TravelCenters of America Announces 4Q and Full Year Results

TravelCenters of America LLC announced financial results for the three months and year ended December 31, 2018

Andrew J. Rebholz, TA’s CEO, made the following statement regarding the 2018 fourth quarter results:

“For the fourth quarter of 2018, we had a loss from continuing operations of $7.0 million, which is an improvement of $6.9 million, or 49.9%, over the prior year quarter. Net loss for the 2018 fourth quarter improved by $14.8 million, or 71.4%, and adjusted EBITDA for the 2018 fourth quarter of $20.7 million was up by $7.0 million, or 50.8%, in each case compared to the prior year fourth quarter. Despite ongoing technological and competitive headwinds, we grew total fuel sales volume by 0.8% and total nonfuel revenues by 3.9%. One soft spot in our fourth quarter operating results was related to site level operating expenses; our ratio of these expenses to nonfuel revenues increased. This resulted from higher labor costs as we recruited and trained truck repair technicians ahead of the increased business volume we expect.

“As important to me as the operating improvements is the fact that we made significant strides in our efforts to refocus the business back to our core travel center customer and reduce leverage. In December 2018, we closed on the sale of our standalone convenience stores business and in January 2019 utilized most of the proceeds from that sale to purchase 20 previously leased travel centers from Hospitality Properties Trust, or HPT, our primary landlord, and reduce our annual minimum rent payable to HPT by $43.1 million. We established a third brand in our travel center network by converting four existing locations to the smaller format TA Express brand announced earlier this year. Thus far in 2019, we have entered a franchise agreement to add a TA Express site to our network and an agreement to add up to five more TA Express sites to our network. Looking ahead, our plans include continuing to grow our travel center network and to extend our RoadSquad®, RoadSquad OnSite® and TA Commercial Tire Network™ to more customers, in addition to other marketing programs. We believe our plans will translate to increased EBITDA and cash flow this year.”

Growth Strategies

In January and February of 2019, TA signed agreements with a prospective franchisee pursuant to which TA expects to add up to six TA Express branded travel centers to its network, four within the coming 12 months, one within five years and one within ten years.

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