TravelCenters of America LLC Announces Third Quarter 2009 Results

• Press Release
• Source: TravelCenters of America LLC
• On 7:30 am EST, Monday November 9, 2009

WESTLAKE, Ohio--(BUSINESS WIRE)--TravelCenters of America LLC (NYSE Amex: TA), or TA, today announced financial results for the three and nine months ended September 30, 2009.

Related Quotes

Symbol	Price	Change
TA	4.05	-0.04

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In addition to the historical financial results prepared in accordance with generally accepted accounting principles and presented in this press release, TA is furnishing supplemental data that it believes may help investors better understand TA’s business. Included in this supplemental data is same site operating data that includes operating data for all of the travel centers in operation on September 30, 2009, that were operated by TA continuously during the comparative periods presented. Also included is a presentation of earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, along with EBITDAR excluding the impact of certain noncash items and certain items that TA considers to be nonrecurring and other items described, or Adjusted EBITDAR.

At September 30, 2009, TA’s business included 233 sites, 166 of which were operated under the “TravelCenters of America” or “TA” brand names and 67 that were operated under the “Petro” brand name.

⁽¹⁾ Basic and diluted losses per share for the three and nine months ended September 30, 2008, have been adjusted to reflect the requirements of a new accounting pronouncement effective for TA beginning January 1, 2009.

Quarterly Business Commentary

During the three months and nine months ended September 30, 2009, the continued difficult economic conditions in the U.S. presented TA with significant operating challenges. TA experienced, on a same site basis, moderating declines in fuel sales volumes during the nine months ended September 30, 2009 as compared to the same period in 2008:

Capital Expenditures and Liquidity

During the nine months ended September 30, 2009, TA invested $23.3 million in capital projects and received $5.7 million of cash from its principal landlord, Hospitality Properties Trust, or Hospitality Trust, from the sale of qualifying leasehold improvements with no corresponding increase in rent. TA’s previously announced capital plan for 2009 anticipated expenditures of approximately $60 million. Based in part on rescheduling of certain projects and in part upon aggressive value engineering, TA’s current capital plan for 2009 anticipates expenditures of approximately $35 million to $40 million, some of which may be sold to Hospitality Trust under the lease agreements TA has entered with Hospitality Trust.

Pursuant to an arrangement with Hospitality Trust, TA has the option to defer up to $5 million of rent for each month during 2009 and 2010. Amounts deferred and unpaid interest thereon are due no later than July 1, 2011. TA has taken all deferrals available to date, including $45 million during the nine months ended September 30, 2009 and $30 million during 2008.

At September 30, 2009, TA had approximately $185.3 million in cash and cash equivalents. TA also maintains a $100 million revolving secured bank credit facility. At September 30, 2009, no amounts were outstanding under this facility, but a portion of the facility was utilized to support letters of credit required by TA in the ordinary course of its business. TA also owns various unencumbered real estate and other assets that may be additional sources of liquidity over time, to the extent they can be financed or sold.

Conference Call:

On Monday, November 9, 2009, at 10:00 a.m. Eastern Time, TA will host a conference call to discuss its financial results for the three and nine months ended September 30, 2009. Following management’s remarks, there will be a question and answer period.

The conference call telephone number is 800-306-6784. Participants calling from outside the United States and Canada should dial 913-312-0840. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available for about a week after the call. To hear the replay, dial 719-457-0820. The replay pass code is 1818423.

A live audio webcast of the conference call will also be available in a listen only mode on our web site at www.tatravelcenters.com. To access the webcast, participants should visit our web site about five minutes before the call. The archived webcast will be available for replay on our web site for about one week after the call.

About TravelCenters of America LLC:

TA’s travel centers operate under the “TravelCenters of America”, “TA” and “Petro” brand names and offer diesel and gasoline fueling services, restaurants, truck repair facilities, stores and other services. TA’s nationwide business includes travel centers located in 41 U.S. states and in Canada.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. ALSO, WHENEVER TA USES WORDS SUCH AS ‘‘BELIEVE’’, ‘‘EXPECT’’, ‘‘ANTICIPATE’’, ‘‘INTEND’’, ‘‘PLAN’’, ‘‘ESTIMATE’’ OR SIMILAR EXPRESSIONS, TA IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON TA’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. AMONG OTHERS, THE FORWARD LOOKING STATEMENTS WHICH APPEAR IN THIS PRESS RELEASE THAT MAY NOT OCCUR INCLUDE:

