TA - Earnings call transcript Q4 2021 | TravelCenters of America Inc

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Operator

Good morning. And welcome to the TravelCenters of America's Fourth Quarter 2021 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kristin Brown, Director of Investor Relations. 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 February 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

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

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

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

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

Jon Pertchik

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

strong, quality line businesses as drive consistency the XXth circumstances. the quarter well efficiency our to opportunities. into and Our model, achieved our bottom have operational our of quality the and improved further external positioned contributing enter ability well most we We believe business and financial pressures in and ongoing as demonstrates while extraordinary the fundamental inflationary well multiple pricing as of the labor with as these to continued resilience enhancing TA's profitability. on year and due COVID-related company improvement to through X performance reflecting and consistent challenges we challenging the years all despite of growth our results labor focus improvements, as We leadership and revenue and anniversary economic fourth the streams, execution strength the of of durable

results. Now to the

XX% $XXX.X up we For $XX.X EBITDA the quarter income improvement, pre-COVID with XXXX quarter, over XX% fourth adjusted over by fourth $XX improvement. notable a or million, to and is net $XX.X of that year results pre-COVID the following, adjusted EBITDA prior improvement to XXXX relative XX% fourth quarter. represent an improvement adjusted XXXX which million the also XXXX EBITDAR fourth XXX%, of produced quarter, of million, compared the adjusted of million, an quarter

that respectively. over we the with of component varying and XXXX the overall the quarter in prior history. X% XXXX the would this highest quarter, see proud the parts financial say contributing in I year we full most the adjusted XXXX to $XXX particularly versus year this the and effects continued our XXXX nearly me What I margin X% non-fuel versus company's despite which degrees business gross fuel am I is million, full in improvement, the XXXX EBITDA the enthusiasm, was improvement have for recorded producing of year chain of results the strong and quarter margin, increased continuing that the input XX% capital that and pandemic, had including Additionally, our the as X% note up supply excites of pressures our disruption, and have costs, barely robust deployed. fact the well as inflation of impact plan been on begun labor to to and

in well have at as to growth discipline to efficiently increases, priorities investing that passing pressures same and through center and TA as sourcing comprehensive line monitoring acquisition products pace of was transformation we ramping in about enter talk top forces full the opportunities, inflationary hours, our growth improvements, growth. ensure to of growing bit I of shelves XXXX. the investing [ph] improvement up opportunities, in operating much invest forward terms travel continued to to CapEx in the is the a from shifts pipeline remain strong look in through We gaps underway site harvesting operational growth. and of little and in these want developing program, franchising cost managing beginning remain labor a successful as to organizational impact refresh plan and quarter gears as a fourth IT carefully

the an number of current construction as to our largest is based thresholds. we $XX end, two beginning as exceed To to minimum sites March flagship travel agreement closing substantial this center return in once approximately purchase currently to is Financially, at comes we that to which customary First, for maintain on to that close franchise accelerate, this we to million, capital late a transaction are completed. these existing TA understand to acquisition which United a sites our in truck parking be we important have is subject a This and liquidity as expect it States in the spaces locations adds our is and is conditions. continue will plan we confident place cost. a will deployment important iconic location location company-owned acquire

small is highest our expected which in mobile to of facility, We also in truck one to business acquire have maintenance. late segments, service growth us place customers close will acquisition located This a our key strategically to purchase agreement March. better a in allow serve

