TA - Earnings call transcript Q1 2021 | TravelCenters of America Inc

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Operator

Good morning and welcome. This call is being recorded. At this time for opening remarks and introductions, I would like to introduce TA’s Director of Investor Relations, Miss. Kristin Brown. Please go ahead.

Kristin Brown

you. Thank everyone. morning, Good

Today’s the today’s Pertchik, meaning remarks Officer, followed XX, Barry analyst These of expectations Laws. Securities and Litigation begin statements Forward-Looking Executive Peter TA’s as beliefs Officer, XXXX. and are based of Statements XXXX of President, Q&A. our Reform Federal for May and Jon by Richards call within call will Private contains the from with present today, Chief Securities Crage; conference forward-looking We Chief Act on Financial TA’s

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

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

unless quarter and on as financial call, in noted. any in our be to reconciliation financial be of operating EBITDA, and/or assumed press release measures, During on as should first of discussing first GAAP can EBITDAR, qualitative to quarter compared The available are our website. measures performance, found well comparable amounts implied XXXX the XXXX, the these regard adjusted be call, we to EBITDA, regarding this otherwise non-GAAP stated adjusted today’s net measures loss, will comments as of including to The non-GAAP adjusted EBITDAR. the be most that

you to Jon. turn the that, recording call remind of over conference is today’s call written the retransmission Finally, you, prior the With I prohibited that to will without and of like consent I would TA.

Jonathan Pertchik

Good in Kristin. your morning, continuing interest Thanks, you thank for TA. everyone and

volumes, impact While improvement. had COVID-XX adversely continues successful a to gasoline with financial our service quarter restaurants we have and full significant

and the XXX% other For we year a adjusted adjusted of a produced adjusted increase EBITDA, measuring results. prior our key loss, focus and compared year are solid improvement prior full the by nearly to we our business related EBITDAR decreases non-fuel offset in XX% first the EBITDA, in quarter, four COVID improvement more net a managing and than driven on XX% in metric wheel the fuel in traffic quarter a restaurants. words, then in quarter and by versus nearly This increase doubled adjusted performance in following, from our was every XXXX, our costs service

headwinds. the of volume. in from XX.X% previously existing to the early by trucking customers facing overall business, began diesel of as noted, impacted increase volume side increased and fuel fuel continued the Gasoline be we in activity, by volume the an initiatives. XX.X% margin diesel Also, COVID. our increased adversely of have success volumes driven increase a a overall variety customers we to of the quarter On to fuel due addition Due fleet new

diesel both the However, how is margin and of diesel latter team as management as energy as the time, potential Later, the focus of over improve those midway higher tremendous The to to quarter. which we hedging. trading inventory benefit steps stability. dissipated challenges year. dedicating our margin taking include we hold through unpacking well and some drive will discuss at as any course The are to well to for much margins this may given I additional

to the and operating carefully, and cautiously while exploring other of non-fuel business, brands. the we models full alternative restaurants side reopen continue On service

site and open per underway, conversions IHOP fourth in this five third and the have We we each quarter X.X will million which approximately year. costs

conversations with as restaurants. for brands. end up full fits on are as one restaurant and brand we all having parallel service will with a design work our We not well size It customer up is approach other with wrapping segmentation highly likely,

locations and are and have we beginning around As different an designing and we local overall to preferences, those conclude to profitable result. achieve differences and that and overall and the different markets were strategy demands plan regional best most

and branded $X us as within We in also standalone business XX our core locations, results, energy restaurant long-term a of focus not relative included & center business allow our the travel divestment for efforts goals the to or will company-wide our strategically fit business. which our QSL. did Lube, company, million This to Quaker disproportionate for financial of completed sale the amount absorbed on Steak April, primarily

For better we a we store XXXX translating believe improved begun already these services, businesses. management and and which is and centralized more to increased versus working XX.X%. have into Also, are have margin positive impact, quarter by inventory for purchasing and a retail managing efficiently, merchandising to revenues the to

customer our mid-level with effect, all and a in Our positive solid labor orders any increase prior XX.X% leadership. work compared reorienting year how increase an in work as changes have financial and service by we Truck segmentation are a improvement sales. quarter, to driven merchandise to completely showed the beginning revenue

in are continue each in DEF DEF volumes diesel year also retired pre Demand and XXXX for quarter, was fuel trucks more as by boosted model diesel higher are as for demand of accountability. we senior Non-fuel a our from service to a to continue focus and of key benefit improve year. our with the to this new new also as advantage DEF, end growing all well TA. the to for expect make compensation targets part available centers expansion lanes Shifting retooled created entire retention, to to current have continuing at franchise. for the DEF Truck and middle travel through capital as dispensers drive Technician, manager XXXX. central training by revenues demand we remains We continued expect role improvement. network fluid or important strong competitive plan, exhaust leadership, business and

