TravelCenters of America saw its losses shrink in the first quarter, thanks largely to savings in real estate rent and improved margins on fuel.


TA's financial results for the first quarter of 2011 showed its net loss of $16.7 million improved by $24.5 million, compared to a net loss of $41.2 million for the 2010 first quarter.

A significant factor in this favorable change in net loss was the reduction in real estate rent expense that resulted from the lease amendment TA entered with Hospitality Properties Trust effective January 1, 2011, which reduced TA's annual rent payments by approximately $42 million.

TA's results also reflected improvement in EBITDAR, which increased by $11.3 million in the 2011 first quarter over the 2010 first quarter.

TA's fuel gross margin per gallon increased in the 2011 first quarter as compared to the 2010 first quarter, resulting in total fuel gross margin that was $10.6 million higher in the 2011 first quarter than the 2010 first quarter.

Non-fuel sales for the 2011 first quarter increased over the 2010 first quarter largely due to increased customer spending in TA's travel centers as the U.S. economy improves as well as from price increases. TA's operating expenses as a percentage of non-fuel revenues on a same site basis for the 2011 first quarter decreased as compared to the 2010 first quarter.

During the first quarter of 2011, TA saw a drop in fuel sales volume of 0.5 percent compared with the first quarter of 2010, which the company attributes to severe winter storms. Despite the volume loss, the chain managed to increase its gross fuel margin to $10.6 million, up 21.2 percent from the same quarter in 2010.

To try to take advantage of the recent opportunities in the travel center industry, TA has used some of its available cash liquidity to acquire new locations at what TA believes are attractive prices. Since the beginning of 2011, TA has invested or agreed to invest approximately $37.2 million related to the acquisition of eight travel centers. TA also spent approximately $15 million on improvements to its existing sites during the quarter.