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Edited Transcript of TA.OQ earnings conference call or presentation 5-Nov-19 3:00pm GMT

Q3 2019 Travelcenters of America Inc Earnings Call

Nov 11, 2019 (Thomson StreetEvents) -- Edited Transcript of Travelcenters of America Inc earnings conference call or presentation Tuesday, November 5, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew J. Rebholz

TravelCenters of America Inc. - CEO, MD & Director

* Barry A. Richards

TravelCenters of America Inc. - President & COO

* Kristin Brown

TravelCenters of America Inc. - Director of IR

* William E. Myers

TravelCenters of America Inc. - Executive VP, CFO & Treasurer

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Conference Call Participants

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* Bryan Anthony Maher

B. Riley FBR, Inc., Research Division - Analyst

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Presentation

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Operator [1]

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Hello, and welcome to the TravelCenters of America Third Quarter 2019 Financial Results Conference Call. (Operator Instructions) Please note that today's event is being recorded. At this time, I would like to turn the conference over to Kristin Brown, Director of Investor Relations. Please proceed.

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Kristin Brown, TravelCenters of America Inc. - Director of IR [2]

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Thank you, good morning, everyone. We will begin today's call with remarks from TA's Chief Executive Officer Andy Rebholz; followed by Chief Operating Officer, Barry Richards; and Chief Financial Officer, Bill Myers. We'll also have time for questions from analysts. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws. These forward-looking statements are based on TA's present beliefs and expectations as of today, November 5, 2019. Forward-looking statements and their implications are not guaranteed to occur and they may not occur. TA undertakes no obligation to revise or publicly release any revision to the forward-looking statements made today other than as required by law. Actual results may differ materially from those implied or included in these forward-looking statements. Additional information concerning factors that could cause our forward-looking statements not to occur is contained in our filings with the Securities and Exchange Commission that are available free of charge at the SEC's website or by referring to the Investor Relations section of TA's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. During this call, we will be discussing non-GAAP financial measures including adjusted EBITDA. The reconciliations of non-GAAP measures to the most comparable GAAP amounts are available on our press release that can be found on our website. The financial and operating measures implied and/or stated on today's call as well as any qualitative comments regarding performance should be assumed to be in regard to the third quarter of 2019 as compared to the third quarter of 2018, unless otherwise noted. Finally, I'd like to remind you that the recording and transmission of today's conference call is prohibited without the written consent of TA. And with that, Andy, I'll turn the call over to you.

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [3]

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Thanks, Kristin. Good morning, everyone. And thank you for joining us and for your interest in TA. Our operating results showed positive momentum in the 2019 third quarter, showing improvements in virtually every important metric, despite certain headwinds from the overall freight market. We had net income of $1.9 million compared to a net loss of $70.5 million last year. Our income from continuing operations this year increased 17.8% from last year. The third quarter's adjusted EBITDA of $31.9 million improved by $0.5 million over the 2018 third quarter. Fuel sales volume increased by 4.3% in total and by 3.9% on a same-site basis. This is the third consecutive quarter of healthy same-site growth in fuel sales volume that I believe reflects the success of our business initiatives. Dating back to the second quarter of last year, we've had a steady improvement in same-site fuel sales volume. Nonfuel revenues improved by 2% in total and by 1.8% on a same-site basis. Truck service revenues increased by 2% versus the decline of 1.5% last quarter, as we rebounded from a rough second quarter that we believed was something of an anomaly.

Store and retail services revenue grew 2.9%, led by growing demand for Diesel Exhaust Fluid and truck parking as well as growth in other categories that we believe is linked to the increase in fuel sales volume and our improved customer loyalty program implemented earlier this year. Restaurant revenues grew 38 basis points, driven by solid demand for our quick service options, offset by some reduced revenues, associated with certain full-service restaurant rebrandings and hours of operation reductions that took place. Fuel gross margin was $0.155 per gallon, which was down slightly compared to last year. As a result of the 4.3% increase in fuel sales volume, fuel gross margin increased by $2.6 million or 3.4%.