new XX will same way XX of anticipate the towards additional signed opened have locations XXXX, We operations of beginning locations by the excess a XX of since We franchise stabilizing at we our for and level in second as year. per target work periods. franchise new XXXX agreements franchise XX quarter the begin

are only very also model. interested asset in We business base. fit M&A add in to locations activity that we on our once our again, company And invest

which positive far, growth talented designed investing we and operational our robust of expect the in effect later expertise as shifted conditions, to much remedial preparation facing a to in refresh level accelerate initiatives say catch-up. light and planning we significant in outside impact performance. and program, through consultant, people, our XXXX. efficiency to with of mere our to interim drive pleased IT and as growth, their investing financial upgrades needs transformation improvements With in customer including a are and goes in and corrective around all experience. and which improve from of our is we in demonstrated ago I particularly focuses are into the technology in to take quarter have functional year fact of which of thus beyond our on our the that an continuing We XXXX, and leveraging plan people program, on site our the our year site remediation investing and well plan, improvements, base this referring course refresh a systems in And investing year Again, intended of financial aesthetic, our in customer’s capital I’m and site XXXX. When improvements much infrastructure, respect branding and asset and to basis,

have this levels to positioning silver their needle. proverbial on and tiered a and ability study as to have led financial The are being of bronze. We move a platinum, approach as micro based well of study in applied, competitive of the our market sets. results performed levels detailed Four spend gold, assets, anticipated their

We and expect largely we comment of by non headwinds. certain fuel our the previous into up to will to affect from than important I doubled XXXX These combined those although year-over-year want to Despite end part to this the earnings resiliency, did this well quarter. the XXXX this measured have Despite any more opportunities as my adapt and January EBITDA February overall refresh of and due headwinds, remarks site portion call, pick and successful experienced quarter, in have adversity. an as in headwinds, into our into dissipated, we volumes, also earlier businesses. we be significant those view we with margin QX, company, program diesel next. brought year we of a how embraced solid which like new, strong through diesel they complete challenges at which and

a and fuel created in creating which things had affect fleet, together This the unit. example, over importantly, service quarter, we accountability and diesel change last all into symbiotic singular more success visibility past by gross combines and have whole, retail, hospitality For fuel have one into this that bringing commercial single restaurants, year, division, truck margin. improves operating we following our division gaming a

Richards tremendous leader to of division. each owner Our new his areas of these President, combined from and this directly the is Barry in me and knowledge reports who

automotive T help the Tesla created about want SVP, embrace for that major on is who leader, I opportunities. S opportunity exploring E leadership funding addition, sustainability alternative TA’s also In support The a sustainable opportunities provides we very and are model us note, new to retail project for infrastructure roles an construct, the in and focus several this energy. Earth and its industries over few capitalize methods the TA has while Thomas, We in diesel, decades of of a and growing Day called trucking changes eTA. TA for are support to methods and was transform On energy. extremely is commitment focused massive many margin comments coming, the plan under capital the made this clear little we a business provide on that original a volatility. and highest our had which engineer front commitment and a April announced to alternative also A of including That carefully addressing in to division made new capital the has to XXnd John on administration and new have education. background and new by TA on announcement manager and to

And taking sites were place. have duty are and a concrete We at vehicles two hydrogen two electric sites. commitments with transformation. and hydrogen In install in at to along routes supply collaboration this to charging been Niccola storage steps announced vehicle are build grant we awarded California, a contractual also medium to have heavy towards

hand partnerships despite particularly other of locations this over to to expanding finally, we that transform professional strong remarks the promise continue may results and next for of are work their generated leaders this dedication, with around pandemic. is and effectively financial by positive drivers on together. we to conclude, the our as allowing strength can take DEF and and with network to that long discuss as funding. of and evidence the these I offered. to I’m We to and is opportunities to term capital most my gratitude growth exploring TA deal value. Peter. results our opportune with tracked through always would this the as Peter later confident to in and old will country not ongoing started I’m and time year results I’m this along, the for challenges I we you, yet plan across in we where collaborations detail. excited hard And teammates that our have call rebuild And the offering to well state for of whatever also trust this century drive federal I as great effectively successfully it marketplace. managers that, will a the to as as navigate believe colleagues and half effectively fleet The team and resilient in hold serve end that all biodiesel unprecedented To like were blending our execute company as team currently quarter, range the prudently team into deliver see and quarter’s well credibility to this proud the stockholder come