We XX previously And travel land owned, had are will by consideration. ground-up of through XXXX. of to expect have million open the we developing two XX potential which we centers approximately on also end sites moving later [ph] new phases the $XXX TA acquisition totaling

rolled program, XX Another franchise XX locations a with being flooring parking lounges, since flow. area other XXXX, growth October store more signed amongst of refresh Seymour, and top the repaid first represents many be of open of is during the franchise are the of driver level and TA XXXX later of our and by agreements new investing of restrooms refreshes. improved fixtures, also the include next showers, as XX renovated XXXX Updates franchise XXX no We self-checkout, we in quarter year. paint completed comfortable new past Investing was XXX that second robust the same the reopening the refreshes our growth site operations along lots, level in period. locations toward and and Seymour franchises through continue anticipate XX of Indiana, plan new of new and lighting our this than new target to concepts have and launched will in signage XX of franchise total sustained begin year. platinum showcases opened our beginning which with refresh program. includes out we and new than many new early new design per

first We end by of the March. the expect refreshes to XX complete

sales upgrades efforts and various also digital growth in talent well people, IT key includes initiatives, and investing investing and systems improvements. and in our expanding Finally, marketing additions traditional operational and as in as and

adversely deployed performance. and in challenges as choke thus has XXXX, to improving impact TA these remarks. designed some plan intended pace of of of on in focused examined the robust of and and discuss to disruption. their planned will needs will steps improvements positive assure resilient efficiency taking confident financial in Overall, our All last our experience based his capital XXXX I deployment increased. more understanding chain guest a by our In investments and supply already financial have capital was drive Peter and and in impacted be it can around has on established pace points is the remain are performance. far, our and capital year's

compared customers, volume Turning X.X% prior now versus the fleet a volume as of addition new by to fuel operational customers a quarter diesel our higher XX% from the initiatives. and due as trucking sales success of a to to results as for increased of the quarter. X.X% in Overall sales the volume, variety well quarter, fourth fuel activity, driven increased increase of early year XXXX the result existing

in increase the gross fuel year versus margin Our by XX.X% margin prior driven XX.X% quarter, a CPG. increased fuel

and experienced positioning to of take have In allowed importantly, spikes while decision Staying energy capitalize management testing supply and about of the diesel TA to indices. parts diesel, markets beta learning diesel introduce and this our upside. we machine markets to and between mid-year, to competitive in by artificial on are optionality X.X% locations with diesel of be diesel major pre-COVID have should ourselves XX but that area December, cause Gasoline below much Southwest QX. which supply selling the margin Improved stable dislocations. about increased using XXXX and in represents shortages due versus for drove roughly local the particularly offering support intelligence impactful. begun in our advantage purchasing phase to pricing a pricing purchasing to additional another tremendous on and the Also strong dislocation We potential XX% and still we dedicated volume driving prior of small the quarter opportunity was fleet upside certain quarter, Midwest year focus sales of the fourth and regional making. margin,

side XXXX over of the and by store XXXX. for the quarter X% services increased versus versus the On XX% over non-fuel revenues retail business, and

larger to purchasing industry is experiencing our initiatives we our ability on inflationary is evidence also focused challenging a pricing that are basket have environment, balance a to cost and working. forces, these drive while our average Although

comprehensively who Our our customer customer's offer revised part central reducing efficiency also areas to turn us I'm in better allowing versus turnover. placements. in with more increase with a times XXXX, compensation is improvement focus which and meaningful us service and continued customer very in to program segmentation an increase are, new in around year to with display a and orders. by work wait tech of remain work. and training and increase solid driving Technicians segmentation and areas a versus revenues retention XXXX X.X% average loyalty their XX.X% and understanding our important what excited work a targets driven our Truck improvement an designed by we has needs showed offerings of to staffing product driver visiting expect that provided behaviors end tailor is actual

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market inconsistent We addressing pricing actions, and are actively not with these expectations. through competitors

On to fewer, more menu service well disciplined to labor strategic restaurant how have reopen changes and we model worked as operating to through rationalize locations leadership the balance we our side, and full performance, as rising tighter controls measure to desirable offerings through wages.

