TA - Earnings call transcript Q1 2019 | TravelCenters of America Inc

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Operator

Good day, and welcome to the TravelCenters of America First Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Katie Strohacker, Senior Director of Investor Relations. ahead. go Please

Katie Strohacker

morning, Good Thank everyone. you.

Officer, We will from Chief Barry analysts. remarks also Financial TA's call Officer, today's Richards; time Andy questions Chief Officer, with Executive Operating Rebholz; from Chief We'll begin followed for Myers. Bill and have by

ASC be remarks discussing meaning of XXXX standard the call that and as Securities the treatment Today's ASC can forward-looking found Among expectations as prepared by the Act lease conference XX-K or XXXX. include today section of legacy Litigation about today, based SEC we forward-looking Reform X, Securities in February the Federal FXX found beliefs filed Page XXXX XXX,of at referring to statements be www.sec.gov leases will accounting TA's statements can the within Our www.ta-petro.com. the the are liabilities adopted XX-K items the recently Investors on contains This May comments on at Private the accounting to of on XXX. be These laws. HPT the website XX. the and Relations related TA’s of will under website present schedule of Form

from their they undertakes required publicly by and not statements today occur implied as than to Actual included made occur. those other to release or forward-looking no statements. the revise law. are may revision and Forward-looking to any may guaranteed obligation in implications materially differ TA not or these forward-looking results statements

Exchange are free undue the or to reliance statements place our Relations forward-looking by with is once in the at concerning cautioned to factors filings that SEC's of not our website. that available and to Securities again not information TA's could Investors any occur charge section upon website, referring forward-looking statements. are Additional cause Investor of the contained Commission

in EBITDA. adjusted measures, adjusted gallon, loss fuel the loss from non-GAAP fuel gross will operations, call, non-GAAP including discussing The to release. metrics stated continuing be performance quarter in unless as adjusted these from any are financial measures operations well common qualitative amounts reconciliations share GAAP financial assumed and this first implied continuing During per and press surrounding of margin we color regard to as attributable and call first today’s to adjusted quarter The adjusted per comparable be XXXX common gross could to available compared operating margins, the on to most the XXXX, of be shareholders, otherwise noted. of were as our

of the you over call conference of remind call I’d today’s Andy, I'll without prior is you. to the retransmission with and to Finally, TA. like the prohibited recording turn consent that And that, written

Andy Rebholz

regarding joining and initiatives. few good the this of morning, call business of our will lease quarter’s remarks and operations. new you your prepared then over accounting to effects And have for the Thank remarks discussion this adopting us the end Katie, everyone. prepared our Barry for Bill I his matters, including quarter. his comments financial about with our a TA. in Thanks turn and performance I’ll interest for

the of quarter first successful. were financial plans our For XXXX, operating and

goals customer and trucks. to results, service their within delivering for preferred in provide are our year-over-year each products, location We locations against the services more drivers and better

year our year. after $X.X last over of operations loss million net But of We certain this year. have for last continuing compared shows adjustment loss a $XX.X improvement from an $XX.X a items, million loss to one-time million

fourth and areas. growth loyalty grow, If the by quarter. margin services for site of Fuel per for not the down for is this recognized reinstatement embracing. XXXX federal of cash basis. XXXX. per credit biodiesel first our fuel retail demand aided We revenues federal in to be also is of the of that gallon per the by back and total sold. purchasing was respectively, the recognize to driven retroactive quarter services legislation by of we retroactive $X.X customers in quarter, respectively $X.XX revenues, service reinstatement the provided margin of operations for store $X.XX Any and gallon, increase offsite. into million, in that Fuel X% X% X.X%, while X.X program tax cost UltraOne tax but credit, will by favorable continued by is result third prolongs quarter. quarter, million XXXX headed first increased on for The items we've to we these government the purchases. or margin blenders' by which be respectively, fuel first our second credit related revenues volume The a recognize environment The tax customer sales part the normal of quarter XXXX goods and provided the believe recognize, over special for improved $XX prices first more the into to X.X%, until grew the million it over are XXXX by million $XX.X quarters our the we sales The that this improved Recall credit were gross revenue that period. $XX.XX the process gallon XXXX million gallon per and an might was after gallon, already benefit if a first might quarter’s first adjusting was key of the X%, enjoyed tax quarter led benefit our $X.X the in government. as for adjusted being gross Both EBITDA a Truck million $XX XX.X%. increased fuel increased XXXX in by XXXX the million or solid same impart in cost fuel $XX.X per by non-fuel reinstated enacted credit protracted the XXXX retroactively continued same before $XX.X tax non-fuel of active and TA of in level quarter. revamped and Within by improvements brought should this XXXX, amount million reductions XXXX XXXX, will benefit enactive, recognized first $XX.X may for shutdown