Peter Crage

and good morning, Thank everyone. you, Jon

quarter compared disruption unless are with we pleased the as in stated quarter, In that referring presented first by our XXXX in business pandemic, as severe my first remarks be given follows, to particularly mentioned, due well as Jon the to challenges in I the weather otherwise. XXXX quarter winter will ongoing to the the some February. results first As Texas very

per a For million per share, $XX.X to the $X.XX net or $X.XX net or our quarter, $XX.X to we loss million loss compared of million XX% improved by or $X.X share.

the in $X.X expense selling million decline in and gross EBITDA XXX%. margin. items expense increased fuel offset release, one-time as in our $XX.X margin, increase EBITDA, of $XX.X or an or $XX.X adjusted management items adjusted general or one-time year compared per generated few $X.XX prior due million and million million to million operating continued $XX.X gross close administrative of a in two in while and margin reflects by prior $XX.X improvement share quarter year increase million of earnings Excluding detailed was Fuel approximately or non-fuel loss positive partially we level our XXX%, an primarily decreased a or $X.XX share XX%. The X.X%. and the $X.X net EBITDA million was per to which gross to

difficult While or million reporting of fourth reduced result during reporting gross quarter. conditions low January a XX.X% beginning margin you now the gallon Beginning that March. for sales quarter million persisted a and both gallon the Lower will fact the as gallons by a into XXX margin as in in our purchasing have These in bio-diesel to quarter, note also gross margin, our market. fuel weighed adjusted revenues. adjusted February of recovering non-fuel cents This on is four environment gross credit adjusted sales gasoline softened due traffic gallons the gross of fuel diesel XX per volume per in before fuel is result early and discontinued increased the fuel with wholesale volume to numbers fuel this included years. wheel the fuel we tax margin that margin volatility and

the is due revenues quarter at comparability adjustment for retail was on limitation to center or restaurants, closure no services, store or closed. purposes and and temporary third truck the strong growth services X.X%. which year-over-year service, and service increase full DEF of standalone travel offset for our basis. by a of a by roughly $XX.X remain million So required both The increased Non-fuel in

service margin Excluding million or increased non-fuel by X.X%. non-fuel revenues $XX.X increased full XX%.Total gross restaurants

effects service decreased expense restaurants, million store, level to of of non-fuel which pandemic this continue $XX.X increased as DEF. service full course, and focus improvement on Site the in Excluding X.X% retail or the rationalizing the services, continue by million gross course XX.X%, to costs feel or truck and of $X.X throughout margin we operating driven by managing the company.

employees positions somewhat cost as last continue reorganization some of Although leadership This XXX April’s impact key as in accelerant have $X.X marketing and consultant for priority the or This we positive. cashflow decreased low reductions plan, drive restaurant quarterly eliminated well expense SG&A been which to costs. has the offset pandemic full impact improved quarter approximately efficiency. are does to investing decrease business, positions and costs also X.X%. in by furlough, million we on are the on focused by keenly re-openings still the reflects ensuring

extent, larger a to in as and the natural lieu from technology in addition capital we cloud expense bespoke will some operating move to the see we increases outlays. implementations lesser area, In of

deemed to Our focus truck million XX.X% quarter, to efficient capital transform $X.X to our though, prior decreased amortization that most primarily $X.X Depreciation million and backbone. the by related here as valueless the year or canceled a the and use tap programs is due of were technology in quarter. expense we service in

in to includes performance were that of charge QSL April. and first results the With to immaterial Quaker, the an related QSL The Lube, sale additional $XXX,XXX quarter XXXX our in impairment to business overall respect of the XXXX. Steak of also sale

and March equivalents of and briefly, XXst, at credit debt million cash sheet term XXth balance on of cash amounts million. our had as $XXX we XXXX, year No our to near of April $XXX outstanding Turning revolving facility no maturities. this

XXXX restaurants of As part aggregate the the of quarter technology refresh of ramp in four and in expenditures invested travel sold, contemplates capital transaction. by We a $XXX XX and we $XXX XX, quarters. we our were course were and the during million, site investments in as up for investments facility debt XXXX, of first to service own unencumbered million plan the and second that in million as standalone still our March capital QSL expenditures April truck third range $XX.X centers, standalone program that

for XX% now In be company addition, to set model cash-on-cash we to fit have of owned That capital meet our remarks. we continue take investment. Operator, interested we XX% the hurdle are in questions. to locations concludes addition the our ready prepared that business and return

Operator

Thank you.

from Our [Operator Paul now Citi Lejuez Instructions] ahead. go comes Bank. We will question-and-answer first question session. begin from Please