It's one of our most frequently asked question these days, so I'd like first to address the status of the biodiesel blenders' tax credit. The U.S. Congress, to date, has not enacted legislation to extend the credit for 2018 or 2019. If this tax credit is retroactively reinstated for 2018, TA will recognize a $35 million benefit to fuel cost of goods sold. The amount of benefit we might recognize, should this tax credit be enacted for 2019, was $28.9 million for the first 9 months of the year. Any cost of sales reductions we might recognize as a result of the retroactive reinstatement of this tax credit would be recognized in the quarter the tax credit is enacted by the federal government. Based on reports from our industry trade association, it

seems to me that there's about 50% chance the credit will be reinstated for 2018 and 2019 before the end of this year, but that probability is likely trending downward in the current environment in Washington and as time passes.

Now on to some TA highlights. Our site expansion program is progressing, and we continue to attract new franchisees and potential franchisees. We have opened 3 franchised TA Express travel centers so far this year and expect an additional 4 to open by year end. And although, we expect to achieve our site expansion goals primarily through franchising, we also currently have contracts in place to buy an existing travel center as well as a parcel of land on which we plan to develop a TA Express travel center. These transactions are expected to close late this year or early next year, and Barry will talk more about our site expansion in a moment. Another aspect of our growth plan is to earn as much as possible from each of our existing sites. To that end, on October 28, we entered in agreement with IHOP to convert up to 94 of our full-service restaurants at our travel centers to IHOPs. Over the next 5 years, we are obligated to complete 20 conversions and the rest will be at our discussion. Note the TA will continue to operate these restaurants with our employees and will pay franchise fees to IHOP. Currently, there are 4 IHOP restaurants in our travel center network, including one that opened October 28 in Jackson, Georgia, the first at a company-operated location.

Based on the results our franchisees have achieved after their conversions to an IHOP restaurant, we estimate that our return on investment from this initiative will be about 20%. The average investment per site is expected to be about $1.1 million. We plan to open an additional 15 IHOP restaurants at our travel centers in 2020. The site survey phase of the project is underway, and we expect that we will begin opening new IHOPs starting in August next year. We remain focused on costs and spending. We kept our site level operating expenses for same sites in line with our nonfuel revenue increases, experiencing a 60 basis point increase in the ratio of those expenses in nonfuel revenues that is due in part this quarter to increases in certain nonlabor expenses, including maintenance. During the third quarter, we continue to be somewhat constrained by diesel technician supply and productivity, but have made gains in those areas as compared to the first and second quarters of this year.

We also continue to keep a tight rein on capital spending, without allowing our sites to fall into disrepair. The increase in maintenance expense is at least partially due to forgoing certain capital expenditures in an effort to contain total cash spending this year. Spending control and reductions remain a top priority.

To conclude, we continue to believe in the business plans that we have established for this company, including our growth initiatives and cost control programs. We believe they will increase the profitability of the company over time and present an opportunity for investors who share those beliefs.

With that, I'll turn the call over to Barry for his comments.

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Barry A. Richards, TravelCenters of America Inc. - President & COO [4]

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Thanks, Andy, and good morning to everyone. We saw some good momentum from our travel center operations in the third quarter, with nonfuel revenues trending positively despite continuing softness in overall freight trends. Higher unit sales increased versus the same year quarter -- versus the same quarter last year. Growth in our remote service programs was strong with certain large customers looking to add services in new locations, which has led to our higher inactivity ahead of the sales growth.

Although, we saw revenue improvement in the nonfuel areas of our business, expansion of our call center staff and our continuing effort to recruit and train technicians to both generate and support increased sales as was well increases in maintenance, insurance and property tax expenses , [headway] on gross margin and excess of operating expenses this quarter. Overall fuel sales volume increased by 21.2 million gallons or 4.3%, primarily due to a same-site fuel volume increase of 18.7 million gallons or 3.9%. We believe these increases are driven in part by our UltraONE customer loyalty program, which was introduced in January and continues to be embraced by professional drivers. Total loyalty member gallons and average sale increased 4.2% and 6.9% over the prior year, respectively. Our goals with the program are reward loyalty and grow membership in customer count, and our results this quarter continue to demonstrate solid progress.

