<PAGE> 1
EXHIBIT 99.1
Contact: Michael O'Connor
TravelCenters of America
440-808-3049
440-808-4458 (fax)
o'[email protected]
TRAVELCENTERS OF AMERICA, INC.
REPORTS RESULTS FOR THIRD QUARTER, NINE MONTHS
WESTLAKE, Ohio, November 8, 2000 - TravelCenters of America, Inc. today
reported a net loss of $0.3 million for the third quarter of 2000, versus net
income of $0.1 million for the same period in 1999. For the nine months ended
September 30, 2000, TA had a net loss of $3.2 million as compared to net income
of $0.2 million for the same period in 1999. EBITDA (defined as net income plus
the sum of (a) income taxes, (b) interest expense, net, (c) depreciation,
amortization and other non-cash charges, (d) transition expense and (e) gains or
losses from sales of property and equipment) for the three- and nine-month
periods ended September 30, 2000 increased by $0.2 million and $6.6 million,
respectively, to $27.6 million and $77.4 million, as compared to $27.4 million
and $70.8 million for the three- and nine-month periods ended September 30,
1999. On a pro forma basis to give effect to the sites we have acquired or
divested during 1999 and 2000 and the effects of the debt and equity
transactions we expect to complete with respect to our pending acquisition by
Oak Hill Capital Partners, L.P., Adjusted EBITDA (defined as EBITDA plus the
start-up expenses of newly constructed sites) for the twelve-month period ended
September 30, 2000 was $108.7 million.
-more-
<PAGE> 2
Page 2
Results for the third quarter and first nine months of 2000 reflect
softer demand for diesel fuel on the U.S. interstate highway system, primarily
from smaller trucking fleets and independent truck drivers, as a result of both
the sharp rise in and the volatility of diesel fuel prices experienced during
2000. In July 2000, as a result of the sharp rise in diesel fuel prices, which
was driven by crude oil price increases and reduced domestic crude oil and
refined product inventories, TA instituted a more aggressive street pricing
posture in order to reverse the trend of declining same-site diesel fuel sales
volumes as compared to the prior year. Thus far, this strategy has been
successful by reducing the shortfall in same-site diesel fuel volume from 11.3%
for the second quarter of 2000 to 6.0% for the two-month period of August and
September. For the three- and nine-month periods ended September 30, 2000,
same-site diesel fuel volume sold to our trucking fleet customers increased by
2.6% and 2.4%, respectively, as compared to the same periods in 1999.
"Despite this difficult period of fuel price volatility, sharp rises in
crude oil prices and lower refined product inventories, TA has delivered
increased EBITDA to investors over the three- and nine-month periods ended
September, 2000," said TA President and CEO Ed Kuhn. "By adopting a more
aggressive fuel pricing position and by increasing higher-margin, non-fuel
revenues, we have been able to offset the effect on EBITDA of the slight
decreases in same-site diesel fuel sales volumes. Operating expenses as a
percentage of non-fuel sales were also lower for the three-month period ended
September, 2000 as compared with the same period in 1999. In addition, we
launched our new, state-of-the art, customer loyalty program, called the Road
King Club, in September. Driver response to the card-based program has been
tremendous with more than 200,000 professional drivers enrolling in the program
during the first four weeks." Kuhn added, "We believe that the successful
roll-out of this customer affinity program has contributed to the 3.2%
-more-
<PAGE> 3
Page 3
increase in same-site diesel fuel sales volume in October 2000 as compared to
October 1999 and will continue to have a positive impact on diesel fuel sales
volumes in the future."