Paul Lejuez

of in overall if you was that you just how to on curious, saw much margin cheers Hey around, saw March, an in you centers have in buying? turn that to per due give market improvement operations I’m the years. year improvement couple sequential begun over us update that questions. an of guys, versus two franchise the past your conditions Second, can down

catch improve those you initiative, Just from competitors are are your how where do the you relative businesses where versus wing to seeing last then the of curve you feel playing ahead they and up? like are come ETA when under you

Jonathan Pertchik

Thanks, of for couple Paul. questions. Thanks those

start you order I asked. So the will in

more no a more diesel or improvement, versus moved of much it question other how market market was question come the You favorable has Again, year, as margin us last On place historically between beginning look we some started low back many actually this it of and challenges the with got many, of years. fairly challenging when were for the year buying even and know normalized initiatives? and period to we quarter. that through end

for purchase to we XX% part we got to market about penny, last of hair for to And normal gallons us, earlier, consolidate of as normal - got But to penny in running the fact as fourth gallon. now question over kind RFP well diesel consolidation more are maybe a state that returning we it we more this a more we guess per an the and of a a and our is spoke roughly as so, of of normal had on year, signaled stable did of into us. we without third, I quarter saving in this significant a of our year. gallons So

markets in flow and next. from as we means in any say I to of was and that mean relative relative It doesn’t time. arises in, for saving moment one rise when week it Now, to tides cause is that again, and penny the flows, a one time. There because moment that the to improvement

starting So to that the that our started course quarter. toward of system the the effect through of end

So that as a of it well. would, piece was that

to franchise we through the this and the know, more function, or think On early side, just opposed I franchise people along. as we ended quarter a are in we through sales coming here sort that are passively and last year, franchise last of, to first role willing maybe business hired quarter signaling out you a and

them end it then innings little relatively speaking excess speaking. authority. a the from proactive pace we a the from why We would And year is that and that We are still, year target will early that only we get bit of get into And XX and open this of at seeing I the next more think to XXXX have is speaking as that. got but into what generally is not relatively been mathematically how they little is are about feedback I and picking that is from up game - the the our successful positive. and sort or that to we extent successful meeting us, but interest you me generally feedback know, to for last they and increase increasing it is of a for are to to that new getting it and a franchisees, continues say franchisees the enough year, expectations. early it is the It for fact are franchisees tells

businesses and to competitors who companies believe I historically. family about generally do primary competitors, our owned there You competitors? Lastly knows know on our and speaking are question are compare ETA how and we everybody as great your private

paying don’t of a drive as there I as like we period we how have on say know, well. to accelerating. believe And terrific behind, us administration, the been is the you we attention And ended but, motivates visibility, like opportunities, new only is for to amazing exists to is or ahead even and but and hard surface are that to last even we stuff they scratching are because year there a always this are just universe of I some harder. behind funding think it So whole it have time we before just if the that

like now. we way with and I So playing already us catch it. are right at started the that embrace this are we I like Paul. are place right very accelerating in spot the all questions, answers in stuff administration, we we hopefully like don’t feel of sort steps I a feel up just, a are new in good to really feel And of having to right put your time

Paul Lejuez

definitely. luck. Thank Yes, Good you.

Jonathan Pertchik

you. Thank

Operator

from Maher The from B. Bryan comes Riley FBR. Please go ahead. next question

Bryan Maher

some Good be morning. questions point thanks only A couple who just marketplace from are in to a to M&A so, little so on, sellers as that travel commentary I a centers the clarification the you that me, of M&A do if maybe you would want that topic, touched about were bit if today? of and and and clarify far. for And

Jonathan Pertchik

So, yes, Thanks hi thanks hope question. you well. are And that, for doing Bryan. for the

want are company. really are a terminology and again, we know outside I mission to will I and and history So do. about we sort stick you know, are is be on question, they And to we not investments of asset are you so focused our some on, who we in some know, very were base, that our maybe that what were of what your there keep investing as I answer you using, specific and we very, this

we and down sorted what And who to do well. so anything we spot has do are and what the of do be we we sweet are going to

question along and you centers M&A travel is we support alternative in, highways And mean. stops that of so and but that least routes diesel, at without that evolve in say that that will energy, along when we know, on, are obviously part of is what that sort trucking large infrastructure, focus kind truck focus with the

we maybe is seeing there. some be kind are sort very it we attention business of are some extent, more You lesser side off we JV of But interested are paying going more not in what standalone out on M&A only that and know, is partnerships completely things that and on than also, M&A to opportunities, you truck highway. business. to These know, of less integral the be in exactly And side, and understand are service lot curious out success the know, to some you business, of to like that extent mean. and to are, I’m what either is are alternative directly a functioning very, JV the businesses are technology, is what energy to business but the or trucks there our very sort I our of and that will again we

