TravelCenters of America LLC (NASDAQ:TA) said today that it nearly halved its loss from continuing operations in the fourth quarter as gross margins from site-level operations exceeded operating expenses by $10.8 million.
The Westlake, Ohio-based truckstop and travel center operator, the largest publicly traded company of its kind, posted a loss of nearly $7 million in the fourth quarter from ongoing operations, compared with a $13.9 million deficit in the corresponding 2017 quarter. Net losses were reduced 71.4 percent quarter-over-quarter, while earnings before interest, taxes, depreciation and amortization (EBITDA) increased 50 percent to $20.7 million, the company reported.
Total fourth quarter fuel volume, measured in gallons, increased 0.8 percent, with diesel volume up 2 percent to more than 400 million gallons, the company said. Total fuel revenue increased nearly 12 percent as prices rose and volumes picked up, TA said. Same-site fuel volume fell 0.5 percent quarter-over-quarter due to gains in fuel efficiency and increased competition, TA reported.
Non-fuel revenue rose 3.9 percent, according to the company. The ratio of site-level expenses to non-fuel revenues rose as the company spent more to recruit and train truck repair technicians ahead of an expected increase in volume, the company said.
By far TA’s biggest move of the quarter was its finalized sale in December of its stand-alone convenience stores business to British retailer EG Group for $321 million, net of expenses. Last month, the company spent $308 million to acquire 20 leased travel centers from Hospitality Properties Trust (HPT), TA’s main landlord. TA said the transaction would reduced its minimum annual rental payments to HPT by $43 million. It still leases 179 locations from HPT. TA operates about 250 travel centers in 43 U.S. states and in Canada.
TA chief executive officer Andrew J. Rebholz said the moves late last year and so far in 2019 were critical to “refocus the business back to our core travel center customer and (to) reduce leverage.”
Earlier this year, TA converted four locations to a “smaller-format” TA Express brand.