Revenues for the third quarter increased $120.2 million, or 28.5%, from
$421.9 million in 1999 to $542.1 million. Fuel revenues increased $106.6
million, or 38.1%, non-fuel revenues increased $14.0 million, or 10.2%, and rent
and royalty revenues decreased $0.2 million, or 4.0%. The fuel revenue increase
resulted from significant increases in average diesel fuel and gasoline sales
prices of 46.4% and 32.0%, respectively, over the same period in 1999, partially
offset by a decline in diesel fuel sales volume. Total diesel fuel and gasoline
sales volumes in the third quarter of 2000 were 345.6 million gallons and 30.8
million gallons, respectively. Diesel fuel sales volumes decreased in the third
quarter by 6.8% as compared to the 1999 third quarter. The decrease in diesel
fuel volumes was the result of an 8.0% decrease in same-site diesel volumes,
partially offset by gallons sold from a net increase of three operating sites
added to the network since September 30, 1999. Non-fuel revenues for the third
quarter of 2000 were $150.6 million, as compared to $136.6 million for the same
period in 1999. The increase in non-fuel revenues was the result of a 2.4%
increase in same-site non-fuel revenues, combined with non-fuel sales from the
new sites. Rent and royalty revenues have declined as we have converted
franchised sites to company-operated sites.
Gross profit for the three months ended September 30, 2000 was $117.9
million, compared to $112.1 million for the same period in 1999, an increase of
$5.8 million, or 5.2%. The increase in gross profit was primarily due to
increases in non-fuel revenues, partially offset by decreased fuel margins and
reduced rent and royalty revenues.
-more-
<PAGE> 4
Page 4
Operating expenses increased by $6.1 million, or 8.1%, to $81.2 million
for the three-month period ended September 30, 2000 as compared to $75.1 million
for the same period in 1999. This increase reflects the increased number of
company operated sites, as well as increased operating expenses to support the
increased level of non-fuel sales volume at continuing sites. On a same-site
basis, operating expenses as a percentage of non-fuel sales were 52.1% for the
2000 third quarter as compared to 54.9% for the same period in 1999. Selling,
general and administrative expenses decreased from $9.6 million for the three
months ended September 30, 1999 to $9.1 million for the three months ended
September 30, 2000.
For the three months ended September 30, 2000, income from operations
was $10.5 million, compared to $10.9 million for the same period in 1999. The
decrease of 3.7% for the three-month period was primarily attributable to a $1.3
million increase in depreciation and amortization expense and a $0.5 million
decrease in gains from asset sales, partially offset by the $0.2 million
increase in EBITDA, a $0.8 million reduction in transition expenses and a $0.4
million reduction in stock compensation expense.
Revenues for the first nine months of 2000 increased $453.8 million, or
44.0%, from $1,031.9 million in 1999 to $1,485.7 million. Fuel revenues
increased $392.0 million, or 59.3%, non-fuel revenues increased $63.3 million,
or 17.8%, and rent and royalty revenues decreased $1.4 million, or 9.0%. The
fuel revenue increase resulted from significant increases in average diesel fuel
and gasoline sales prices of 58.3% and 41.3%, respectively, over the same period
in 1999, combined with a slight increase in diesel fuel sales volume. Total
diesel fuel and gasoline sales volumes for the nine months ended September 30,
2000 were 1,017.5 million gallons and 75.4 million gallons, respectively. Diesel
fuel sales volumes for the first nine months of 2000 increased
-more-
<PAGE> 5
Page 5
by 0.1% as compared to the same period in 1999. The increase in diesel fuel
volumes was the result of a 10.3% decrease in same-site diesel volumes,
partially offset by gallons sold from a net increase of 17 operating sites added
to the network during 1999 and 2000, including the 16 sites acquired as part of
the Travel Ports acquisition in June 1999. Non-fuel revenues for the first nine
months of 2000 were $418.7 million, as compared to $355.4 million for the same
period in 1999. The increase in non-fuel revenues was the result of a 3.9%
increase in same-site non-fuel revenues, combined with non-fuel sales from the
new sites. Rent and royalty revenues have declined as we have converted
franchised sites to company-operated sites.
Gross profit for the nine months ended September 30, 2000 was $338.6
million, compared to $298.9 million for the same period in 1999, an increase of
$39.7 million, or 13.3%. The increase in gross profit was primarily due to
increases in non-fuel revenues, partially offset by decreased fuel margins and
reduced rent and royalty revenues.