• TA’S DESCRIPTION OF THE RENT DEFERRAL AGREEMENT WITH HOSPITALITY TRUST MAY IMPLY THAT THE RENT DEFERRAL AMOUNTS TOGETHER WITH CASH ON HAND AND PROVIDED BY TA’S OPERATING ACTIVITIES WILL BE SUFFICIENT TO ALLOW TA TO GENERATE POSITIVE CASH FLOW FROM OPERATIONS AND TO MEET ITS OBLIGATIONS DURING THE RENT DEFERRAL PERIOD. IN FACT, TA MAY NOT BE ABLE TO GENERATE POSITIVE CASH FLOW FROM OPERATIONS OR MEET ITS OBLIGATIONS;
• THIS PRESS RELEASE STATES THAT TA’S PLANNED CAPITAL PROJECTS FOR 2009 MAY COST APPROXIMATELY $35 MILLION TO $40 MILLION TO COMPLETE. HOWEVER, THE AMOUNT AND TIMING OF CAPITAL EXPENDITURES ARE OFTEN DIFFICULT TO PROJECT. SOME CAPITAL PROJECTS COST MORE THAN ANTICIPATED AND TA MAY SPEND MORE THAN $40 MILLION TO COMPLETE ITS CAPITAL PROJECTS. CURRENTLY UNANTICIPATED PROJECTS THAT ARE REQUIRED TO BE COMPLETED MAY ARISE AND CAUSE TA TO SPEND MORE THAN CURRENTLY ANTICIPATED. SOME CAPITAL PROJECTS TAKE MORE TIME THAN ANTICIPATED AND TA MAY NOT COMPLETE THESE CAPITAL PROJECTS IN 2009. AS A RESULT OF MARKET CONDITIONS, TA MAY DEFER CERTAIN CAPITAL PROJECTS AND SUCH DEFERRAL MAY HARM TA’S BUSINESS OR REQUIRE IT TO MAKE LARGER AMOUNTS OF CAPITAL EXPENDITURES IN THE FUTURE. THE CAPITAL PROJECTS COMPLETED MAY NOT INCREASE TA’S SALES OR MARGINS; AND
• THE STATEMENT IN THIS PRESS RELEASE THAT TA HAD $185.3 MILLION OF CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 2009 AND THAT A PORTION OF TA’S BANK CREDIT FACILITY IS UNUSED MAY IMPLY THAT TA HAS ABUNDANT WORKING CAPITAL AND CASH LIQUIDITY. IN FACT, TA’S REGULAR OPERATIONS REQUIRE LARGE AMOUNTS OF WORKING CASH AND TA’S BANK CREDIT FACILITY IS SUBSTANTIALLY USED TO SECURE LETTERS OF CREDIT. TA RELIES ON SOME OF ITS CASH ACCOUNTS TO SERVE AS COLLATERAL UNDER ITS CREDIT FACILITY AND TA HAS DEFERRED, AS OF SEPTEMBER 30, 2009, PAYMENT OF $75 MILLION OF RENT PAYABLE TO HOSPITALITY TRUST, WHICH TOGETHER WITH ANY UNPAID INTEREST THEREON, TA MUST REPAY BY JULY 1, 2011. ACCORDINGLY, TA MAY NOT HAVE SUFFICIENT WORKING CAPITAL OR CASH LIQUIDITY.

THESE UNEXPECTED RESULTS OF TA’S FORWARD LOOKING STATEMENTS MAY BE CAUSED BY VARIOUS FACTORS, SOME OF WHICH ARE BEYOND TA’S CONTROL, INCLUDING:

• FUTURE FUEL PRICE INCREASES, FUEL PRICE VOLATILITY OR OTHER FACTORS MAY CAUSE TA TO NEED MORE WORKING CAPITAL TO MAINTAIN ITS INVENTORIES AND CARRY ITS ACCOUNTS RECEIVABLE THAN TA NOW EXPECTS;
• IN THE PAST, INCREASES IN DIESEL PRICES HAVE REDUCED THE DEMAND FOR THE PRODUCTS AND SERVICES THAT TA SELLS BECAUSE SUCH FUEL PRICES ENCOURAGED FUEL CONSERVATION, DIRECTED FREIGHT BUSINESS AWAY FROM TRUCKING OR OTHERWISE ADVERSELY AFFECTED THE BUSINESS OF TA’S CUSTOMERS. FUTURE INCREASES IN DIESEL PRICES MAY HAVE SIMILAR AND OTHER ADVERSE EFFECTS ON TA’S BUSINESS;
• TA’S SUPPLIERS MAY BE UNWILLING OR UNABLE TO MAINTAIN CURRENT TERMS FOR TA’S PURCHASES ON CREDIT. IF TA IS UNABLE TO PURCHASE GOODS ON REASONABLE CREDIT TERMS, TA’S REQUIRED WORKING CAPITAL MAY INCREASE AND TA MAY INCUR SUBSTANTIAL LOSSES. FURTHER, IN LIGHT OF THE CURRENT CONDITIONS IN THE GLOBAL CREDIT MARKETS, THE AVAILABILITY AND TERMS OF CREDIT ARE UNPREDICTABLE AND UNCERTAIN . FAILURE TO OBTAIN ANY NECESSARY FINANCING ON REASONABLE TERMS WOULD ADVERSELY AFFECT TA’S ABILITY TO FUND ITS BUSINESS AND OPERATIONS;
• IF THE DIFFICULT U.S. ECONOMIC AND TRUCKING INDUSTRY CONDITIONS CONTINUE, WORSEN OR LAST FOR AN EXTENDED PERIOD, TA’S CUSTOMERS MAY PURCHASE LESS OF TA’S GOODS AND SERVICES AND TA MAY SUFFER LOSSES; AND
• TA IS CURRENTLY INVOLVED IN SEVERAL LITIGATION MATTERS. DISCOVERY AND COURT DECISIONS DURING LITIGATION OFTEN RESULT IN UNANTICIPATED RESULTS. LITIGATION IS EXPENSIVE AND DISTRACTING TO MANAGEMENT. TA CAN PROVIDE NO ASSURANCE AS TO THE OUTCOME OF ANY OF THE LITIGATION MATTERS IN WHICH IT IS INVOLVED.

TA HAS PRODUCED PROFITABLE OPERATIONS IN ONLY TWO QUARTERLY REPORTING PERIODS SINCE IT BECAME A PUBLICLY OWNED COMPANY ON JANUARY 31, 2007. ALTHOUGH TA’S PLANS ARE INTENDED TO CREATE PROFITABLE OPERATIONS, THERE CAN BE NO ASSURANCE THAT THESE PLANS WILL SUCCEED.

OTHER RISKS MAY ADVERSELY IMPACT TA, INCLUDING THOSE DESCRIBED IN TA’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008, UNDER “WARNING CONCERNING FORWARD LOOKING STATEMENTS”, “ITEM 1A. RISK FACTORS” AND ELSEWHERE IN THAT REPORT AND UNDER “WARNING CONCERNING FORWARD LOOKING STATEMENTS” AND ELSEWHERE IN TA’S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2009.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY LAW, TA UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

⁽¹⁾ Basic and diluted income per share for the three months ended September 30, 2008, have been adjusted to reflect the requirements of a new accounting pronouncement effective for TA beginning January 1, 2009.

These financial statements should be read in conjunction with TA’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed with the Securities and Exchange Commission.

⁽¹⁾ Basic and diluted loss per share for the nine months ended September 30, 2008, have been adjusted to reflect the requirements of a new accounting pronouncement effective for TA beginning January 1, 2009.

These financial statements should be read in conjunction with TA’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed with the Securities and Exchange Commission.

⁽¹⁾ The leasehold improvement receivable amounts represent, as of the applicable dates, the then remaining, estimated discounted amounts of funds TA expected to receive, as of such dates, from Hospitality Trust in connection with TA’s sales of qualifying leasehold improvements to Hospitality Trust under the lease with Hospitality Trust for TA branded travel centers, which provided for up to $125,000 of such sales without an adjustment to the amount of rent payable under that lease. The total remaining undiscounted amount available at September 30, 2009, was $10,272.

These financial statements should be read in conjunction with TA’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed with the Securities and Exchange Commission.

SUPPLEMENTAL SAME SITE OPERATING DATA

The following table presents operating data for all of the travel centers in operation on September 30, 2009 that were continuously operated by TA since January 1, 2008. This data excludes revenues and expenses that were not generated by TA at sites it operates, such as sales made by TA’s franchisees, rents and royalties from franchises and corporate level selling, general and administrative expenses.

TravelCenters of America LLC
Timothy A. Bonang, 617-796-8251
Vice President, Investor Relations
or
Carlynn Finn, 617-796-8251
Manager, Investor Relations
www.tatravelcenters.com