TA Plans to Purchase More Travel Centers
WESTLAKE, Ohio -- TravelCenters of America LLC (TA) continues to take advantage of the distressed real estate market by scooping up additional locations, CEO Thomas O'Brien said during the company's 2012 fourth-quarter earnings call this morning.
TA bought 12 travel centers in 2012 and so far this year, the company has picked up an additional four locations -- two of which already opened, he noted. Looking forward, the chief executive said the company will continue to aggressively acquire more travel centers.
TA lost $2.45 million in its fourth quarter, ended Dec. 31. That figure is very similar to the $2.47 million the travel center lost in its 2011 fourth quarter. O'Brien acknowledged that he expected the loss because the company's fiscal first and fourth quarters are always its weakest. Hence, he predicted TA will report a loss for its 2013 first quarter, but will be profitable for the year.
For the full 2012 year, TA earned a net income of $32.1 million vs. a profit of $23.5 million in 2011.
In addition to the highly profitable summer trucking season, O'Brien reported that the company is making several changes to drive profits even further. One such change is converting all TA locations to branded gasoline sites. Currently, all but six of the company's travel centers have been converted to branded gasoline locations. Three of the remaining sites will become branded locations soon, the CEO stated.
In addition, TA's Reserve-It reserved parking space program has been a great source of income for the company and has received excellent feedback, O'Brien relayed. Fifty-nine travel centers now offer Reserve-It, which was introduced last year.
Looking at TA's most recent quarter more closely, the company's fuel sales decreased by 2.3 percent compared to its 2011 fourth quarter. O'Brien cited TA's exit from the wholesale fuel business for one-third of the decline. Meanwhile, non-fuel sales increased to $324 million, compared to $307 million during the same timeframe last year.
As for future projects, TA hopes to work with Shell to open natural gas sites across America. "We continue to talk, but nothing has been signed yet," O'Brien noted.
TA originally planned to report its 2012 fourth quarter earnings last week. When questioned by an analyst during the earnings call as to the reason for the delay, O'Brien said the holdup was due to normal auditing reasons only.
TravelCenters of America LLC operated a total of 243 sites as of Dec. 31, including 171 operating under the TravelCenters of America or TA brand names, and 72 operating under the Petro name.