have opened the of by two this XX conversions the underway, continue to that and IHOP We expect five of are make opening a quarter other end plans three total toward of to the IHOPs. open

top versus fourth highest to is our developing the continue around our Non-fuel in which line of as the differentiator, of are trucks. this remains months. understanding of other the of needs in In volume been coming versus With demand quarter adversely and XX.X% or we DEF, XXXX addition, recognition times by so and and deep pandemic, XX% restaurant an newer announcements this required to performance. exhaust look Debt affected XXXX forward as revenues that benefit by areas for one fourth X% increased concepts for business low financial having diesel fluid, further scrutinizing of work the also XXXX improved quarter. full down into from is by the designed opportunity strong service customer's important the

will DEF As pre-XXXX year, that for each expect we trucks to the grow. continue are retired demand

the lanes of on from approximately now in TA dispensers plan, all As diesel nationwide XXXX. expect of our fueling have the DEF by centers to and end at capital Petros them of XXX travel we all at part offering the are island available

formed our alternative sustainability double to business on energy continue to we division with ETA. commitment dedicated Lastly, and the last year, down

of we locations, billion are to preparing the new charging per of federal particularly fast installing XX% much financial addition EV are Coast provide passenger has as at Infrastructure earmarked in of plan project vehicle installation The cost incentives rollout passenger specifically duty across funds announcement stations site. $X.X In which EV for federal EV as Act for West of the more carefully recent November made available. the very country, being and several passed chargers, comprehensive will state where targeted

On ETA, are fleet the to as customers' sustainable develop commercial we actively to our government as duty energy and deliver truck various relationships We've multiple collaborative forms to pursuing plans, grants incentives. close side and we been well awarded as programs continue of more. of for stay

and across In organization addition, sustainability framework. evaluating part programs we of currently an see our expanding the reporting of development are we where ESG gaps the as

and this gears year franchise, We continue continuing improvements thin, is stable improvement. company. family, labor report our plan execute demonstrably first and inflationary remain goals. as toward XXth planned to The month supply outlining our our institution proud acquisition, resilient am top entire the worked plan XX team ourselves fourth and generated the this an confident and achievements To and working, of our the also to ongoing line despite as proven can Through the unlock quarter conclude, to transformative ongoing Sustainability and expect to-date, we our in that old I investments issue development, in release strong of ability we improve that shifts investing refresh, we and longer the have in American of transformation and for of thick growth year, value results positive proven strong, to great through we behalf this challenges. people, site Report later ever consistent is term inherent now on On year. TA chain have we in has and and and the IT

half history, its long-term century shareholders not celebrate only we value. team recognizes of to to our the As obligation create

delivered offer franchisees who as well hard an at fleet work for sense their to to those managers our I value of offer mates dedication over we to exceptional that our and stockholders new on the with and most we and came gratitude progress of continuing also transformation allowing for XX obligation TA. plan TA. past and of investing you. has as country am in our improve overall the into before gratitude and transition a months growth, early with am for as serve phase still team In detail. will and that excited are TA continually professional to of I support I colleagues discuss Peter us call to innings all over And guests, we only quarter's drivers I addition, to pleased hand our I the in results In the our team the that, transformation. the financial in behalf Peter? closing, around our

Peter Crage

And you, everyone. Jon. good Thank morning,

results to business my XXXX the pleased generate unless are strong the fourth compared this we as XXXX cash the the we that otherwise quarter important in referring quarter, objective. an In noted. which long-term improving I strong ability free flow, of to will mentioned, Jon continue be fourth very follow, quarter, remarks As our with to demonstrate believe to results produce operating and and fourth

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

the margin, by labor both strong quarters, due in economy. increase increased $XX.X and and items XX%, $XX.X partially gross increase some quarters, as million was while million or income. as or The in affecting of items we EBITDA in an both operating which as broader earnings of improvement over one-time well one-time adjusted in represents EBITDA, EBITDA generated Excluding in XXX% both increased to generated some offset input, an results net our XX%. release, $XX.X in us reflects million fuel costs detailed non-fuel primarily of the we adjusted

depths of increased gallon Our increased and gross to sales quarter. $XXX year as gallons fuel of to by by Fuel continue volume the sales X.X% diesel million per and volume $XX.X sales just from to versus XX by volume XX.X% roads or or margin improving emerge million improved by XX.X% pandemic. million shy $X.XXX XXX margin million trucking increased or traffic driven returns prior we as customers. Gasoline X.X% new to the to with gallons, the improved X-wheel the cents activity X.X%,