Bryan Maher

then and B being pops we of those I’m predominantly they locations? they think kind currently are flying loves before locations transitioned to or And mom any properties Okay. when pilot of are assuming Js are and initiative what kind plus they a not TA? or of predominantly are they A the franchise

Jonathan Pertchik

question the for on too. again, franchise So, thanks

And support the can they infrastructure better the put fleet we have business in who who quotes some independence part some For more provide. mom that of generally are speaking, of B their and the accessing and locations. likely and are plus don’t most I say would to not pops,

a or think so on terms that fees end opportunity is I to times greater going people of those of than to we in concluding are fees and have not conclude, And access is get of they increasingly to so, investment seeing access, are success. why effectively one-time that other they cap a that. What recurring having of the and business are fees, front then make are and course. and they support, kinds fee And a to with the pay fee capital a royalty

Bryan Maher

the to the in bringing day-to-day I XX,XXX is or positions business, those then if And that. me, least think something to for to that how I trucker just two. people you available on at you CNBC at how upside think and last think working I or shortage last are And But and there in saw this continues your There board? of filled. tune day be be to the on do industry much is is on industry successful seeing much your the

Jonathan Pertchik

question. attracted about is more point the I is the this over to chat to on road, starts energy only very great CEOs these talk And somewhat while duty But on increasing success. It recently signs trucker CEOs the to heavy more drivers. just from is know, truck that be very any, our in Peter is is little for Again, take compensation take robbing is hold think significantly. taking showing I more I won’t it Paul, that significant Again, next is CEO. in extent double interesting, this increase a in make the conversations. the business. is digit sort half comp And decade bit. it to miles It One more is the there actively some of choke I may from and question on lead with truckers to alternative tech still biggest that side doesn’t had I particular universe. more I are And putting the customers. a have our name interesting, an are longer-term on business. of this of a upside and

or the being the sort a past perception electric might in what the example, on is well. about diesel mechanic to or For diesel, of job sexy work driver hydrogen as been have in maybe quotes than more a

some looking at to So to there in excitement we be industry be these brings well. to younger may, there farther places that draw from are and embraced labor as newness ahead, other more as some attractive of we technologies more competitive a that new may an opportunity audience maybe and and

to So, with upside is only but there that. I respect think

Bryan Maher

much. Okay. Thank very you

Jonathan Pertchik

Thanks Bryan.

Operator

go Please question [Operator Instructions] from next Sullivan BTIG. ahead. The from comes James

James Sullivan

you. Thank

to just larger your market cited, for for kind give a through initiative fleet of been know you And wonder if a you And, that of some while. customers. talking for us the ability share So of quarters, do the of the earlier of Jon, gallon pretty here. and couple diesel at your be up if we of and understand XXXX.And the diesel But had sense has of could stated take you how cited, I my been case, amount you look in has each reasons. in the a XQ, comment different the made much in gallons you what opposed is can, sold, the you you you amount XQ described to XXXX, the and to similar activity. whether question diesel success gallons to first a you sold sold do And of kind to with success expect there, reasons substantially trucking to whether has And year diesel that, continue factor about as take share, gallons cited a sequential could increase how from kind attributable XQ but XXXX the seasonality of of periods that. to I you terms general market course, as the

Jonathan Pertchik

business, on know, forget into you three negative area. or you a weather well, ripple continued for we part really very and effect this really that like four that thanks extremely about, for us, actually then that this the lasted weather volumes that weeks. those effect obviously, significantly you And So, Texas season, our bad hope which generally bad know, in had storms, but played are favors of factor one other Jim this but

that call event growth it it XX% probably that much same was, if more but Texas the year-over-year storm, significantly not greater we year, So had that Texas. weather pretty affected had I than been have period extreme it affected, would

aggregator know, the small growing you focused and know, you we business. big So, significantly new very drive really that fleet and on are our commercial for and really of is driving are fleet and businesses has still one area call Barry the retail to now, sort area us been under under opportunity of we partly division this it

just addition in of our keep and to incrementally, I small now, And think have Barry huge and retail needs opportunity and to is been fleet that focus to we It going there. grow be, the growing new of that we continue success are our I going an with business. But way I been to the area it what that we so in has business. it And think this have and to fleet think are not for it a is growing significant and same is construct, significantly and team. our so focus for we is, have area

James Sullivan

that. for Thanks Okay.