our reduced with reduce properties leverage in you annual As minimum rent transactions our that efforts trust know, by hospitality million. XXXX January to accommodated the payments $XX.X

for targets. franchisees site are we’ve sites negotiations. which is franchise franchisees view successful TA potential been Our above, program underway, engaged we signed expansion in and sites, or discussions identifying legally well and have agreements have potential To-date a attracting three detailed agreements as Express dozen new we under four as merely and acquisition in

sites application franchising various phases of in diligence the process. roughly have other that XX also are and We

acquisition subject three of our under which ladders efforts development existing of are centers construct and they Regarding may of and long to intent. under we would we Two all will TA or of more a sites saying be to on acquisitions travel not process travel are which they contract, conditions, not is occur. are Express a them or are centers. have when potential sites continue yet five number These way these of one

activities business in will focused this on costs our June. a agreement This a service improvements I'll is facility call income to progress we in knowing our me not slight increased experiencing an to this site quarter. primarily adjusted are in and and HPT the programs. improved a any Barry spending. have a operations, line with EBITDA goal agreed reduction and that rein With those this achieve year what's result comments. into turn was spending. standalone through of should our site in pipeline we Combination level a advance of our site in can that his We of only to revenue service not from executed any sell our we much taking to from truck HPT before generate capital than recently XXXX, in in this do year. makes also confident begin We due our We rent increase ratio in should expansion truck remain nonfuel sell in operations. training XXXX over year, continuing expenses keeping our tight And operating kept flow of expenses intention for increase expenditure operate lease the non-fuel revenues and on cash increases, in to improvements affect staffing improved even also part Accordingly, XX-basis-point to account franchising. for to that and We the structure, our these

Barry Richards

Thanks Andy, morning, everyone. and good

strong revamped a signs January. We over center continue freight on trends. operations the to continues our efforts Chief we excess UltraOne site year and of in and embraced business drivers. program among believe basis. sales to increases volume, these quarter, loyalty be gross marketing non-fuel first an we initiatives fuel And adjusted This and revenues site expenses quarter the by our positive initiatives, see prior lead introduced level in from in operating customer professional program to margin early level travel

Our grow and customer customer to the membership loyalty, and incentivize [indiscernible] today's drivers for provide maximum program increased goals engagement, loyalty, reward needs with varying are of account. rewards

there important. approximately first of with sales, that UltraOne reactivated transaction. in realized capturing to each is that We is fuel and as so nonfuel new the fuel visit know During the member, attracted quarter, more revenue amount turned XX,XXX and anticipated stops an increased trucker addition we per members, an of the gallons

