WESTLAKE, Ohio — TravelCenters of America Inc. (TA) cited the company's durability and resilience as reasons for its strong performance during the third quarter of 2022, with CEO Jonathan Pertchik expressing confidence that solid results are sustainable and repeating despite operating in a challenging, uncertain environment.
"We see a bright future for TA and are just beginning to hit our stride with growth and innovation," Pertchik said during the company's Nov. 2 earnings call.
Healthy topline growth resulted in significant increases in both net income and operating cash flow, according to Pertchik. He noted that once again, the latest quarter's earnings are compared to 2021 growth which itself was a significant improvement over 2020 results, "which makes this quarter's results even more impressive against a difficult high performance comparative period."
He acknowledged that while TA has reported 11 quarters of "excellent performance" in a row, the company faces increasingly challenging comparisons. However, company officials believe that operational excellence, and growth and innovation plans will continue to drive solid multiyear improvements that are both consistent and resilient.
During Q3 2022, TA saw a 67 percent improvement in net income to $37 million, a 36 percent improvement in adjusted EBITDA to $88.6 million and a 57 percent increase in adjusted trailing 12-month EBITDA to $320 million vs. the prior year period.
"While fuel margin remained a robust component of this quarter's results, broad strength and innovation can be found throughout our business, frankly overcoming significant inflationary forces that are affecting the broader economy," Pertchik said.
TA saw "robust" revenue from truck services during the quarter, with substantial growth coming from its mobile maintenance business, which involves large repair vehicles and technicians working within the yards of its large fleet customers.
"We see truck service as an important differentiator and growth driver for the future of TA with new initiatives ranging from heavy duty trailer repair, footprint expansion, new technology and improving tech retention and efficiency, all designed to harness this unique and differentiated business," Pertchik said.
Inside its stores, TA continues to "thoughtfully increase" prices to offset inflationary labor and operating cost pressures, which it expects to persist into and through much of 2023.
At the same time, the company sees opportunity for many of its new initiatives, such as TA's customer loyalty program, improving food operations, merchandising efficiency and leveraging technology to reduce friction, improve the customer experience and benefit margins.
During Q3 2022, TA completed the acquisitions of three travel centers, one truck service facility and certain assets of a travel center that the company owns but previously leased and franchised. Acquisitions remain a core component of TA's expanded network growth strategy while franchises are a key focus, with the company targeting 30 to 35 franchise openings annually.
"Our ongoing investment in growth initiatives is designed to drive performance in 2023 and beyond, with a focus on site refreshes, technology initiatives and network expansion, which includes a total of five travel centers and two truck service facilities acquired thus far in 2022 and 16 franchise agreements signed," Pertchik said.
Fifteen previously signed franchise locations are expected to begin operations in 2023.
Westlake-based TravelCenters of America Inc. has more than 19,000 team members at 275-plus locations in 44 states and Canada, principally under the TA, Petro Stopping Centers and TA Express brands. Its offerings include diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants, travel stores, car and truck parking, and other services. The company's specialized business unit, eTA, focuses on sustainable energy options for professional drivers and motorists, while leveraging alternative energy to support its own operations.