TravelCenters America made money during the third quarter and is continuing its expansion and refurbishing plans
View full sizeThe front of the TravelCenter located in Lodi, Ohio. The travel centers cater to all travelers, families, business and especially truckers. WESTLAKE - TravelCenters America today reported a net income of $15.8 million, or 53 cents per share for the three months ending Sept. 30.
During the same period in 2012, the company reported a net income of $18.9 million, or 66 cents per share.
Total revenues - including revenues from retail fuel sales and revenues from non-fuel merchandise and services were about the same during the third quarter of each year, just over $2 billion. The volume of fuel sold in the third quarter of this year was up about 4 percent and (profit) margins increased about 5 percent.
For the first nine months of the year, TA reported a net income of $19.6 million, or 66 per share - about 43 percent of the $34.7 million, or $1.20 per share earned during the first nine months of 2012.
The company attributed the third quarter $3.2 million, or 16.8 percent, decease in net income largely to expenses associated with the expansion and refurbishing of its truck stop network that it began two years ago.
Since the beginning of 2011, the company has spent or committed to spend a total of $265 million buying and refurbishing 30 travel center locations and today oversees 247 truck stops and travel facilities under the TravelCenters of America, TA and Petro names.
"During the third quarter of 2013, we continued to successfully execute on our business strategy. Both fuel gross margin per gallon and . . . (earnings before expenses) increased year over year, and we continue to make progress acquiring new travel center sites and integrating them into our nationwide network," Thomas O'Brien, CEO, said in a prepared statement accompanying the financial report.
TA had acquired six new service centers by the end of the third quarter, O'Brien told analysts during a public teleconference. Another four centers were pending.
He said the company is also looking at building new centers on seven undeveloped, or greenfield, properties it has owned since 2007. "We expect to seek to move forward with development if the economy continues as I currently expect. I hope to begin construction late in 2014 or in early 2015."
But competition has also been fierce, he said, including "pressure from some of our principle competitors' efforts to retain of gain volume as a result of the turmoil affecting our largest competitor."
Among TA's competitors is the Pilot Flying J chain, owned by Jimmy Haslam and his family. Haslam also owns the Cleveland Browns. Pilot is currently caught up in a federal investigation of how the company handled rebates with fuel customers.
"During the second and third quarters of 2013, TA's primary competitors engaged in aggressive sales efforts to maintain and grow market share, which negatively impacted our fuel sales volume and fuel gross margin per gallon during the period," O'Brien said.
The company discussed the results with analysts during 10 a.m. public teleconference Monday, available here on the company's website.