margin fuel margin revenues versus beginning truck in orders the also million retail by XX% work $XX Within X.X%. orders. last $X.X unit million increased million growth biodiesel XX.X%; X% sales opened to impact for store as did first margin an million the increase the For as non-fuel the the truck or or increased million department quarter basis, And volume. due positive site margin primarily of services revenues Fuel show for revenues increase marketing fuel for were and up initiatives service X%. adjusted volume impacted XXXX in service since year. due by of and opened growth maintenance closed XXXX. service, X of gross quarter. year with or site from credit tire sites On by gross revenues gallons due a from fuel same increased million million to the or increased producing XXXX Non-fuel X.X XXXX gallons work same in mobile increased or $XX.X closed $XX.X our since strong beginning gross million, volumes XX.X X%. connection Adjusted gallons $X.X more sites the the the $XX.X XXXX or first environment volume quarter in favorable of Fuel sales recur purchasing well million Fuel to fuel the net a XX.X%. gross recognized quarter not site that sales decreased benefit quarter. or was to increased by by the benefited by addition in first increased by program. Same RoadSquad of continued in $XX.X X.X% by non-fuel our net our last increased of or tax million X.X%

revenue division parking was reserve store part diesel by increased exhaust driven in large increase fluid Our demand. and

We growing continue trucks the as each year. DEF that model retired demand expect year for more to pre-XXXX

XX-basis-point compared showing sold. or a net a gross by decline line expenses quarter our quarter. or increases site and revenue new by Our same by larger Site of which slight $XX.X percentage non-fuel of as in a services on or XX.X% project. margin non-fuel in centralization offset first margin margin healthy the in to X.X% percentage XX.X%. higher gross change function controlling to with level restaurant million site of one total revenues. of business our due expenses due the cost completed operating in successful X.X% for increases due XX.X%. operating sites. $X.X increased the for Non-fuel in of expenses to $X to declined non-fuel initiatives, million The our million This of mix experienced level In key percentage the quarter, site in increased revenues total, Late products reduction sales we're the a we X.X% was accounting the remains $X.X was basis indicating level to non-fuel million XXXX

in on $X project million brings million We savings saving while operating this $X.X of or $X.X this in savings us a SG&A partially project the approximately an increase in is an expenses approximately that basis. expense annual annual are million anticipate these basis, site recall little on offsetting and of realized

confidence maintenance growth our We've opportunities have to of branded continue the great truck the as we our enjoy and improved time large ahead mobile who service we tech number potential of the especially Looking for customers programs, program equipment that onsite. reliability up being and maintained. a properly earned from see

customers. expect these with We increases revenues significant in

continue most vehicles deliveries. with which center, nights, call supports agreements their fleet RoadSquad national emergency breakdown Our on calls attract allow in fleet to and handle to handle retain XX/X. XX repair focus and cases Currently we to fleets that them to of us either have our customers weekends calls their

the by our programs. retrade sales to Today commercial summer year by vehicle be retrade fleets Our assisting mile to tire and load and radios, bolstering service replacement some others within plant for which opened last taking we XXX their casing plan our their retraded trailer a network in for to casing monitoring for terminals tires within and the received customers of back expecting is managing equipment, retrust. we

to about they progress even areas hold. that, With these in our more call excited hand date be the to Bill. potential and to continue about we’re the I’ll over We excited

Bill Myers

and you, good Barry, morning everyone. Thank

new financial resulted This in balance the then standard cover The significant most adopted the our X, for the accounting accounting I change a non-cash of and is at will quarter. the statements Effective in I we impact to of we the adoption adopted will First, discuss beginning sheet. new standard, results change. the accounting January, first standard purely our January ASC with the XXXX, significant changes XXX. new lease lease this of

operations to statement XX, cash So re-elected the did pay not XXXX and XX, to differs does impact March rents. asset simplistically Consequently sheet right Very lease companies standard for to standard standard and to new so. accounting our XXXX December periods will at and do under balance that an The rent to obligation significantly report the impact we This on I there through. sheet. reflects prior is some changes lease materially the use you that requires not liability the companies comparative balance from not of require to leased no the but the for all calculate pay walk there are nearly also restate property. the agreements recognize

lease presented, now approximately is our totaled corresponding balance that and billion. $X.X XX, how sheet assets, March billion liabilities, the of totaled operating As $X which is lease approximately which

the are over agreements assets financial the of More forward, as liabilities decline lease to expense and changes as lease TA operating payments are terms statements Going the specifically, be follows. lease in made. will run the amortized related the the lease will lease

for First, as reported totaling $X.X I leases just operating liabilities mentioned, we've and $X totaling billion. recognized lease operating our assets billion

our sheet. as assets on Second, reduction HPT, certain of liabilities the were first operating reclassified amounts to leases account that the previously of lease a balance were the

