TravelCenters of America Inc. (TA) announced financial results for the three months and year ended Dec. 31, 2020. Among the news, the company said it will sell its Quaker Steak & Lube (QSL) business, which includes 41 of its standalone restaurants, for approximately $5 million.
As of Dec. 31, 2020, TA classified the QSL business as held for sale, the company said, and as a result, recorded an impairment charge of $13.7 million in the 2020 fourth quarter. This sale is expected to close during the 2021 first quarter; however, it is subject to certain conditions. Accordingly, TA cannot be certain that it will complete this sale, that this sale will not be delayed or that the terms will not change.
“Total nonfuel revenues decreased 1.0% over the prior year period driven almost entirely by a decline in revenues at our full-service restaurants,” said TA CEO Jonathan Pertchik, “many of which remain closed due to governmental mandates and our own precautions taken in response to the COVID-19 pandemic.”
Excluding full service restaurants, he said, total nonfuel revenues improved 7.1% over the prior year due to solid improvements in-store and retail services and truck service departments, as well as a significant improvement in revenues from diesel exhaust fluid.
“Our sound discipline in managing expenses, resulted in decreases of 8.7% and 4.5% in site level operating expense and selling, general and administrative expense, respectively, were primary factors in delivering improved quarter over quarter results,” said Pertchik.
Overall in 2020, TA saw total revenues drop $1.27 billion to $4.85 billion. Fuel sales for the year declined about $1.2 billion to $3.08 billion, and nonfuel sales were down about $109 million to $1.75 billion.
Moving forward, the company is optimistic about 2021 and points to plans for alternative energy.
“Looking ahead, while fuel gross margin headwinds may persist, we are extremely excited about our 2021 capital expenditures plans that focus on both remediation and growth on top of the operational improvements we have implemented,” said Pertchi. “We expect to target a 15% to 20% cash on cash return for those capital expenditures related to growth initiatives. Equally as exciting are our burgeoning plans in the area of alternative energy, where we are moving toward onboarding dedicated leadership and finalizing a clear strategy going forward that we expect may include meaningful collaborations and ventures. This is a challenging, yet exciting and opportune time at TA.”
TA’s nationwide business includes travel centers located in 44 U.S. states and in Canada, standalone truck service facilities located in three states and standalone restaurants located in 12 states. TA’s travel centers operate under the “TravelCenters of America,” “TA,” “TA Express,” “Petro Stopping Centers” and “Petro” brand names and offer diesel fuel and gasoline, restaurants, truck repair services, travel/convenience stores and other services designed to provide attractive and efficient travel experiences to professional drivers and other motorists. TA’s standalone truck service facilities operate under the “TA Truck Service” brand name. TA’s standalone restaurants operate principally under the “Quaker Steak & Lube,” or QSL, brand name.