Within truck service, tire unit sales were up 3.1% versus the same quarter last year, despite the U.S. tire manufacturers association reporting an 18.1% decrease in tire unit sales for September and a 12.8% decline year-to-date. Retreads and imported tires have become a larger share of our tire sales mix. RoadSquad scales increased by 10% versus same quarter last year, and our mobile maintenance service continued to show strong growth, producing a 78% increase in sales. Our store division revenue increase was driven in large part by increased Diesel Exhaust Fluid demand, or DEF, and grocery sales. We expect the demand for DEF to continue growing as more pre-2011 model year trucks are retired each year. Our restaurant business remains healthy, showing total revenue increases 38 basis points and $400,000 , despite having a handful of full-serve restaurants closed for rebranding during the quarter as well as business hour adjustments for 36 locations that had previously been operated over the night. We believe rebranding a number of these restaurants to stronger, nationally recognized concepts and rationalizing hours of operation will ultimately boost restaurant margins over time. We're looking forward to the opportunity that our recent agreement with IHOP brings in this regard. Looking ahead, we continue to see growth potential and opportunities for our truck service programs, especially the mobile maintenance program that we have branded as TechOn-SITE. We have earned the confidence of a number of large customers who enjoy the improved reliability and uptime from their equipment being properly maintained. This increased confidence has led to the additional services. Our national call center, which supports a fleet of RoadSquad emergency repair vehicles, continues to attract fleet customers that retain us to handle their breakdown calls and allows them to focus on deliveries. The third quarter saw us add agreements with 4 new dedicated call center customers, bringing our total to 102 fleets for which we handle their calls either for nights, weekends, in the most cases 24/7.

Another initiative we've undertaken that we believe will have a meaningful effect on our operating results was a realignment of our operations management structure that was implemented on October 1. Persaunt to this restructuring, we have a single site general manager responsible for all activities at each site and reduced the number of district managers we employed.

We believe this new management structure will facilitate higher nonfuel sales growth rates, improved employee recruiting and retention efforts and keep a better focus on site level operating expenses. While we expect increased profitability over time as these expectations come to fruition, we estimate an immediate cost savings from the restructuring of approximately $2 million on an annualized basis. There will be a reduction of SG&A expense related to the smaller number of district managers and an increase in site level operating expense related to the new site general managers that we expect will result in the net expense reduction. Finally, in terms of our network expansion, we're pleased to announce the openings of 2 new TA Express locations in Hot Springs, South Dakota; and Baytown, Texas, the second and third franchises under this newly launched brand. We have signed 3 new franchise agreements in the third quarter, bringing the total to-date this year to 10. We expect 4 of these sites, not yet operating as part of our network, will be added by the end of 2019 will remain (inaudible) to be added in 2020. In addition, we are currently -- currently are negotiating franchise agreements for an additional 7 travel centers and are engaged in later stages of discussion and negotiation with operators of another 8 sites.

There are approximately 130 other sites in various phases of the application and diligence process. And as Andy mentioned, we also currently have contracts in place to buy an existing travel center that is expected to close in January 2020 as well as a parcel of land that is expected to close in December 2019. And on which we plan to develop a TA Express travel center that we anticipate will open in the second half of 2020. We continue to be excited about our progress to date in these areas and even more excited about the potential they hold. And with that, I will hand the call over to Bill.

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William E. Myers, TravelCenters of America Inc. - Executive VP, CFO & Treasurer [5]

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Thank you, Barry, and good morning, everyone. For the third quarter of 2019, we reported net income of $1.9 million or $0.23 per share compared to net loss of $70.5 million or $8.87 per share in the third quarter of 2018. The net loss last year was largely due to a $72.1 million loss from discontinued operations, net of taxes. For the third quarter of 2019, we reported adjusted EBITDA of $31.9 million, an increase of approximately $500,000. The improvement in adjusted EBITDA was primarily due to a decline in real estate rent expense as well as the increases in fuel and nonfuel gross margin Barry just discussed. Fuel gross margin increased by $2.6 million or 3.4%. Diesel fuel gross margin declined slightly due to an almost 1% drop in margin per gallon that was largely offset by the 4.3% increase in diesel gallon sold.