For example, the each This January assets. terms. any lease deferred the these rent our X, the for of over tenant reduced respective rate reducing as legacy accrual the differed allowances, liabilities the reduction portion improvement of effect obligation rent of of the has of expense straight-run

liabilities some away. gone have Third,

of accounted in our separate we TravelCenters prior was Our leasing under financial that the of by the tank as to obligation rent removed TA's at the properties accrual exits and to related proportion all these taxes. for deferred a eliminated from million still straight-line operating This included new with former I liabilities. that included under other of to did removal the accumulated gain were HPT expiration. sale-leaseback is recognizing amount was to two for of calculation liabilities deficit and was travel as noncurrent and related leases liabilities rent remaining change financings underground and liability assets legacy of One two obligations unamortized associated estimated the directly Four, accounting assets now in our leases just were HPT This gain liability net not for previously accounted standard. $XX.X pay statements of. sale-leaseback storage now these lease operating centers to specific related reduction equity to to the financing that spoke sites the are two for related the the the and lease recognize

on did recognizing amortization Turning the to sheet to the million been to lease gain have time deferred to to our us balance expense. been not standard reduction approximately amortize longer we as standard new gains. most gains credit statement recognized the rent newly from as historically had of is a operations, the as the a per we the prior the the extent these as impact expense. of quarter gains allow rent rent adoption, a significant of X.X We that Because deferred recognize amortized absence previously the over as no of reduction deferred

results. Now first quarter to our

share quarter the of share $XX.X XXXX, For in first of per loss to $X.XX or first $XX.X XXXX. a quarter of a of we net million per reported $X.XX net million or compared loss the

one-time the first was loss as XXXX, per certain for $XX.X the million the or tax from share or per million was quarter been reinstated such or for million quarter $X.XX first of XXXX, $XX.X adjusted $XX.X share to not continuing federal first recognized Excluding XXXX XXXX. credit the has in quarter compared biodiesel items, but yet in of of XXXX operation of $X.XX that

HPT to with , XXXX in for $XXX,XXX recognized executive also a million to as compensation items. to X.X% of of a XXXX, detail lease entered $XX months expense quarter offshore remainder we biodiesel decrease unusual of improved due March in not million prior in increase of we connection expense. ent SG&A in increases We $X declined the January. estate headcounts to ended level the excluding the the of or quarter. primarily and first $X.X the The three approximately with after and level SG&A with of in increase $XX due legal per affected $XX.X was January million site $XX.X with increased over expenses the salary our Bary The agreement expense attributable SG&A the retirement should the X.X%. the amendments XX, million expense expenses of XXXX tax compared believe operating first support reduction For agreements million, by year, site that effects of result rent the year, increase improvements expense results quarter to XXXX. increase growth reported in margin million the expenses minimum any $XX.X of of partially by million did last the gross excess and EBITDA $XXX,XXX for negative by The our currently under in an XXXX to quarter, was depreciation or rent was annual earlier expense in in expense adjusted million Real was credit unforeseen fees of of an quarter that related XXXX, transaction XXXX. recur incurred entered and the in offset be HPT legal annual or other absence are primarily we to $X.X first primarily

may in rent the you January. and we reasons. of So wonder is was decrease million are reduction, four $X.X quarter $XX.X the essentially why million, first one-fourth $XX.X only million, achieved which the There not during

during the full occurred the a First second with rents. therefore January half of month of we transaction did HPT enjoy reduced not and

Our higher under new January rent HPT the to the was current agreement. approximately lease HPT monthly than $X.X million rent

XXXX we the during first reduction recognize did in enjoyed the from amortizing not that $X.X deferred rent gain quarter, Second, million we XXXX.

