TravelCenters of America (TA) Tops Q1 EPS by 3c, Revenues Miss

TravelCenters of America (NASDAQ: TA) reported Q1 EPS of ($0.36), $0.03 better than the analyst estimate of ($0.39). Revenue for the quarter came in at $1.43 billion versus the consensus estimate of $1.47 billion.

Andrew J. Rebholz, TA's CEO, made the following statement regarding the 2019 first quarter results:

"We believe our operating results for the first quarter of 2019 demonstrated that the business initiatives and plans we outlined earlier this year are continuing to succeed. During the 2019 first quarter both fuel sales volume and nonfuel revenues showed solid growth, improving by 3.0% and 4.0%, respectively, in total and by 2.0% and 2.7%, respectively, on a same site basis as compared to the prior year quarter. These improvements were aided by our introduction of our revamped UltraONE 2.0 loyalty program that customers are embracing. Designed to incentivize and reward customers for their loyalty while providing the TA full service array of redemption offers to suit customers’ varying needs, this program attracted approximately 30,000 new and reactivated members in the first quarter. In addition, we kept our site level operating expense in line with our nonfuel revenue increases, experiencing only a slight 20 basis point increase in the ratio of those expenses to nonfuel revenues that is due in part to increased staffing in advance of increased business in our truck service programs.

"While we sustained a net loss for the quarter of $12.7 million that is $2.7 million more than the prior year quarter, the net loss for the 2019 first quarter is less than it was in the first quarter of 2018 after removing the effects of the one time items included in each period\'s GAAP results. Adjusted EBITDA for 2019 of $11.4 million is an improvement of $14.3 million over the 2018 first quarter. It is worth noting that a net loss is not unusual for our first quarter because the first quarter typically generates our weakest financial results given the seasonality in our business.

"Our efforts to reduce leverage following the December 2018 sale of our standalone convenience stores business culminated in the January 2019 transactions with Hospitality Properties Trust that reduced our annual minimum rent payable to HPT by $43.1 million and contributed to our improved adjusted loss from continuing operations and adjusted EBITDA, as well as to a $10.0 million increase over the 2018 first quarter in our cash provided by operations.

"Additionally, our network expansion program is underway. Thus far in 2019, we have signed franchise agreements for four sites and have a robust pipeline of potential additional franchisees. This success to date buoys our confidence that our network expansion can be a largely asset-light growth area, although we do also have a pipeline of site acquisition opportunities being pursued. I believe the momentum of the first quarter’s results combined with the strength of our business 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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