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TravelCenters of America Inc. reported strong third-quarter earnings when the Westlake, Ohio-based company announced its financial results Nov. 5.
Net income marked a substantial turnaround of nearly $1.9 million or 23 cents a share, compared with a loss of $70.4 million or 20 cents a share in 2018. Revenue was down 1.65% to $1.57 billion compared with $1.65 billion in 2018.
CEO Andrew Rebholz said the company is in a much stronger financial position than it was last year, and it is seeking to grow.
“We continued to expand our travel center network during the third quarter, signing franchise agreements for three additional travel centers, bringing the total for 2019 to 10, of which three have started operations under our brands thus far,” he said. “We have a number of additional potential franchise locations in the pipeline and expect to acquire one operating travel center business and one development parcel of land in the next few months.”
TA officials said fuel revenue decreased by $98.2 million, or 8.4%, in the 2019 third quarter compared with 2018, primarily due to a decrease in market prices for fuel. That partially was offset by the increase in fuel sales volume. Same-site fuel sales volume was up 18.7 million gallons, or 3.9%, primarily because of improved market conditions and the success of TA’s marketing initiatives.
The company said its restaurant business remains healthy, and the recently announced rebranding agreement with IHOP will provide a big boost. Company officials said on a conference call with reporters and analysts that partnering with IHOP will expand its base to customers in addition to professional truck drivers.
“I am pleased to note that we continue to accelerate our restaurant rebranding program pursuant to the franchise development agreement we recently entered with IHOP to rebrand and convert up to 94 of the restaurants at our travel centers to IHOP over the next five years,” Rebholz said. “I believe the introduction of this brand to our travel centers will earn a 20% return on our investment, due in part to increased gasoline sales volume and additional store sales from the anticipated increase in customers visiting our sites.”
TA said it will cost approximately $1.1 million per site to rebrand the restaurants under the IHOP label.
TA’s business includes travel centers located in 43 states and in Canada, stand-alone truck service facilities located in two states and stand-alone restaurants located in 13 states.
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