$XXX,XXX Third, quarter quarter. to we And HPT of had fourth, percentage improvements increased rents XXXX. approximately $X.X result HPT a first sold to million the our rent first due XXXX XXXX the in by more over during as

the expense approximately our expect $X.X estate million for travel run amortization January of leasing and centers XX $XX expense from Depreciation quarterly XX.X%, to Given real at primarily rate increased by million. due arrangements, of purchase a current or rent our $XXX.X HPT we million. to

was and cash million. at balance liquidity XX, $XX.X our matters, to March our Turning investment

by seven to approximately and credit us are XX. March had at million We under XX also available We restaurants our facility debt. $XXX.X standalone that unencumbered own centers travel revolving

million to did During the not and sell expenditures, of any capital improvements $XX.X HPT. we quarter, invested

capital million capital approximately expenditures. XXXX investment $XXX Our plan of contemplates

$XXX quarterly and that $XX.X from For XX cash our The flow installments. purposes, transactions. in equal remember purchase we be deferred paid million million $XX.X in restructuring modeling to reduced million rent with obligation will January's conjunction lease

April That $X.X X. to of are payment paid take first we our Operator, ready and HPT The was remarks. questions. prepared on million concludes now due to

Operator

ahead. of line the from Riley comes Bryan B. question First with FBR. instructions] Please Maher go [Operator

Bryan Maher

questions. few A

The Can And fairly last million you why been consistent for XXXX, be first in numbers. when several thanks the tell CapEx, it's on $XXX for pretty those years? improvements what and the and going for? will now you HPT high

Andy Rebholz

so I answer that. second to to said rent future dollars for Having where that, there sell the adding it. sell facility be has avoid some kind avoid circumstances in nothing simple to trying Yes, that improvements say pay site rents first, we Brian, where CapEx to to were, a a will I of the That that a few regular mean, increased to return to make others when fund will increased can the project to it specific related it's intending the the we guess the that’s that I that certain for truck makes happens than that more the HPT. part intention more had we’re our we service are we basis of the on in improvements If million a normal sustaining HPT, identified sense to not is sense think return, but nature, increased rent.

chunk to So it makes what is it sustaining $XXX -- of big that amounts. of sort CapEx a the the is up, million,

each a and or year, to calls to QSRs sorts the probably a there had remodels convert to about, which we’re changed of or of or refer are are of things, them as of revenue number to those restaurants, going generating we we other number that restaurants number variety. re-brandings, a happen spoke IT and continuing A on projects brand what the are into initiatives right this now where we of number savings related that closed last related those of have then of growth year. national cost to there to We projects. related And be

of in have number but of chunk work. the that require going we do been to RoadSquad adding necessary be other for mobile a one and the service maintenance trucks So our biggest business. the those necessarily, to asset guess they The would out life truck that their lot I related are big a business, buildings chunks. investments don’t I mean

Bryan Maher

on moving mean your you you What revenues. come into then And level to you what feeding truck to gives personnel that the an I believe just admittedly anticipation that truck up revenues bit level about increased are confidence little a support servicing and site and the operating to training you servicing. will expenses of those those maybe staffing said costs?

Andy Rebholz

that think -- it of it couple and I a maybe on depends of we adding. things some where are is

additions But those let set just more that the the to in primarily and business they’re that say of our RoadSquad staffing them Some -- remarks reason and really are in reasons for we really the I more lot more There in extent, we we importantly, focus do. center. release. on the and of what some them in the for press are be related the work to a business. our think I fleets to call That’s continue that that on our you to marketing think maybe your that persuaded betting will -- can by fact do that

are their for we’ve on we been out there's there do talking who trailers do for customers been we’ve work named, of we There to do there them yards. maintenance more at not our And work this customer but have work of on And are them be about me the We prefers operating also of the maybe doing we’ve now talked we who like large tractors. their for do. to -- to what now work, them job their a them. ours mobile at increasing and well, good it, a hey also work we conversations maybe have to which terminals. you about, work some is want even doing about And done going with on very us they’ve

are are things there so and staffed know to you horizon on that up. our get need we And that like

why statement. of that's confidence so through those And investments we the that income have come the make really sort to