Gasoline margin increased as we managed sales pricing to balance sales volume and profitability. On a same-site basis, fuel gross margin increased by $2.5 million or 3.3%. The decline in diesel fuel gross margin per gallon primarily was due to the higher cost associated with increased rewards under our new loyalty program to incentivize drivers to purchase higher fuel volumes and from a reduced benefit realized from biodiesel blending. Nonfuel revenues increased by $9.5 million or 2%, primarily as a result of an $8.8 million increase on a same-site basis in sales at new sites. The increase on a same-site basis was primarily due to an increase in DEF revenue as a result of a higher number of trucks on the road compared to the prior year as well as the positive impact of our pricing and marketing initiatives. Nonfuel gross margin increased by $4.4 million or 1.5% due to the $9.5 million increase in nonfuel revenues, partially offset by a 30 basis point decline in nonfuel gross margin percentage to 59.8%. The nonfuel gross margin percentage experienced a decline due to the change in mix of products and services sold. Site level operating expense, as percentage of nonfuel revenues on a same-site basis, was 48.8% as compared to 48.2% for the 2018 third quarter. In total, site level operating expense increased by $8.4 million or 3.6%, of which $1.3 million was due to new sites. The balance of this increase on a same-site basis was primarily due to increased labor costs to support our growth in nonfuel revenues as well as higher maintenance, insurance and property tax expense.

As a result of our operations management restructuring, implemented on October 1, that Barry discussed earlier, we estimate that site level operating expense will increase by approximately $5 million on an annual basis and that site level operating expense, as a percentage of nonfuel revenues, will increase proportionately. However, we believe this new structure, in addition to an immediate SG&A savings, will over time boost our overall profitability. SG&A expense for the 2019 third quarter was $40.2 million, an increase of $4.7 million or 13.2%.

The increase in SG&A cost was due to $2.6 million from increased legal costs and $1.7 million from increased compensation expense as a result of annual salary increases and increased headcount to support the growth in our business. SG&A was roughly in line with our expectations. We estimate that the operations management restructuring, I just mentioned, will reduce SG&A expense by approximately $7 million on an annual basis, although in the fourth quarter we will incur approximately $500,000 of onetime expenses to implement the restructuring, such as for severance and relocation costs.

With those factors taken into account, we believe that SG&A expense should be approximately $38 million in the fourth quarter of 2019, absent any unusual legal expenses or currently unforeseen items.

Real estate rent expense decreased by $7.2 million or 10.1% in the 2019 third quarter, primarily due to purchasing 20 travel centers from Service Properties Trust in January 2019. As previously discussed, this reduced the annual minimum rent we pay to SVC by $43.1 million. Given our current leasing arrangements, we continue to expect our real estate rent expense to run at a quarterly rate of approximately $64 million. Depreciation and amortization expense increased by $3.7 million or 18.3%, primarily due to the purchase of 20 travel centers in January from SVC. Turning to our liquidity and investment matters, at September 30, our cash balance was $32.5 million, and we had $114 million of availability on our credit facility.

As we highlighted in last quarter's call, we amended our unsecured revolving credit facility in July, reducing the premiums charged for each of the 3 pricing tiers by 25 basis points and extending the maturity from December of 2019 to July of 2024.

As of September 30, we own 51 travel centers, 6 stand-alone restaurants and a stand-alone truck service facility that are unencumbered by debt. As part of our agreements with IHOP, discussed earlier, we may borrow from IHOP up to $10 million in connection with the cost to convert our restaurants to IHOPs. During the quarter, we invested $26 million in capital expenditures and thus far for the year have not sold any improvements to SVC. Lastly, we expect our 2019 capital investment plan, which we previously reported to you would be approximately $100 million, to be approximately $85 million, excluding any acquisitions. That concludes our prepared remarks. Operator, we are now ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Today's first question comes from Bryan Maher of B. Riley FBR.

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Bryan Anthony Maher, B. Riley FBR, Inc., Research Division - Analyst [2]

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On the IHOP conversions, which -- yes, we applaud, we think that is going to get some more demand into the property. Can you talk a little bit about the analysis though between that and the status quo relative to spending over $100 million over the next few years to convert those properties? Also what is the annual franchise fee per unit if you could share? And who approached who on that deal?