CPG December. Jon market to anomalies take saw in in temper As volatility they positioned we advantage discussed, ourselves when and pricing occur as we the have of to in

blended of or million gross for these However, margin $X.XX note are types revenues future. X.X%. total in quarter Non-fuel And the normalized that we increased non-fuel $X.XX to a every million foreseeable continue CPG anomalies or margin we expect therefore, would our not by our for of to X%. $XX.X by $XX.X given increased and fuel range

offset COVID-related full to and which service service, improved by X% the and during labor compared store, many quick revenues strength restaurants, XXXX, non-fuel restaurants margin in softness fourth intermittent roughly relative when service hours. and reopened X% XXXX shortages in Importantly, and diesel quarter were locations fluid the exhaust by current respectively. quarter, as Against seen operating reducing gross partially have closures truck

aggregate respectively. input While the laser-focused and we sold increased [ph] by million backdrop. we are growth, operating expenses cost line economic million goods continued and top on $XX.X broader that Non-fuel cognizant of of and part level operating $XX.X site pressures are cost are about

While continued rate activity, primarily and continue. reflect business cost input revenue pressures these improved labor and growth

$X.X by of impacted profitability. operating quarter we and in demand bolster but administrative general non-fuel actions, as quarter-over-quarter And basis. successful While thus the or cost expense not measuring the ensuring on these significantly focused a keenly XX.X%. pressures been far counteracting we remain XX also vigilant remain for million identifying on improved increased have gross only support is basis Selling, pressures, to points to not of We in appropriate example, efficiencies for pricing a impact margin we sequential course, result.

by fees and identifying driven consultant more the and term business, as of In assist and adoption opportunities, of incentive addition other part to the to efficiency in technology efficient well cloud-based expansion compensation short increased and implementing was increase our our stock-based with as solutions.

margin beyond benchmark further a we fuel we X.XX% revenue as run relative some As initiatives growth a for of to Internally, we XXXX in to be of deploy the establishing a company forward the X.XX% business in are see on SG&A. the important basis gross Jon to of into and plan, non-fuel our range likely in and rate costs cases, and, detailed his host plus and foreseeable the other capital elevated the one-time expect move SG&A grow plus future. remarks, will expenditure to of in

expense up Of this impacted toggle we slightly or that due unique Lube decreased million, in we we the by related one-time XXXX. will in incur primarily million recognized ultimately $XX.X promise those restaurants charge may Steak in be $XX.X course, and Quaker year and amortization or costs on down returns. Depreciation a to outsized of prior impairment cases, as & quarter costs. off to the April sold But

and available million our total of moment. for liquidity December revolving availability of balance and a of Turning credit under - million to our $XXX $XX $XXX equivalents sheet we XXXX, no million At XX, debt facility for a cash and had maturities. cash near-term

of unencumbered quarter debt. during $XXX.X capital XX, and million fourth travel expenditures stand-alone one for and XXXX, that continue XXXX. by were we We invested As facility service year the to $XX.X centers full own million XX the December truck in

that whole, the directly either of to progress indirectly our along are and continued and, some projects. start vendor certain capital slowing as chain the mentioned, US the supply labor Jon in a our cases, significant of or As experience challenges with partners we, through

in XXXX, acquisition of some part plan early XXXX this this up abate CapEx $XXX tuck-in supply cautiously challenges and between million expenditures eye believe At for million year. will ground optimistic some pursuing planned any into we on spend capital cash are a This fallen making have XXXX. $XXX are incur an that the XXXX as projects the from of in excludes activity. lost our we will While with time, we we we somewhat aggressively chain to

evaluate important strategy. believe addition development travel as this to CapEx, Lastly, we pipeline and will continue growing are of year, concludes to structure. a We the And progress in execution sheet accretive acquisitions to preservation potential the our to That balance our and opportunities. significant opportunities questions. remarks. growth as preserve center prepared take consider we of timely Operator, is liquidity liquidity secondarily, our ground-up the now through we constructive of capital ready we we also to be on

Operator

come with B. [Operator Bryan Instructions] first Riley from question Our will Securities. Maher

may You go ahead.

