Skip to main content

TravelCenters of America Records Better Q1 Revenue, But Net Loss

WESTLAKE, Ohio -- TravelCenters of America LLC (TA), operator of 166 TravelCenters of America and 63 Petro travel stops, reported revenues of $1.38 billion for its first quarter ended March 31, 2010, compared to $967 million for the period a year prior.

Still, the travel plaza operator recorded a net loss of $41 million, compared to $18 million for the first quarter of 2009.

Total fuel sales reached $1.19 billion, compared to from $704 million in first quarter of 2009. Fuel gross margin dollars, however, were $50.2 million, compared to $60.46 million the year before. Nonfuel sales for the quarter hit $261.7 million, up a bit from the $259.3 million for the first quarter a year ago. Nonfuel gross margin dollars were nearly $151.46 million, compared with $152.7 million in 2009.

"During the three months ended March 31, 2010, the continued difficult economic conditions in the U.S. presented TA with significant operating challenges," the company said in a statement. "TA's results for the first quarter of 2010 compared to the first quarter of 2009 reflected unfavorable changes in net loss, which increased by $23.2 million, and in EBITDAR, which declined by $19.6 million.

"Although other factors have an effect, fuel gross margins tend to be lower during periods of rising fuel prices and higher during periods of falling fuel prices. Fuel commodity prices gradually rose in 2009 and through the first quarter of 2010. As a result, TA's fuel gross margin was $10.2 million lower in the first quarter of 2010 than the first quarter of 2009."

Operating expenses increased as a percentage of nonfuel sales on a same-site basis, primarily due to increases in self-insurance claim costs that are unrelated to sales levels, plus increases in certain credit card transaction fees resulting from increased fuel sales levels and fuel prices and increased maintenance costs.

TA attributed the 9.1-percent increase in same-quarter, same-site fuel sales volume to increased trucking activity.

During the three months, TA invested $6.1 million in capital projects and received $1.8 million of funding from its principal landlord, Hospitality Properties Trust (HPT), under the terms of the tenant improvements allowance with no corresponding increase in rent. TA's current capital plan for 2010 anticipates expenditures of approximately $63 million, some of which may be funded by HPT under TA's lease agreements. As of March 31, 2010, $5.4 million of funding remained available, without an increase in rent payments, under the tenant improvements allowance from HPT.

Pursuant to an arrangement with HPT, TA has the option to defer up to $5 million of rent for each month during 2010. Any deferred rent and interest thereon not previously paid are due July 1, 2011. TA has taken all deferrals available to date, including $15 million to date in 2010, $60 million during 2009 and $30 million during 2008.

As of March 31, TA had approximately $155.3 million in cash and cash equivalents. TA also maintains a $100 million revolving secured bank credit facility. As of the end of the quarter, no amounts were outstanding under this facility, but a substantial portion of the facility was utilized to support letters of credit required by TA in the ordinary course of its business.

Related News:

TravelCenters of America, McLane Renew Contract

TravelCenters of America Unveils New Services

TravelCenters of America Renews Target Media Partners

This ad will auto-close in 10 seconds