Operating expenses increased by $33.5 million, or 16.9%, to $232.3
million for the nine-month period ended September 30, 2000 as compared to $198.8
million for the same period in 1999. This increase reflects the increased number
of company operated sites, as well as higher operating expenses to support the
increased level of non-fuel sales volume at continuing sites. On a same-site
basis, operating expenses as a percentage of non-fuel sales were 53.3% for the
first nine months of 2000 as compared to 54.3% for the same period in 1999.
Selling, general and administrative expenses decreased from $29.3 million for
the nine months ended September 30, 1999 to $28.9 million for the nine months
ended September 30, 2000, despite the net increase of 17 operating sites added
to the network during 1999 and 2000.
-more-
<PAGE> 6
Page 6
For the nine months ended September 30, 2000, income from operations
was $27.2 million, compared to $28.7 million for the same period in 1999. The
decrease of 5.2% for the nine-month period was primarily attributable to a $11.2
million increase in depreciation and amortization expense and a $0.4 million
decrease in gains from asset sales, partially offset by the $6.6 million
increase in EBITDA, a $2.1 million reduction in transition expenses and a $1.4
million reduction in stock compensation expense.
TravelCenters of America is the largest full-service travel center
network in the United States operating 159 locations serving long-haul trucking
fleets and their drivers, independent truck drivers and general motorists. TA
supplies diesel fuel to 49 of the 50 largest long-haul trucking fleets in the
nation. The company's facilities typically include diesel fuel and gasoline
operations, truck repair and maintenance services, full-service restaurants and
fast food courts, convenience stores and other driver amenities. TA is
headquartered in Westlake, Ohio, a suburb of Cleveland.
This press release contains statements that are forward-looking statements
within the meaning of applicable federal securities laws and are based upon the
Company's current expectations and assumptions which are subject to a number of
risks and uncertainties which could cause actual results to materially differ
from those anticipated.
<PAGE> 7
Page 7
TRAVELCENTERS OF AMERICA, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------------------------------------------
l 1999 2000 1999 2000
---------------------------------------------------------------
(IN THOUSANDS OF DOLLARS EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues:
Fuel.................................................. $ 280,139 $ 386,666 $ 660,841 $ 1,052,849
Non-fuel.............................................. 136,686 150,647 355,428 418,692
Rent and royalties.................................... 5,049 4,805 15,620 14,197
----------- ----------- ----------- -----------
Total revenues........................................ 421,874 542,118 1,031,889 1,485,738
Cost of revenues (excluding depreciation)................ 309,722 424,174 732,966 1,147,142
----------- ----------- ----------- -----------
Gross profit (excluding depreciation).................... 112,152 117,944 298,923 338,596
Operating expenses....................................... 75,062 81,175 198,814 232,301
Selling, general and administrative expenses............. 9,639 9,148 29,300 28,867
Transition expenses...................................... 1,379 605 3,025 972
Depreciation and amortization expense.................... 15,134 16,361 36,902 48,113
Gain on sales of property and equipment.................. (827) (279) (567) (194)
Stock compensation expense............................... 900 450 2,700 1,350
----------- ----------- ----------- -----------
Income from operations................................... 10,865 10,484 28,749 27,187
Interest (expense), net.................................. (9,901) (10,989) (27,404) (32,162)
----------- ----------- ----------- -----------
Income (loss) before income taxes........................ 964 (505) 1,345 (4,975)
Provision (benefit) for income taxes..................... 858 (171) 1,126 (1,728)
----------- ----------- ----------- -----------
Net income (loss)........................................ 106 (334) 219 (3,247)
Less: preferred dividends................................ (2,521) (2,873) (7,244) (8,255)
----------- ----------- ----------- -----------
Income (loss) available to common stockholders........... (2,415) (3,207) (7,025) (11,502)
Retained (deficit) - beginning of the period............. (19,708) (33,059) (15,098) (24,764)
----------- ----------- ----------- -----------
Retained (deficit) - end of the period................... $ (22,123) $ (36,266) $ (22,123) $ (36,266)
=========== =========== =========== ===========
Earnings per common share (basic and diluted)............ $ (2.75) $ (3.80) $ (10.01) $ (13.37)
========== ========== ========== ==========
</TABLE>
###