Bryan Maher

will you sites. And I think of franchising economics the and I something clarify about broad any how opportunity. secondarily, from talking you characterization elaborate on to And more that you're think the about more just that? for you and said Can lastly potential even might the then me, XX give as work? us have Can now

Andy Rebholz

to Sure. revenues we've available travel franchise different sites add and that centers, that if numbers fee To probably the $XXX,XXX in of payments our to the had you XX-K, we are think the a averaging economics they math of what to we going where and the to $XXX,XXX in revenues we the what format what adding be would we're done most per date new Much sign smaller expressed $XXX,XXX expect year work year site. And that to believe be estimating I us would are of per TA franchisees up conservatively that way through average we more sites. range. for call royalties in

that's be think side. expecting that's will and we're it reasonable the higher a lower what and some way likely just modeling I average be Some works. But that and from our

us to them site be or is may some that network, to disclosure there XX-ish the that number of there site to will. assuming you Now health how we and are suitability their expressed one that. kind provide got what about XX contract, is is our what pass business we with step part our we their of -- the as in as a they like, where screen of documents. a to the the week, the next the like, financial then assessing anything of that be But the number information say sort franchise an want has specifics their accounts, ready up And don't operator, are are operator I in sign And want to I be franchising. to careful that of that that like interest if

our part them them our be like the so TA help are and things service they diligence way as also then seeing what their at Express, thing. to a And we that can our they customers or is we the TA do of from serviced that, to improve Petro network really like the a two business. will have expect way like to What they customers or they

So it's sites throughout. a that that two-way we XX street

the first the closer was gone we like process end really some Some screen, gotten that are I being have a way we've saying. of first think call phone from of that, review under legal to been just about through really talked three and the the the

them all We that pretty so is of Express has signed of a is that are those Petro expect And turn that travel operator into to because site soon, TA a an And over operating TA the now time take group. that franchisees will would of parcel time my wise, or it’s to up period sites some of by future of sites a right be vacant who next a be time. franchise number in build year signed land they a late center. XX an there good for guess under won't a sign, but, that of some I or But probably do sites and want some expect time. these of

don’t’ you know questions thoughts I that different about if to to the had got that. So your

Bryan Maher

net Yes. as That’s you number? express, the net $XXX,XXX to Is smaller you good think a do enough, and $XXX,XXX what then is? or gross, a said number a that on year. if gross it’s And

Andy Rebholz

I if gross gross, to related is is the will, you all and SG&A. business, equals net that mean costs our think really. I franchising in

of all sites. for doesn’t say already margin. to part, revenue there’s have another $XXX,XXX to And fall tough analyst and step we say manager that another size need that right or with at SG&A another be And track need that really kind or add if paper to absorb are function SG&A. number significantly in large of regional a of something -- a franchising, the it time. that dealt going change new another franchise or for what if could without the $XXX,XXX as of you some to like a things additional comes any of another that’s franchisees keep so SG&A, you in XX $XXX,XXX work to we over we be we to all that now So point hey Maybe need

Operator

ahead. The the Craig-Hallum. Please line next Dyer of from question with comes Steve go

Steve Dyer

point you’d to really to of rate forward. bit A kind be a better normalized more of of indicated on strong about question QX a we per from that fuel that? thinking it sort in that tapered And me after $X.XX the than range it year. start off $X.XX be should a and margins gallons Should

Andy Rebholz

of market over the the happen But a expectation at of fuel another It’s I XX, think I moves Having kind the later diesel today between year. and bad. margin. But look and And that of The and something range that’s expectation. direction, expectation reasonable those range. a kind our seems the year, ships said always that or is about overall gasoline tricky normal remainder blend of penny one we that me, think the when that, I margin. a the our over the talking that fewer remainder a to could a expect XX either drives way wherever good or for that fuel