this prior think very X,XXX, line last staff you been those there is Peter who quarters have his a the company savings something here, is people you biggest was, come obviously it you I level over But year. some have before know, really opportunity that The question and an center the, costs, which, had helping second efficiency And back. the of on volatile perhaps is and up. the for operating I for to as cited number four in comments, the furloughed cost had site item furloughed and drive are not said still

of we then the guess you that under that comp, ultimately is about question number we previous to I driver the regarding are many have hearing truck X,XXX everywhere, all and of understand three, the just guess, two, number how what do that first them here, kind to be sure of original return costs or I it pressure of hard find number as I’m trying expect should furloughs described, coming situation the and one, rate keep labor all, like staff. was run returned, So the intention? not Well, if is I’m the to think

you an for and if you know, opportunity furloughed not address you in could how returned? staff if think costs here there as is you know, many have about to the how level furlough, So, particular, efficiency, much go operating site

Jonathan Pertchik

Great.

this So thanks know, countervailing turn Jim, things was costs. lurking and will you year thanks know, don’t you control and forces potentially for sort is that we hold may later no I inflationary background, that the but second, into some that. question and down forces in Peter I there is in to whether trickle start, happening it labor it will know, would here, of there of course, you take a that

outside other is other on last other some the or on returning I doing level and furloughed year, help, site there. know hand. with on opportunities consultative some expenses, a hand, But hand the not work mining into people finished hand our On dive same we the it the really deep

how one will the So are all I getting return. not you furloughs and just here the really X,XXX will is in another sort of all what that on question thereabouts Peter to respect of offsets of essence it to turn second. a one With

new get And little plans maybe them normal in to all have bit a that. more return. it of universe going we not into a of where have on to a are Peter to to hand do I’m We

detail, new could how if maybe returned Jim’s some the many, Peter, normal. sense you who has if of X,XXX, on So with start you have the and question

Peter Crage

Sure. X,XXX brought lasted whether Hi, those employees or returned other in. Jim. we would The they

have mentioned the in are just believe exact the with on very than We have prepared I we don’t John in I reopening to are obviously no remain because at restaurant, can the very we But have particularly a you that about I closed. the offering, also have we longer where Number the offering still I mentioned, food back less but thousand. space, a mandate in are to get it number an have remarks, being restaurant as careful. about not one, to we a location being furlough. careful

can rate, revenues some are see things number consultant are brought in, and reopening So, help of rapidly. an you we for looking ways I A exact happening. are one to ramp. don’t respect couple efficiency We is also arrange to create decisions John making With you. revenues have are ramping Number we those at as mentioned, we obviously for even locations run around

very out been about back have with our costs skis careful the not getting bringing system. over into We

those are we opportunities beginning for to some of implement So savings.

I flow flows think basis, had. trickier, through made improved over-year to We as right. what be obviously the last year- year. goes is really some cuts significant through We on we our year a going on, it

things I would just that those hopefully and mention few a are So that is helpful.

Jonathan Pertchik

Jim, And and thanks, Peter. just one thing to add,

to of As just variety it we looking we also are look But to to should measure a this back measure be sort things, year, last ourselves obvious. will to there so as COVID say a is result is much of because years stable looking recent as reaction point kind some year year two in state. noise your last of we that the just ourselves for at with just we our of I

going at measure So operate XXXX to somewhat ourselves as we just forward. looked we

James Sullivan

comments, Okay. blended well That the expanding And as prepared may is from your availability, the of have as availability. biodiesel question product DEF final in then me helpful. mention you the

the to So of currently there available product is two-part about? in how that number question, do talked have many for XXX again, have spending is the centers that you any assumed that one XXX capital not and that

Jonathan Pertchik

Thanks, Jim.

some yes, so have tight you numbers. So, on that,

are biodiesel, queue, have adding on they in we been are those So the and dollars locations, XX approved released.

pull jug can is biodiesel in think big when at compared for and retail And pump when lane pump locations diesel these the XX the as at the gallons, affected five DEF for being up gallon boxes inconvenient. stores. thing But a DEF it are DEF XX locations in sell dramatically the same you of you able pouring is the to not pump. does and when So I the trucker to it. these very put at big vehicle, those time sales We for at your

XX which adding way So the locations by DEF is are those of DEF, we significant margin.

a about XX of the range will and order this of these just is course I of we lanes XX bio-diesel the XXX adding to those over dollars, for will combined spend year. million magnitude are so We in give rough dollars, you DEF

James Sullivan

thanks Terrific, Okay. Jon.

Jonathan Pertchik

Thanks Thanks. Jim. for questions the

Operator

from comes from Singular Chris go ahead. question Sakai Research. Next Please

Christopher Sakai

morning. good Hi,

on are I get seeing wanted an guys had in sense, the uptick in Just segment, guess, far the vaccinations increase, - as I you to question a a restaurant as restaurants? as the U.S.

