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TravelCenters of America LLC Message Board

  • granicus007 granicus007 Oct 21, 2012 9:02 AM Flag

    recently acquired travel centers

    within the last several quarters TA has acquired a number of travel centers. Now that the upfitting/remodeling has been completed and the revenue/earnings start rolling on a normalized basis, it should be interesting as to how this impacts TA's bottom line. I would think from a corporate level, none of these additions require more back-office support so the corp. costs is now spread wider and costs go down on a per unit basis. And the income generated should by now be accretive to current earnings.
    ps food for thought - TA had purchased the newly acquired sites at what TA mgt considered very attractive prices (about 4x ebit). TA itself is trading for a similar amount now...

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    • TA needs to buy more Travel Centers. I don't think they make much if any profit from the Travel Centers they lease from HPT. TA growth will come from Travel Centers they own. They have the cash they just need to find more Travel centers to buy and a good price.
      Lower fuel prices should boost TA profits in the fourth qtr. Maybe they break even or just a small loss. If they keep earning 1$ plus per year eventually the stock price will rise, especially if they invest the profits in more travel centers.

    • Well, the question is whether it is "accretive" enough to justify going from 17 million shares outstanding, to 27 million shares outstanding, a 1 1/2 years ago. Or if that share deal was done as a corrupt "sop" to HPT, in exchange for the rent reductions.

      I'm sorry, but I think I know the answer. And I'll be the first to eat crow, publicly here, if I am proven wrong.

      • 1 Reply to longtimefollower
      • LTF, you may be right. But TA's management is sitting on millions of $ in unexercised options. I would think they would want at some point to collect those millions? Also, the proceeds from the secondary offering were used to purchase, free and clear of liens, properties that are wholly owned by TA. I'm not sure I follow your reasoning since TA bought all those sites for themselves. And HPT being the largest shareholder to my knowledge had their shareholders diluted along with the rest of us.

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