TravelCenters of America LLC Announces Third Quarter 2008 Results

December 03, 2008

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TravelCenters of America reported net income for the third quarter of $16.66 million, but still shows a net loss of $41.56 million for the first nine months of the year.

During the third quarter, the slowing of the U.S. economy and historically high fuel prices presented TA with numerous operating challenges, according to their earnings announcement. TA experienced a 17.4 percent decline in fuel volumes for the 2008 third quarter versus the 2007 third quarter and a 15.3 percent decline in fuel volumes for the first nine months of 2008 versus the first nine months of 2007 (on a same-site basis).

Because of the higher fuel prices, however, the dollar amount of fuel sales increased compared to 2007, both for the third quarter and for the first nine months. For the third quarter, fuel sales were $1.83 billion, compared to $1.45 billion in 2007. Gross fuel margin was $85.31 million, compared to $54.96 million last year. For the first nine months of the year, total fuel sales of $5.42 billion and gross fuel margin of $187.62 million compared to $3.55 billion and $126.87 million in 2007. Non-fuel sales and margin were down slightly for the quarter, but were up for the first nine months compared to last year.

TA's net income, EBITDAR and adjusted EBITDAR for the third quarter of 2008 improved over the same period of 2007 by $33.1 million, $35.8 million and $28.4 million, respectively. In addition to some seasonal effects, TA believes that its operating initiatives
undertaken during the past year have been significant contributors to these improved results; specifically, the staffing reorganization undertaken to realize Petro integration synergies, the personnel cost savings announced in March 2008, the termination of the fuel marketing arrangement with Simons Petroleum, Inc. and several fuel purchasing and pricing strategies which were designed to improve TA's operating margins.

As of the end of the third quarter on Sept. 30, TA's business included 236 sites, 167 of which were operated under the "TravelCenters of America" or "TA" brand names and 69 that were operated under the "Petro" brand name.

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