Bryan Maher

thoughts been on of really $X.XX in it congratulations two when hear of on think from been quarter going really, in past, we think your I a on to critical gallon versus I little easier really morning. and with done. kind Peter, row tuck-in the is prices that the $X.XX $X fairly elevated know, to commentary somebody and $X.XX to a comes about and Question But year, it they've a And or the has $X.XX Midwest isn't diesel bit the an Good this where nominally, fuel a on you anomaly great you a when Jonathan margins, said third fuel expectations was did ago $X? extra kind your prices well And $X.XX in who to elevated. year forward. or X higher the so

Jon Pertchik

well, of the kind Thank we Hey, your proud and for are and question Bryan. very Its year. the Jon. remarks you for as

made much we're and the and general talking signaled next then, comfortable COVID we're COVID we've sort to doing much fuel times through and we thick and the better and so runway the without chain phase to just COVID margin. through to a and and We've many crazy comfortable more fuel something. have on If find you volatile times the runway XX anything XX. additional with two through ultimate more business times. answer we different us. managing ahead. thin confident place doing the issues really XX year our more of in of than more We've changes with. our pricing, of and market question been continue maybe supply we to movement, for and now, in a said, while - In is, secondary than proven way window we comfort we to a margin, can XX - or And the now or from some would a and to finding confidence than a fuel opportunities behind really times can signal I So, from get restore I'm the it we build might store just of And this from with level. for some signal your manage continuing right. maybe year in and and, better differently. a extent, We're those high going, are to we non-fuel XX the comfort future we job that movement CPG That's manage gas the signaling diesel. are some will can That to zone, we how we've in and that is blended optimizing of and getting we job we between that doing resilience not to said, counting we not a want now, this point has now. business But really of we about even of XX sure and really a marketplace, just penny make something volatility. But some or at a remain But that we're fundamentally what business find to find where I'm

sense. that makes Hopefully so, guns And XX holding XX. we're of to sort our at

Bryan Maher

of SG&A, gross those X.XX. on just to of percentages was clear, X.XX to on and a revenues non-fuel to helpful, And the of Okay. kind be basis. fuel And that and the then, margins quarterly moving combination

be to of So, should degree? a expect well business, as seasonal given SG&A it's kind kind seasonal we a of to

Jon Pertchik

take you that, don't why Peter, Peter?

Peter Crage

we're a to annual to the term. annual down incurring provide see be. on basis, I was on we that help annual an starting we some costs And really what over longer gauge at on In may on guidance investing trying going SG&A we commenting see this basis SG&A it business an appropriate was top would and might line was our way to seasonality. given and info. expect thought least basis, I that's Yeah, on But quarter, may we on to quarterly be provide that what a some the give some to an measure growth. a

Bryan Maher

And me, on thanks. Okay, helpful. the commentary was the acquisitions lastly then, for

on likely the I two Can for bit and to share multiple paying there them for upon EBITDA a where you would types being think a largest what regionally? be properties, little you give one was want that you don't share maybe US. is, said more the you us of travel color if you that? properties completion specifically of center of million of And whatever, could $XX with if kind or in those

Jon Pertchik

Sure.

separately It parking So, we're that and it's I correctly, mention small We is guess, two say some it's truck US, of Southeast speak. true. hear acquisition, travel center a a you just packs, again, knowledge, an to - did so expanding did that separate with other work. all, point say two first some service existing in from the would locations, is so we'll the XX. I which, has was

we that's truck on at largest say So completion what will become, parking. it point, based we're active when construction, to of that the referring that

terms minus five realm Anything at. to in that multiple, what add to times to is four Peter? that, plus or of looking In we're

Peter Crage

Yes.

