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WESTLAKE, Ohio -- Strong fuel margins, foodservice sales and positive results from newly acquired locations led TravelCenters of America LLC (TA) to what the company said was an excellent year in 2011.
"2011 was a banner year for TA's financial results," said Thomas O'Brien, the company's CEO, said during an earnings conference call this morning.
TA suffered a $2.48-million loss during its fiscal fourth quarter, but that figure was a massive improvement compared to the $30-million loss it had in the same time period in 2011. For the entire year of 2011, TA earned a net profit of $23.58 million vs. a loss of $66.69 million for fiscal year 2010.
Revenues increased dramatically for TA's latest quarter, ending Dec. 31, as well as its fiscal year. The travel center operator had $1.92 billion in revenues for its Q4, compared to $1.56 billion during the same period last year. For the year, TA earned $7.88 billion in revenues vs. $5.96 billion in 2010.
O'Brien said there were several reasons why TA outperformed its 2010 quarterly and annual results. Continued steadiness of fuel margins -- at about 15 cents per gallon -- was one. Also cited was a 7.5-percent growth in non-fuel sales and the performance of the eight new sites TA acquired in 2011.
"We expect 2012 to be a profitable year," noted O'Brien. "Foodservice is one place that has been exciting for us. [Also], we've been improving sites, which has gone really well."
This winter's warm weather could be one possible obstacle in the way of strong 2012 earnings. Although warm weather is often considered a boon to convenience store sales, the story is different for truck service locations. Truck fleets often need more repairs during cold weather periods, which helps TA's bottom line, O'Brien said.
However, O'Brien said his company is on top of that factor. "We need to work harder [to get repairs], but we are doing a really good job," he said.
O'Brien also remarked that TA's financial position will remain solid, as the company sports a $100-million cash position.
Regarding compressed natural gas (CNG), which some consider to be the fuel alternative of the future, TA said it will continue to monitor it.
"We're at the early stages of real availability with CNG," said O'Brien. "It's compelling. We're pretty well positioned to not fall behind our competitors as demand increases."
TravelCenters of America has 237 sites, with 168 operating with its eponymous or TA banner, and 69 operated under the Petro brand name.