WESTLAKE, Ohio --TravelCenters of America LLC has reported second-quarter net income of $3.52 million, compared to net income of $3.77 million in second-quarter 2015.
Fuel revenue for second-quarter 2016 declined by $193.9 million, or 17.2%, primarily due to significantly lower market prices for fuel compared to second-quarter 2015, partially offset by increases in the convenience-store segment as a result of newly acquired sites. Fuel sales volume increased 26.4 million gallons, or 4.9%, in second-quarter 2016 compared to second-quarter 2015, a 55.5-million gallon increase from sites acquired since the beginning of second-quarter 2015, offset by a 29.1-million gallon decrease in same-site fuel sales volume.
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Fuel gross margin increased $5.7 million, or 0.2 cents per gallon, to $102 million, or 18.2 per gallon, mainly due to managing fuel pricing to balance sales volume and profitability.
Plans to offset diesel-fuel sales declines due to improving truck engine efficiency and declines in over-the-road freight volume with increasing gasoline sales at its c-stores and to increase profits by growing the company’s nonfuel businesses “seemed to begin to show results” during the period, said TA CEO Thomas O'Brien.
Nonfuel revenue for second-quarter 2016 increased $54.9 million, or 12.1%, compared to second-quarter 2015, a $59.2 million increase due to sites acquired since the beginning of second-quarter 2015, offset by a $4.3 million decrease in same-site nonfuel revenue.
Nonfuel gross margin for second-quarter 2016 increased by $25.8 million, or 10.5%, compared to second-quarter 2015, a $21.9-million increase due to sites acquired since the beginning of second-quarter 2015 and a $3.9 million increase due to an increase in same-site nonfuel gross margin.
Nonfuel gross margin as a percentage of nonfuel revenue for second-quarter 2016 was 53.4%, a 0.8 percentage point decline compared to second-quarter 2105. This decline was due to a change in sales mix as a result of the larger number of stand-alone convenience stores in second-quarter 2016 results. Nonfuel gross margin percentage in stand-alone c-store operations is typically lower than the nonfuel gross margin percentage for travel center operations, the company said; stand-alone c-store revenue represented 15.2% of total nonfuel revenue in second-quarter 2016 compared to 7.0% in second-quarter 2015.
Travel Centers
Revenues from TA's travel center segment for second-quarter 2016 decreased by $270.4 million, or 18.1%, compared to second-quarter 2106, principally due to lower market prices for fuel and decreases in fuel sales volume.
Site-level gross margin in excess of site-level operating expenses for second-quarter 2016 increased by $1.2 million, or 1.0%, compared to second-quarter 2105, a $7.1-million increase in nonfuel gross margin, due to a favorable change in a mix of products and services sold, partially offset by a $5.2 million decrease in fuel gross margin and a $0.7 million increase in site-level operating expenses.
C-Stores
For the c-store segment, revenues for second-quarter 2016 increased by $121.4 million, or 161.4%, compared to second-quarter 2106, due to increases in fuel sales volume from 172 sites acquired since the beginning of second-quarter 2105, partially offset by decreases in market prices for fuel and a 6.0% decrease in same-site fuel sales volume due to retail pricing strategies to improve profits. Revenues also increased as a result of increased nonfuel revenues from sites acquired since the beginning of second-quarter 2016
Site-level gross margin in excess of site-level operating expenses for second-quarter 2016 increased by $7.2 million, or 210.4%, compared to second-quarter 2015; $7 million of this increase is from sites acquired since the beginning of second-quarter 2105 and $200,000 mainly from a same-site increase in fuel gross margin.
Westlake, Ohio-based TravelCenters of America operates 253 full-service travel centers in 43 states and Canada, principally under the TA and Petro Stopping Centers travel center brands. The company also operates more than 200 convenience stores, principally under the Minit Mart brand, in 11 states.
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