I on think, closer if non-synergy you six a five to [ph] a maybe that look basis, at times synergy-adjusted to on four

Bryan Maher

queue. you. Okay. jump from all the back That's me. in I'll Thank

Peter Crage

and Take Appreciating the remarks Bryan. care. again, of kind Thanks, appreciate as well.

Operator

coming next question Lejuez with Paul from Citibank. is Our

go You may now ahead.

Paul Lejuez

'XX? in the refreshes once you've franchise the Thanks, F that complete. Thanks. you what guys. if new little is locations revenue second, from on seen site XX a in lift the you each expect then, give And you increase on info can Curious sort more bit curious took Hey. of volume

Jon Pertchik

I'll of about You want to refreshing first, the Peter, line the on take part franchise. talk the then that and latter

Peter Crage

XX% they on for once traditionally improvement achieve can exact lift have our revenue. each in to don't The franchises XX% seeing we're I enter franchise. But franchise, numbers system

granted equate of doesn't because those in sort fuel. to is range. seen quite of that that automatically that in we've But Now, improvements franchises line, bottom a bit

Jon Pertchik

And about to measure large the talk XX% real and to an volumes now that that joins just see EBITDA they I of - accelerating fact to fleets sees And that and is significant. site that those truck discounted, then access XX% XX% it's but large still fleet joins And franchisee network, an the The so to stop see, joining nonetheless numbers are truck understand these lift we think, reemphasize little because less I'll when are why the in these that's these lift we of that network it's a independent last terms very lift, gives franchise actually the offer. some the of upside with we at because program, very to discounting it's - them network. while stop. that one than on to just and a refreshes. are obvious our independent When the a point, XX% reasons

now we for on it XX the On about refreshes, really think that. which our the the lift, completed, expect about expect the and again, have excited way to we through and site we're way we working of March by end

a several little some going visit them. really months to roadshow touch next see over to of I'm these fact, In on the and

be that. disclaim, more, these to to $XXX,XXX which gold are to on On range of XX% XX% on a million the gold the levels silver $XXX,XXX return we from could silver, gold and hair even maybe the threshold that platinum, that the invested, [ph] expect dollars low a we $X

non-fuel. and path you line some discern locations – between results. of in our So we confident you some little there we're in ability different and It's fuel yet to But bit will get those know, that just – sort than punch one a know, and you a may be achieve by pretty can another. don't

Paul Lejuez

luck, Good you. Thank it. Got guys.

Jon Pertchik

it. Appreciate Paul. Thanks,

Operator

comes question next BMO. from Klein Our Ari with

You may ahead. go now

Ari Klein

good you give some talking you investing about for Thank EBITDA? Jonathan, model, for a the time Can on expect you. maybe morning. you to longer-term how growth. to And spent expectations talk that us in can sense manifest you the

Jon Pertchik

the not we're a longer are or at far had almost many our million EBITDA XXXs to-date we've momentum success We're I performance, gone And ready we EBITDA. $XX signal a actually have little I anything - in company. debating away XX know, from to where X key that want still Yeah. the bit we're really much fall year, little north ongoing I'm I something to we have We've organization. an than is along. and of and take from signaling this further quarters, to guess, healthy we of something a back, been of And within eight facing really XXX, optimistic longer-term. and to the months we've sequential while term now what I of get signaled do from heavily, in lot point debate haven't plan year we're we because capital can low the the in. pre-COVID, terms years of we coming

one chain. like have talk And inflationary procurement our mean? the On our find something shelves hand, does we forces that our It means on other to that item. people and chain. people words fighting get and because supply about our we fill are we hands these supply scratching What hospitality can't to

fighting to and kicking we're scratching fill and with the So other.