Steve Dyer

Is sense non-fuel this then XX%. or some there a best that the were or at it other good things the seasonality unique better. some quarter were in almost made And your run margins little very-very good rate bit there

Andy Rebholz

continuing path. any No. don’t from going on forward. drastic I its I see see that change that

Steve Dyer

ball, this split of free you’re if for from about lastly to just sort then able And me, be it taken might year. flow cash Okay. wondering

Andy Rebholz

really the our Not spending in that way give than see year. case. with manage rent in to prepared make and But to we're that's reduction particularly We improvement sure future the a than, really measure in number. to prior definitely our a not are more the in other trying

Steve Dyer

being at year Would or? positive you this least anticipate

Andy Rebholz

Yes.

Operator

Ben ahead. go the The Brownlow next Please question Raymond line of with James. comes from

Ben Brownlow

I year? now. idea. sense a last does of just to guess right trying center compared XX terms get there, the the What out revenues. we fleet customer I’m parse for driving service what's Is truck there the of X%. were, On better way you truck new call to service of any what again wins quantify sort that revenue, of that out just called to have in kind

Andy Rebholz

I the service truck break to goes it's other would truck relate because out goes truck sometimes sell driving those sales, primarily right? it on-site break part to and have that say up, on guess to send tire tire what's but hard I put RoadSquad, on a repair to emergency revenue, the connection is all hard to our There tire an and a for we squad. it's that to of If kind instance, road of precisely. we each those they a or our is out

Ben Brownlow

the having that out RoadSquad think have that things and biggest say fleet to I there about. are working it's us. to actually increasing now the drivers the I give right call Barry do our to folks service fair the built But revenue companies out calls truck focus center on in we the trucking the sales talked to and mean convince their

maybe, it's lot that has small It's the road because really go there those have there's that tires growth year, that businesses revenue, maybe the on being our just of anywhere throughout greatly them And tire customers we squad, have like, nontraditional bay, that's had of but out group when business in road saw of It’s nontraditional primarily to market same about our at that when at method growth again mobile in the selling. that month every that the we that. serving too, the maintenance the in be apply RoadSquad business. that mobile all a most on we we we have in And that then truckers. have that business just of maintenance on a or The that’s in think still and improved a the tires that's bit month maybe capability there. can fast. one group. we’ve, look one past last is owns as commercial but the maintenance them who going this our mobile squad, their the related anywhere sell we stabilized us the a just really our so the truck Barry customers, year of things whereas out prior But is to over such lot we a sell the doing force I anybody the Let total And but we that's piece and one center. can focus really in total long-haul we're largely stabilized sales to interstate and growing talked that's call of sort potential of and as you said, solidified

and on sets those. So Barry

Barry Richards

Yes, maybe add. one to thing

we’re call many -- the roadside relationships they to through it’s confidence. important think to or who build due go they Those are the supporting emergency that work relationships, return and these fleets. maintenance scheduled those I And along the repair. center to with different we

And this us was that So -- it continues valuable at spread center are grow. all nicely. call that peoples to And onsite do fits terminals, to maintenance the to we network. very all throughout those relationships very

Ben Brownlow

That’s helpful. were ago? many call year the with a How center fleets signed

Barry Richards

XX. than less was That

Andy Rebholz

I of mean rough a and range Ben, about That I order magnitude XX-XX that so directionally it’s was number but that’s the somewhere in think -- right.

