

 

306

 

3,418

 

17,352

Total gross margin

$

1,312,297

 

$

142,253

 

$

20,656

 

$

1,475,206

 

Site level operating expenses

$

843,385

 

$

105,593

 

$

10,429

 

$

959,407

 

View source version on businesswire.com: http://www.businesswire.com/news/home/20180228005279/en/


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