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [3]

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Starting at the end, I guess, as we've talked about on few calls now we -- we've hit upon the idea or the strategy or an initiative to change the branding of some of our sitdown restaurants in order to increase the appeal of our facilities to more than just the truckers. Iron Skillet and Country Pride are well-known and respected brands amongst truck drivers, but not something that sort of local residents and others -- motorists driving on the highway, not something that they necessarily know about or care about. And we've started down that path of rebranding restaurants. And we had gotten in touch with IHOP to do this site in Georgia that coincidently opened as an IHOP the day that we signed the IHOP agreement, but that's a process that had been underway for a number of months now. And I think that given those conversations, the success that IHOP had seen at the -- well when we first started talking to them 2 of the 3 franchise sites, where they've had a similar conversion, honestly, they were the ones that came to us with, hey, let's do a much bigger deal and that led to a lot of conversations.

On the franchise agreement, pretty sure -- I'm looking at Bill to correct me, that's 4.5% -- is the -- what the -- of the sales is the franchise fee. But as far as why do this as opposed to not doing this with the restaurants, I mean, as I started out, we think that with the changes happening maybe and just the logistics system generally, the average length of hauls for truckers are declining each of the past few years, and that's likely to continue. And I think that it's important for us if we're going to maximize the amount of earnings that we generate at each one of the properties to appeal as best we can to customer segments other than just the truck drivers.

And I think to do that one of the things we've done for years and years is, say, the branded gasoline to draw in those motorists. So the branded fast food restaurants or quick service restaurants as we call them. And this is, I think, just another step in that continuum. And I think it's something we need to continue to watch and continue to some extent experiment with. We have always operated essentially all of the restaurants we have at our site, certainly all the sitdown restaurants, almost all of the QSRs. And we're looking at possibilities for instead of operating certain of those restaurants, leasing out that space to maybe a local, as an example and not necessarily one that we're talking to, but I don't know that detail. A local McDonald's franchisee or something like that. Right now, we're not allowed to operate McDonald's or Wendy's outlets because we have relationship with Burger King. So if we want to get one of those brands into a travel center, then may be we need to lease the space. And so we're looking at testing those kinds of things as well with the -- sort of just the restaurant part of our business. So another part of these projects that I talked about with the IHOPs will just also be some called general updating of the buildings. I mean we have some great locations out there that we're -- built on the interstate highways, on the interstate highways were being built, but some of them are old and tired looking. And I think there'll be some sprucing up as part of these projects. If all of that together, we think we can get a very good return on the investment. And as I said, increase our appeal to other customer segments.

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Bryan Anthony Maher, B. Riley FBR, Inc., Research Division - Analyst [4]

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And when we think about the relationship with IHOP and the $1.1 million per property, roughly I'm sure it's give or take. But repeating anything to this at all kind of in lodging is it like -- is there any key money? Are they giving you signage? What is their contribution of anything? And aside from the 4.4%, are there any upfront costs for the franchise relationship?

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [5]

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No. I -- they -- their contributions really come in the form of whatever reductions we were able to negotiate with them in the -- sort of the initial franchise fees and start up training costs, things like that. And this $10 million sort of financing facility that they've made available to us, but as far as straight investment contribution, really nothing towards the construction cost. And as far as the upfront fees, that $1.1 million number I gave kind of included -- includes all the -- like the initial franchise fee per restaurant. That may even have some of our initial startup expenses and it -- like the training and things like that so.

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Bryan Anthony Maher, B. Riley FBR, Inc., Research Division - Analyst [6]

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And then kind of moving on to the biodiesel fuel credit. Who is the main driver? Like the key guy in Congress pushing this forward? And is there a chance that we get to the end of the year and they say, okay, look, this is water down the river, we're not going to do '18, we're just going to do '19?

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [7]