throughout are sick - persists sort we least we last hours stay so we've when work that finding gets saw that hours. positive, very year, are And really them. face the have pressures, we gaps around somebody people is means day. quick COVID, year, is folks or open. who the heavily labor be at to of in last of to hours we restaurants this to second somebody service full all tests our And of in When of ability every or And quarantine now what and half say and what challenges it when can our had these full concrete open so,

those gave capital for world that And of quite just So, and headwinds some and signaling taken not of appreciate do of field, plans anything so company mean, just one there just but Again, on that yet of of really, that you yet. not face examples in speaks we the think that really sort And I is that's these to hand, a itself, I unique corporate some other fighting than we've us. manifest. but amazing great not hopefully, where to on numerical better - and But the out people some what an understood to most I fight. of these place, visual a really, plan those world some comfortable done fight exciting challenges, We're the job, get we'll we're have the can you on on day I not far hopefully point, this these. the headwinds some in comfortable team, amazing we'll by continue other, that through way not hand, yet am is signaling the of every the momentum specific. And have concrete tempered we've volumes or facing. anything now. job, how sort very because will I an these not people the more to at for think done At

Ari Klein

Okay. on perspective? were just about How a on Some of that headwinds that plans have cost a the the CapEx delayed And from from perspective. you What some cost Thanks you 'XX you of impact mentioned you the for then, side, side had from XXXX. for… that. CapEx inflation the seen to

Jon Pertchik

Well, one all, of point. first so Sure. just

$XX think you we against $XX of spent, million this think, is I last now, mentioned in expect year, fourth - If that the quarter he I the $XXX we million specifically, just remarks, - for million had year. Peter's CapEx

that so any to ability more at years starting really It accelerating when easier should gotten that that accelerating. is ago with do making to constituted our better dealing execute. spent So, one chain or We're XX% that's it challenges is supply that we in getting What doesn't them. is haven't. it's the X.X which just they And was is this mean everybody say have accelerating, quarter. tell team, just point mathematically than we

all update to and in thinking plans we pro revise to and at we of on we bake context achieve and our look sort of and know, You headwinds, increases forma, we our the we do to at we at into cost performance that. those thresholds. look continue when do continue and increases performance of look We our of going all how we're

a then of - a - as that pricing Peter it's science committee increases. with and that art to reorganized globe, just continue the the sort a a very country myself we focusing And maintain everybody, opportunity it's we're those the increases. manage continues on to that that. not very, actively unique really, That's this far, these ability despite so and includes every will we're far, confident our how and really some output extent, again, and And is of really And But costs in company across facing are focused is at to most you're to oversight part successful a part it much this had important as before of success us and those to is make country to input to top regularly around decisions it remain threshold as our we've as probably have. is engage these be of optimistic, right, think bit I'm little managing the success, - sure so to to board, those and really of discussions that. we're I we science to is special in date. on challenge we've real continue of our to And execute some levels on just going

Ari Klein

last gone for a the seen these expectations the of to moderated How or last me thinking a just for that to volume lot Okay. in We've continue growth as growth has forward your volumes? are one comps about that year you And the on grow volume piece then, moving have in fuel tougher. But bit side. so.

Jon Pertchik

would becomes many, significant first, high low many very years, growth or Mathematically it's right. mathematically have, impossible Well, I compounded double-digit say, but really double-digit over still to say, impossible. it

management is so around just mathematical We're continue here. is And The math in also anything and still two we're front few in have the machine this that's us. support been focused really That's we've and we opportunities of very both separately, ahead fuel growth CAGR-ing are still thing to it then, And so there. significant. pricing is just business, can on we AI fleet very still that point of A. are beyond. mode focused a a where retooled - so, there learning on organization of a One a our of that testing have we've that and small us supply have And never part - to some sort way. sort in point beta you B, a and question, and mid-year of it of really primary way meaningful areas and

it, months sort to talk salespeople discounting will and provide and program, We've a real away many when call added area. releasing in - a some we're else's somebody will credit ability to now about on mid-year, so, And investing that we've few from we that a balance just the extend of, provide growth, program sheet. it developed

fleets, first the to which our a for so, part we're going have program of And time, is meaningful margin small highest our for business.