Ben Brownlow

Okay.

you of side of So think if year-over-year. growth it's we with leveraging -- number from in expenses And think we should the that you of kind I labor much are significantly about X% comfortable I have you about the mean, SG&A point right now. pretty level mean forward? technicians this just component, should that or pretty switching

Andy Rebholz

takes we the out the I in year percentage would operating so or the model there always We because people serving non-fuel that increase of revenues prior over and expenses customers model site what restaurants. a not do, is truck the percentage in level a period. do of prior particularly as what service as to much

have those of OpEx going a expect revenues. get whatever a you quarter. increase -- revenues percent rough because percentage site generate you this see more that’s revenues, should those if will in what X% of was estimate XX-ish to it to level our So you of to a take

for is like utilities that’s that should which the our Now managers time, way incremental piece XX%-ish line. property of talking site bottom a that is growth. and decline more a over But certain OpEx site of level or revenue to that to said the of that my is something the head dollar percentage there modeling and so that fixed, every fall anyway that. on and percent up operating related of amount percent mind should taxes using the expenses looking having a non-fuel XX-ish maintenance top at of unfortunately reasonable my of But of instead data, cost level but

Operator

have Railey of from We follow-up line ahead. with question B. the Please FBR. go a Maher Bryan

Bryan Maher

Yes.

lower Thank that those also operating And questions as site on in site non-revenue? you level And place or number with from percentage cost and this so that you how calls have discussion, XX that do long than you. the get really So prior I following the we've the guys frequent up that think one you most put is think initiatives that earlier. it’s XXs to I discussed how possible? of discussed of opportunity high in a is level that biggest accounting into takes? still savings What’s you the getting that other year,

Andy Rebholz

may annual number this in year this. we basis. have Brian, on at the quarter said XX and basis things But couple annual that an an look A one of of that XX% moralistic a kind quarter, is for you on XX-ish number last when

revenue quarter first is business. a our level seasonally The typically the of quarter, weakest from lowest from or perspective

that. I the we It's in that accounting home runs, guess. do. energy site like and the centralization LED the of things I where lighting It's the one to And have because things fourth be advancing is lighting and to of that and can not of lot will around it biggest the day were so more that second XXs. we expense -- to singles, operating things change labor costs levers we the little things theirs expenses. their level in things is hitting that higher part old the Doing what's best to over managers a But stuff, efficient kind our work Again, is that's bigger do and scheduling it's sort revenues. better. that and/or style be lower, third But control of the going other reduce labor that it site functions the going that be schedule in was the ways percentage consider kinds having frankly is percentage down. that to quarters, in in the improve quarter structural be metric the first is pool fixed labor in the way be to Most Those going to will of to to of and quarter growing it site, labor to scheduling revenues a what on you the bring instead do. of of the every our work that and are more that are tools pool spread

Bryan Maher

and XX% for I you times we because the have of to just XX.X modeled a a wanted Okay. for year. be couple clear number used full

high in So year full numbers around still XXs you clear, be to if the expect certainly you XX. not guys

Andy Rebholz

yes. Right. If about are now. right any year changed what with than for looking in our Nothing's yes, the -- that the than, I’m XX-XX. right we That's data the thinking. number, not quarter at said percentage again, we first XX was our

Bryan Maher

on the LED you investments has then seen their are in and this profound already system? maybe wouldn’t the the LED everybody the sure switch of And savings how lighting, to when lighting have Why and homes. you with call cost why made I’m this you given out throughout entirety

Andy Rebholz

throughout entirety the of it haven’t We system. done the

it's We of where have sites. just or prioritization think it done remains in number of balancing And I a the you a spend money.

Bryan Maher

of lighting days XXX Thank sense. your with would higher guess on its a of make you think a day anyway, list. the you. be I But, year awful business, I and hours kind that when XX of just lot on an going

Andy Rebholz

Bryan. Thanks,

Operator

conference for over any Andrew the Rebholz session. now to question-and-answer closing our to I’d back concludes like remarks. This turn

Andy Rebholz

Again, your interest TA. thank you time And forward like with you and your again to for today speaking look Bye. everybody to in I’d soon.

Operator

presentation. The now today’s conference attending has for concluded. you Thank

disconnect. now may You

TravelCenters of America (TA) 7 May 192019 Q1 Earnings call transcript