During the three months ended March 31, 2009, the continued slowing of the U.S. economy presented TA with significant operating challenges. TA experienced, on a same-site basis, a 16.4% decline in fuel volumes for the 2009 first quarter as compared to the 2008 first [image-nocss] quarter. TA said that it believes that its fuel volume declines are consistent with declines in trucking activity and diesel fuel consumption generally.
Despite these business conditions, TA said that it believes that it has made progress toward adjusting its business to these challenges. TA's net loss, EBITDAR and Adjusted EBITDAR for the first quarter of 2009 improved over the same period of 2008 by $30.4 million, $31.5 million and $23.3 million, respectively.
TA said that it believes that its operating initiatives have been significant contributors to these improved results; specifically, the staffing reorganization undertaken to realize integration synergies associated with TA's acquisition of Petro Stopping Centers LP, or Petro, in 2007, the personnel cost savings related to the workforce reduction announced in 2008, the 2008 termination of a fuel marketing arrangement with a third party marketer and a number of ongoing cost reduction, fuel purchasing and pricing strategies that were designed to improve TA's operating margins.
During the quarter ended March 31, 2009, TA invested $6.4 million in capital projects and received $2.8 million of cash from Hospitality Properties Trust, or Hospitality Trust, from the sale of qualifying leasehold improvements with no corresponding increase in rent. TA's current capital plan for 2009 anticipates expenditures of approximately $60 million, some of which may be sold to Hospitality Trust under the lease agreements TA has entered with Hospitality Trust, including up to approximately $13.5 million of undiscounted qualifying improvements that may be sold to Hospitality Trust with no increase in its rent and which amounts may be discounted if the timing for the sales of the applicable improvements is accelerated.
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 are due no later than July 2011. TA said that it has taken advantage of all deferrals available to it thus far, including $15 million during the three months ended March 31, 2009, and $30 million during 2008.
At March 31, 2009, TA had approximately $167.9 million in cash and cash equivalents. In addition, at March 31, 2009, $32.2 million of TA's $100 million bank credit facility remained unused and available for borrowing.
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.
Click herefor a transcript of the TA earnings, courtesy of SeekingAlpha.com.
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