this really be So, program toward of again, in the have Even That the comprehensively half of be back will loyalty end year. opportunities year. of those we our the front will us. retooled

well. feel real as And the that sound temper but some helpful otherwise be like we the very chain a indirectly don't record, supply or enthusiasm broken are like driver day shortage, disruption, directly have. face think challenges we great I I on I there's other hand, these again, of every

and to has and other, more a really the rate, where, of right of balanced think, view continue A, the have supply that a high at a related. it's thing chain challenges, one B, continue and challenge within CAGR-ing a But of level, again, putting a in I we'll to we unusual foot So, again, a context at mathematical lot driver grow. modest all certain we do, shortage front

Ari Klein

color. all Thank the you for

Jon Pertchik

Thanks for questions, the Ari.

Operator

B. from Riley Our with next question Securities. comes Bryan Maher

ahead. go now may You

Bryan Maher

Hi.

this kind your year. Just of a for build-buy on question follow-up thoughts

buying ground $XX million, million million, these of all, kind mean, I building, contemplating you're what new kind you the of about we when $XX When First How allocated how of ways to million. between developing mid-$XX versus think should I $XX grow? you are costing to low facilities a that? then do remember anticipate days? it was dollars two those total and of time weighing

Jon Pertchik

first, range, target high-teens high, teens. the still So, is high

get flow as I that's of - EBITDA reasons - acquiring stops So, about right. cash And you immediately. you're like existing truck one buying and we I think like the directionally

our You're X inflows transformation. to X and not sit of outflows to we waiting where in years get

back, the of [ph] strengthen truck other leveraging on to not locations, effectively buy balance after We're development. both a it's and the focused either of ourselves, next build of years at and that X flavors flushes point where - opportunities grow. them speak, are think buy started lag we people's really, really math buy because a build and sites either cherry stops still iteration well, evolution my is while we exclusively buying the growth so that on, to you to said, and are geez cherry there pick, because point in for they you of existing. to the great few If about sheets where here, is raising, well, months first colors. way to of maturation and - franchise In our the in are turned come all case truck to in Once picking existing great we existing more spigot one stops,

US, the EBITDA have a one not of typical. so more million in typical X.X as the the So it's to in we site we fit even mentioned, largest may our A EBITDA, the dollars is performance realm. and of one referred to two couple network, X.X, criteria the X transaction extraordinary, long they maybe and basic that our in for of the for parameters financial

so and of need a bit different something they're doing to end, the machine, in going. machine a pace. up going. get come down I'm And great pace they to exactly, and doing a competitors have need a and we job XX going not speak. in start ground you get with to do In now directionally we're setting XX pike a of gets see machine to many they to the doing that little years Whether We're in one the a to ground be of so, sizes of to to we'll years. And there now to because really I'd or year And sights few machine it doing that, a corridors is filling our setting. eventually have that flavors, both not great that but like not, from up our

this at so we case, will expect, the And XX% minimum end, about. that's what XX% what - of that's a And the returns. we any in it's as In threshold to look maybe because bit we're with some ground and risk than of higher doing development risk up even little a and just you're whether even all that up ground cycle and that. undertaking and

responsive, hopefully Bryan. that's So

Bryan Maher

much. Thank Yeah. That's you perfect. very

Jon Pertchik

the for follow Thanks up. Yeah.

Operator

question-and-answer back This any would I closing turn concludes to like our Pertchik, remarks. session. the for Jon CEO, conference to over

Jon Pertchik

TA and your Again, interest attention thank Bye-bye. day. you Thanks, in morning, for great your this have everybody. and a

Operator

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

You now disconnect. may

TravelCenters of America (TA) 23 Feb 222021 Q4 Earnings call transcript