Jonathan Pertchik

Chris and so good thanks, We, morning.

month as an for at improvement what you something but which the slow, and is I I been of this week know, has litmus not progressive that abrupt a request asking, look for sales there where, week sales, and me week spiked, sort but in city up a, think that to continue. I approval interesting want city to know, even numbers been state and the question one New the City, of been if know, over is to and know, is opening at in see moment you maybe travel most that when the the July. governor a you and example, are we is have or talking area. come brings, to York but you centers a like I also there be just you look Again, test going going we reopen, that summer You to an lot has one of it New you City. in York hearing most, are environments what York as And in is New to hear saying mayor that Not it closed

the movement trucks, those kinds You gasoline, restaurants same can that the movement happens still country as diesel, around our are down facts well for movement which is the as in gasoline what way and mean imagine of materially is of of of are to likely down.

I So are some proclamations. side progressive to local the improvement is say yes, these and is it seeing governments fair as And be as, of is going summer making these we, interesting back. start think, as to we an it restaurant a

rates relates is vaccination it that I vaccinated. it to fair think to getting assume people and

Christopher Sakai

Okay, the lines I the great. of is question guess on then that how And the IHOP, going?

Jonathan Pertchik

have commitment are have, way, COVID right. IHOP strange and right a in want are we in our this opportunity get odd size full in it be that remarks, we a to the restaurants, monitoring to we most we to five portfolio really know, the I of right. certain We I get gave not intensive an of really you to do So absolutely with across a And as I number my building plus we honor to make really just process one that labor out said, want of you know, now and all. XXX understand us service fits business. a going will and And sure part this it is commitment,

lease exploring a in execution process also we very lastly, made the in progress including We of landlord I where likely, to IHOPs, we that going performing are but offering think develop. this will as have are brands, number of only, we that on we mentioned well exploring here to could center and it a I know, It space, And in a then where to IHOP not historically that a another us has, too, brand. else. name are only not brands effectively or you are we you IHOP company be operator is operator. be some potentially it company be leasing as And have a coming that owned but is is the owned a the could as in, yes, it self-performing IHOPs know likely we that travel end something

So than but the construction open. ready are to better doing well continuing And, forward prepared in actually along. of what budgeted and And IHOPs the in various sort so march for far we the CapEx are we those getting of to are those doing things are and as we terms well. them

Christopher Sakai

Okay, great. Thanks.

Jonathan Pertchik

Chris. Thanks

Operator

go Please is follow-up ahead. from from Bryan question FBR. next a The B. Maher Riley

Bryan Maher

the restaurant. that Great, And was good on thanks. some really color

So thanks for that.

follow-up So from me. just on

guys has have admittedly, of quarter. the do But a first margins part the fuel and there thought kind headwind the buying. the fourth inventory Can early latter and the advantage they think of you On talk would been to have on the these and of worth when of regarding I three that fuel they part takes would in of targeted one And more of in about include That company I margins would ago, fuel your things? about of two, to margin part kind those you found there quarter in one. fuel a in buying the two credit? spot market puts this years is only bulk covered or days the kind fuel how have that talk real part kind a kind of is of mind biodiesel of you process

Jonathan Pertchik

Sure. Thanks, . Bryan

margin healthy diesel that volatility historically without anything not biodiesel a significantly that can a at that. what maintain So sense XX credit year, But tax of significantly windows to the is like of is that also an very this first early combined we on have sort it for positive, where, And address of of are levels sort we is first have my we incrementally XX, to historically on sort where last range. of and the level quarter view, overtime, those focused in reduces low do this below separately. my we like because of market end

so mentioned focused to I question. to are addressing very spectrum think there capacity that increasing I indirectly, of volatility couple a or on And, a is sort hold And be examples, we I it. inventory. a more will our a approaches of And of little specific

it when low from when is So more can buy we to and changes. have capacity longer it hold

very are diving of understanding. hedging then And the other is something we something of margin, the trading end and And spectrum contributes gives very, not is needle, it lows. is the It more they the really sophisticated. is is and so bandwidth a do hedging, and well. and separately and certainty And is into frankly, I think of that competitors very It on the end to something necessarily the that highs far narrower is our actively. do something that and more trading is that something fairly

pool. into too, that also we before smart be something is that are we really dive so And to exploring on want we just when

And those new with is margins. division that owning of are this part so is then, And two. really diesel universe things all

And say When of alone I So what on approaching just bulk, we ability regionally, index. loads are we cancel to an when but time of reenter by still to I what sort I buy a a and volume period the we can intro that make certain have we that, to buying in and buying commitments total be some all significant there in lateral theoretically place. optimized different contributes people is that change rests pointing of that parts level finger going toward to well is us no to that more different very of and margin. organizational now one over mean hole think

questions. an definitely are is indexed And saving one is hope in so that and are penny extent, changes And to any a that XX% times advantage. strong And time create will we it some some think the the from that your next answers why doing we what but for is now have belief moment in I’m moment already, realized we I to say I thing. that savings, when that

Bryan Maher

taking you. Okay, for questions. Thank thanks my

Jonathan Pertchik

Bryan. Thanks Great.

