TravelCenters of America LLC Announces Results For The Period Ended March 31, 2007.WESTLAKE, Ohio Westlake is a city in Cuyahoga County, Ohio, United States. The population was 31,719 at the 2000 census. Geography Westlake is located at (41.454439, -81.928657)GR1. -- TravelCenters of America TravelCenters of America (TA) is the largest truck stop chain[1] in the United States and Ontario, Canada. The majority of customers are RV's and professional truck drivers. The company's headquarter is located in Westlake, Ohio. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (AMEX AMEX See: American Stock Exchange : TA) today announced financial results for the period ended March 31, 2007. On January 31, 2007, Hospitality Properties Trust (NYSE NYSE See: New York Stock Exchange : HPT HPT Human Performance Technology HPT Hyperparathyroidism HPT Heartland Poker Tour HPT Home Pregnancy Test HPT High Pressure Turbine HPT Host Print Transform HPT High-Performance Team HPT high-payoff target (US DoD) ) completed its acquisition and restructuring of TravelCenters of America, Inc., our predecessor, and we were spun off from HPT. Also on that date, we entered into a long term lease agreement with HPT for 146 of the travel center sites in our network. Further details on these transactions can be found in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. Today, we are a separate public company traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . Because of the events of January 31, 2007, our predecessor's historical financial information may have limited relevance to investors. At March 31, 2007, our network consisted of 164 sites. In addition to the 146 sites we lease from HPT, 13 sites are owned by our franchisees, three are owned by third parties other than HPT and operated by us, and two are owned and operated by us. Principally because the capital structure we now employ as a public company is materially different than our predecessor's capital structure, the supplemental information which accompanies this release includes pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma financial data. We have also presented supplemental pro forma financial data, principally to display earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) , and to display adjusted EBITDAR, which is EBITDAR excluding the impact of certain non-cash items and certain items which we consider to be non-recurring. The adjustments applied to the historical data of our predecessor are described in the notes to the accompanying supplemental information. For the two month period from February 1, 2007 through March 31, 2007, we recognized total revenue of $736.7 million and our net loss was $11.0 million. Our pro forma net loss for the quarter ended March 31, 2007, was $54.6 million, compared to pro forma net loss of $14.4 million for the 2006 period. Our pro forma EBITDAR for the quarter ended March 31, 2007, was a loss of $35.3 million, compared to income of $31.2 million for the respective 2006 period. Our pro forma adjusted EBITDAR for the quarter ended March 31, 2007, was $32.0 million, compared to $31.2 million for the respective 2006 period. Recent network changes: * During the quarter ended March 31, 2007, we completed the construction of a new travel center in Livingston, California Livingston is a city in Merced County, California. According to the 2000 census, the city population was 10,473. The city is the home of Foster Farms (poultry company) which promoted the city in its early ad campaign. at a total cost of $14 million. This travel center opened in March and includes 10.5 acres of land, 105 truck parking spaces, 128 automobile parking spaces, and offers six diesel fuel lanes and six gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by dispensers, a travel store, a 5-bay truck repair facility and three quick service restaurants, or QSRs. * During the quarter ended March 31, 2007, we and our predecessor completed the construction of 17 truck repair shop bays at five of our travel centers at a total cost of $3.9 million. Since March 31, 2007, through May 11, 2007, we completed the construction of three truck repair shop bays at one of our travel centers. As of May 11, 2007, our network included 650 truck repair bays, including 574 which we operate and 76 which our franchisees operate. * During the quarter ended March 31, 2007, we added one QSR QSR Quick Service Restaurant QSR QoS (Quality of Service) Satisfaction Rate QSR Quality System Regulations QSR Quality Status Report QSR Quality System Review QSR Quarterly Status Report QSR Quality System Requirement at one of our travel centers. As of May 11, 2007, our network included 218 QSRs, including 181 which we operate, branded under 26 different QSR concepts. * During the quarter ended March 31, 2007 and through May 11, 2007, we agreed to purchase a travel center located in Edinburg, Texas
Edinburg is a city in Hidalgo County, Texas, United States. , for $3 million. Although this acquisition is subject to customary closing conditions, we expect to close this transaction during the second or third quarter of 2007. The Edinburg, Texas, travel center currently is a franchisee owned and operated site in our network. * During the quarter ended March 31, 2007, we and our predecessor invested $21.4 million in capital projects, including $5.8 million which we consider to be sustaining capital expenditures and $15.6 million which we consider to be revenue enhancing capital expenditures. [TABLE OMITTED] In connection with our spin off, HPT committed to fund $125 million of capital expenditures at the travel centers we lease from HPT over the next approximately five years without adjustment to our rent. We expect a portion of our capital expenditures for the two months ended March 31, 2007, to be reimbursed by HPT under this commitment. We may also accept funding of additional capital expenditures at these travel centers from HPT in exchange for increased rent. Conference Call: On Tuesday, May 15, 2007 at 11:00 a.m. Eastern Time, we will host a conference call to discuss the financial results for the period ended March 31, 2007. Following the Company's remarks, there will be a question and answer period. The conference call telephone number is (800) 810-0924. Participants calling from outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada should dial (913) 981-4900. 