TravelCenters of America (TA) Misses Q4 EPS by 8c, Revenues Miss

TravelCenters of America (NASDAQ: TA) reported Q4 EPS of ($0.17), $0.08 worse than the analyst estimate of ($0.09). Revenue for the quarter came in at $1.53 billion versus the consensus estimate of $1.6 billion.

• Loss from Continuing Operations for the Quarter Improved by $6.9 million, or 49.9%
• Sale of Minit Mart Stores Generated Net Proceeds of $319.9 million
• Purchase of 20 Travel Centers Reduced Annual Rent by $43.1 million

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."

For earnings history and earnings-related data on TravelCenters of America (TA) click here.

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