Operator

follow-up The Please Jim BTIG. is go next ahead. question from Sullivan a from

James Sullivan

by Jon, the centers stress Thanks. in your about company they the to know, earlier you elsewhere know, the, know, indicated are at centers, company do typically you truck be, centers filings, and expecting would that to have used would you properties, acquire the But to earlier truck practice would you to comments that, as leased and spend be that where, extent or I M&A CapEx think you company-owned and opposed to question you truck adjust. reimbursed service would you an mentioned to the that the in sites you not rent anymore. do be your the the

know have for that long-term we the know. I its know, you or of business, focus mean, in simply you the, the you them on in company question So investing liquidity and their kind in expanding I on own that, is I either the centers company buying have as is a waiver it guess is hotel capital current new the of had the the they they kind or do know, hand, CapEx, lack have spending of currently covenant that or the agreement place issues the centers a with shift other result of the a face. service strategy

that change So what strategy? of driver is the in

Jonathan Pertchik

just first instance company, we correct end, right. know, you mean, the is the trying the in I to are

planning is my the in provide Just right. as growth. I in sort mind said, preparation, and tackling interpretation, shareholder And of year are Ultimately value. long my the would your and this is run investing last know, that growth, blocking you that in we long-term

this growth about And, certain is opportunities I’m of stuff, leasehold the to your a things creates We you expensive. but that grow. to to effect engine. we efficiently need and company have have excited improvements and to more be really got financing And know you energy know, like alternative question, running

because know, is an that. value it say, it efficient fruit. provide concluding earlier great, fees, is grow is And support greater the than to so is all and is royalties, is low it that the incredibly going fair a is here it were we a is, you and strategy we I I and have And hanging shared to and think where since conclude very independent shift it that the I fleet is to and capital it are in that through proposition. franchise access simple needs people to other been

sort sustain word, is bottom just, that do to more So just obviously low-hanging XX scalable. the the easy. and new know, line it. way the that bottom energy organization not and same the At you the year contributes that, to more is compounding and more obviously it, contributive so is overtime. owning and new know, a adding much and just stores time if intensity. lot much as is intensive line it XX takes a growth. It necessary highly know, to of is that you on, of a if to is It relatively of you for we grow, in and And, terms is fruit support It you locations

sort to the we own, approach to where like combined I we acquisition. see bolt so extent And potentially a maybe we extent have some to opportunities of can the on cherry some can pick transformational

a lot a there more out opportunity. is And the fear is folks don’t that you that and in was to or extended there and than threat month, fear. I’m alternative a that chain energy bought a opportunities And of that for here if today. maybe to to threat But is will the it four-pack, more opportunity hand at company last my threat my is well-founded is XX some within thesis will independent own some low was. for It mentioned here, be of to the smaller that I have it about and I smaller an a pack smaller suggesting then on the bought know, I level exist know us, of think hotel other fear, of think guys later. of mind. an a You my The sort price I it six a not we there is point, scale. we are getting a months two infrastructure company, for highest extent

there think of this became are center XXs that the not this the post a I and that and that necessarily combined alternative may energy. XXs Generationally, in so, the or proliferation XXs an as of timing and dialed that And War with because be II in who and folks also about business the and getting they have the were family opportunities and XXs, World into business were the this business into fears and industry. travel business members into aging changes threat the industry may

secular I of dynamics think for create some of opportunity an sort those us. are

And very focused respect parts theory addresses will how are we but with M&A. of it owned. on see we plays your are that so, Hopefully out, to company But different we the your that question. through

James Sullivan

Thanks, Yes, Jon. it does. I it. appreciate

Jonathan Pertchik

Great. Thanks Jim.

Operator

There remarks. question-and-answer questions in has conference back turn this and This Pertchik are for would closing over session. to concluded. no to I concludes more our the Jon like queue, the

Jonathan Pertchik

interest for you great Again, day. Jason. guys. a Everybody morning. thank you, Bye-bye. in and TA have Thank attention you your your See this

Operator

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

disconnect. now may You

TravelCenters of America (TA) 4 May 212021 Q1 Earnings call transcript