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 through Sunday, May 20, 2007. To hear the replay, dial (719) 457-0820. The replay pass code is 4243394. A live audio webcast of the conference call will also be available in a listen only mode on the Company's web site at www.tatravelcenters.com. Participants wanting to access the webcast should visit the Company's web site about five minutes before the call. The archived webcast will be available for replay on the Company's web site for about one week after the call. About TravelCenters of America LLC: Our travel centers offer diesel and gasoline fueling services, restaurants, heavy truck repair facilities, stores and other services and facilities. Our nationwide network includes travel centers located in 40 U.S. states A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and and in Canada. [TABLE OMITTED] [TABLE OMITTED] Supplemental Information, page 1 of 9 TRAVELCENTERS OF AMERICA LLC INTRODUCTION TO SUPPLEMENTAL INFORMATION The adjusted pro forma information provided herein is based on our operating results for the two months ended March 31, 2007, and the historical operating results of TravelCenters of America, Inc., our predecessor, for the one month ended January 31, 2007, and the three months ended March 31, 2006, adjusted for HPT's acquisition of our predecessor and our recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and spin off from HPT, or the "Transaction". The adjustments applied to the historical operating results are described in the reconciliations to the historical financial information beginning on page 6 and the notes thereto beginning on page 8. The adjusted pro forma statement Pro forma statement A financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. of operations assumes that the Transaction occurred at the beginning of the period presented. The information provided in this release does not represent our financial condition or results of operations for any future date or period. Actual future results may be materially different from those presented herein. Differences could arise from many factors, including, but not limited to, those related to our operation as a separate publicly owned Publicly owned can refer to:
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , our capital structure and other factors. Further, we have not given pro forma or adjusted pro forma effect to the following for any periods prior to the Transaction: * The costs which we will incur to operate as a separate public company. * Interest income we may earn on cash which we received from HPT prior to our spin off. Supplemental Information, page 2 of 9 [TABLE OMITTED] (1) See pages 6 to 9 for a reconciliation of the historical results to these pro forma results. (2) Selling, general and administrative expenses for the three months ended March 31, 2007 includes $1.9 million of expense related to executive retention and separation payments and $4.3 million related to our predecessors stock compensation plan.. (3) Our lease with HPT requires us to pay rent of $153.5 million for the period from February 1, 2007, through January 31, 2008. Our lease with HPT requires us to pay, on average, $170.7 million per annum Per annum Yearly. over the 16 year lease term. Certain of our travel centers leased from HPT do not qualify for operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. treatment but are instead treated as capitalized leases under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . As a result, a portion of the rent expense to HPT is recognized as interest expense in our pro forma statement of operations (see Note D to this supplemental information on page 9 for a further discussion). Under GAAP, we recognize our rent obligations on a pro forma basis as follows: [TABLE OMITTED] Rent expense also includes "other real estate rent" related to real estate leased from parties other than HPT of $2,791 and $2,705 for the three month periods ended March 31, 2007 and 2006, respectively. Supplemental Information, page 3 of 9 [TABLE OMITTED] (1) We calculate EBITDAR as earnings before interest, taxes, depreciation and amortization and rent, and we define Adjusted EBITDAR as EBITDAR excluding the impact of certain non-cash items and certain items which we consider to be non-recurring. We consider EBITDAR and Adjusted EBITDAR to be measures which are useful indications of our operating performance and our ability to pay rent or service debt, fund capital expenditures and expand our business. We believe that EBITDAR and Adjusted EBITDAR are meaningful disclosures that may help shareholders to understand our financial performance, including comparing our performance between periods and to other companies. However, EBITDAR and Adjusted EBITDAR as presented may not be comparable to amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses or any other operating or liquidity performance measure prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by GAAP. (2) The historical noncash share based compensation expense relates to the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of options of our predecessor's, TravelCenters of America, Inc.'s, shares which were redeemed upon the closing of HPT's acquisition of TravelCenters of America, Inc. (3) This