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I think that the -- Senator Grassley is I think probably the primary proponent of at least this particular one of the tax extenders. There are a number of them out there, and there are some that -- leading Democrats support and other ones that on both sides of the aisle that have their fans. Senator Grassley happens to be from Iowa and the biodiesel is an important one to his constituent, and he has supported that particular one of the extenders. But I think the extenders kind of end up getting negotiated as a package. And as I understand and as I've been told, there has been good discussion going on between maybe sort of Senator Grassley's camp and then Representative Neal in the House. I think they are the 2 who sort of -- negotiating a lot of this package of the tax extenders that would hopefully become part of an overall tax provision. And I think you need to get the agreement on what are the tax provisions. And then the second important step is there need to be some other legislative vehicle to which the tax provisions can be attached. And it looks like right now -- I mean the current -- the continuing resolution that right now is funding the government expires on November 21. And so that's really the next opportunity where Congress is going to have to do something, pass a short term, another CR short term to kick the can down the path a little bit to December. And maybe give themselves another month to deal with something and come up with something longer term or maybe they strike a longer-term deal then or maybe they shut down the government again. I mean who knows what could happen. And -- but that -- so there's a potential bite at the apple there late November. If that -- if it doesn't happen then, there's probably another chance in December. If it doesn't happen then, then we're in the next year. And I believe that our -- the likelihood of 2018 being -- having retroactively reinstated for '18 I think does go down quite a bit. I mean who knows what will happen, but I mean there a lot of businesses out there, biodiesel industry-related businesses that laying off employees and shutting down and things like that, and that's never a good thing in your district. So we'll see how all that plays out in Congress. But the other big wildcard here is the whole impeachment process. How long that takes and maybe how ugly that gets, but if the House very quickly votes to impeach (inaudible) then the Senate kind of is required to take that up. And that could just -- that could push the whole tax provisions, including the extenders, which includes hopefully our particular credit here to a back burner. And the longer it would sit on a back burner, as I said, I think that's not good for us. So certainly a less probable situation than last quarter or the quarter before that, but from everything that we're hearing, it's still alive and there is still a chance.

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Bryan Anthony Maher, B. Riley FBR, Inc., Research Division - Analyst [8]

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Okay. And then lastly for me and maybe this is more of a comment than a question. But look, the stock's down 50% or so year-to-date. And as I'm sure you saw in our note this morning, I mean cost continued to be an issue. And I do know that you guys are making efforts to control cost, but the bottom line is, is you're down below $100 million market cap in the company valuation. I'm the last covering analyst, I think, 2 drops since the last call or so. What can be done here from an extreme effort standpoint to keep cost down? I mean you guys do $6 billion a year in revenue. If you could just generate $8 million to $16 million in profit -- net profit on $6 billion at the $1 or $2 per share per earnings, I don't think that, that's a stretch. And I get a zillion phone calls and emails from the buy side, who are involved in the name constantly driving about cost. What more besides what you announced today can still be done?

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [9]

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I think there are lots of things that can be done. I don't think that there are lots of things that can be done necessarily tomorrow, but I think that this management change that we just instituted is going to allow us to bring much more day-to-day everyday focus at the site level, which for whatever initiatives we then pursue from a revenue enhancing and/or cost reducing perspective to improve the results of those initiatives. I think we have opportunities to do more things with how we merchandise in market and price products in the various parts of our business, different things like that, but when I look at the numbers here for the third quarter, I think our issue this quarter really wasn't with the labor. I mean the labor as a percentage of the nonfuel sales for -- on a same-site basis was exactly the same as last year. Really, all of this 60 basis point increase in that ratio this quarter versus last year's third quarter is related to maintenance expense, insurance and property taxes. And yes, the property taxes are up roughly $2 million a year, almost entirely because of the sites that we acquired. So saving $43 million in rent, but it's costing us $2 million in operating expenses. So we're still coming out ahead there, but it's just one of those things we didn't necessarily foresee such a large increase occurring in property taxes as an example. So some of it is getting things like that just sort of baked into our expectations. And I do think that we have a lot of opportunity to, I'll say, rightsize our ratios. But quite honestly, I see it as, I don't know if I'll say more an issue, but it's at least as much an issue of increasing revenue as it is in cutting costs, particularly in the truck service area. We've talked the last few quarters about what's been going on there. And we have been making those investments in the people. And we saw in this third quarter the beginnings of that -- I want to use the word turnaround, so I don't mean it that way. That has some connotations, but the beginning of that rebound or the payoff, if you will, on those investments in those people. And we need to keep that going. And we need to improve our retention of particularly those employees, but really -- all of our site employees, turnover's always a costly thing. And over the past few months, indications are we're moving in the right direction, but it may take more than the quarter we've had rebounding so far.

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Operator [10]

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This concludes our question-and-answer session. At this time, I would like to turn the conference back over to Andy Rebholz for any closing remarks.

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Andrew J. Rebholz, TravelCenters of America Inc. - CEO, MD & Director [11]

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Thanks, Chris. Again, everybody, thank you for your attention this morning, your interest in TA. Have a great day. And we'll talk to you after the fourth quarter.

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Operator [12]

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The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.