amount relates to costs incurred by our predecessor, TravelCenters of America, Inc., in marketing itself for sale and consummating the Transaction and primarily consists of investment banking fees, other transaction advisory fees and management bonus payments. (4) During the three months ended March 31, 2007, pursuant to the employment agreements we entered with former executive officers, we accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. $1.0 million of expense related to separation payments due to these former executive officers in 2007, and also amortized into expense $0.9 million related to various retention bonus payments that are required to be made in December 2007 and January 2009 to certain of our executives who remain in our employ through those dates. (5) For the quarter ended March 31, 2007, the amount shown relates to cost incurred, primarily non-cash write-offs, by our predecessor, TravelCenters of America, Inc, in connection with the repayment in full of its indebtedness. Supplemental Information, page 4 of 9 [TABLE OMITTED] (1) Includes operating results only of company operated travel centers and excludes results of travel centers operated by franchisees. (2) The operating results presented for the three months ended March 31, 2007 represent the sum of the results of the Company for the two months ended March 31, 2007 and the results of our predecessor for the one month ended January 31, 2007. Supplemental Information, page 5 of 9 [TABLE OMITTED] (1) Includes only company operated travel centers and excludes travel centers operated by franchisees. (2) The operating results presented for the three months ended March 31, 2007 represent the sum of the results of the Company for the two months ended March 31, 2007 and the results of our predecessor for the one month ended January 31, 2007. (3) Includes travel centers that were continuously company operated since January 1, 2006. Supplemental Information, page 6 of 9 [TABLE OMITTED] (1) See page 8 for footnotes. Supplemental Information, page 7 of 9 [TABLE OMITTED] (1) See page 8 for footnotes. Supplemental Information, page 8 of 9 TRAVELCENTERS OF AMERICA LLC FOOTNOTES TO PRO FORMA ADJUSTMENTS (in thousands, except per share data) Pro forma Statement of Operations Adjustments A. After our spin off from HPT, we entered into a management and shared services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. agreement with Reit Management and Research LLC, or RMR RMR Resting Metabolic Rate RMR Registered Merit Reporter RMR Reliability Must-Run (electric generation plant's status to maintain grid voltage/reliability) RMR Recurring Monthly Revenue (finance) , pursuant to which we will receive certain management services related to our current status as a separate publicly owned company and as more fully described in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. This adjustment represents the expense we would have incurred pursuant to the fee formula in that agreement if that agreement had been in effect for January 2007 and for the three months ended March 31, 2006. B. Our agreement to lease real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most by HPT requires us to make minimum rent payments that have scheduled increases during the term of the lease as described in our Form S-1 filed with the Securities and Exchange Commission on January 26, 2007. Adjustments have been calculated as follows (this rent is included in our historical results for the two months ended March 31, 2007): [TABLE OMITTED] C. As part of the restructuring we retained a portion of the property, equipment and personal property used in the operations of our travel centers. In addition, we retained certain identifiable intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . This adjustment represents the elimination of historical depreciation and amortization expense recognized by our predecessor and the addition of estimated depreciation and amortization expense related to the property, equipment and intangible assets retained by us at allocated valuations. The depreciation and amortization expense is based on the estimated useful lives of the assets (this expense is included in our historical results for the two months ended March 31, 2007). [TABLE OMITTED] Supplemental Information, page 9 of 9 D. Our spin off from HPT required us to evaluate our lease with HPT under Statement of Financial Accounting Standards No. 98, or FAS 98. Under FAS 98, thirteen of the travel centers owned by our predecessor that we now lease from HPT did not qualify for operating lease treatment because more than a minor portion of those travel centers are subleased to third parties and one travel center did not qualify for operating lease treatment for other reasons. We carry these travel centers at an amount equal to HPT's recorded initial carrying amount, equal to their fair value, and have an equal amount of liability, representing our obligation to make future rent payments to HPT, which future payments will be recognized as interest expense in our statement of operations See Income statement. . See Note B. E. All of our predecessor's debt was extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. at the time of HPT's acquisition of our predecessor. This adjustment represents the elimination of historical interest expense and other financial costs related to our predecessor's debt. F. This adjustment represents the net effect of eliminating our predecessor's historical tax provision and establishing a tax provision, at our estimated effective income tax rate for 2007 of 37.8%, based on the pro forma amount of income or loss before income taxes for the period. G. This adjustment represents the elimination of our predecessor's shares outstanding. |
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