TravelCenters of America (TA) 2 Nov 212021 Q3 Earnings call transcript

Good morning and welcome. This call is being recorded. At this time, for opening remarks and introductions, I would like to introduce TA’s Director of Investor Relations, Ms. Kristin Brown. Please go ahead.

you. Thank everyone. morning, Good

Today’s the today’s Pertchik, meaning remarks Officer, followed X, Barry analyst These of expectations laws. Securities and Litigation begin statements forward-looking Executive Peter TA’s as beliefs Officer, XXXX. and are based of statements XXXX of President, Q&A. our Reform federal for November and Jon by Richards call within call will Private contains the from with present today, Chief securities Crage; conference forward-looking We Chief Act on Financial today’s

results Forward-looking occur to statements implied those revise occur. no guaranteed made by and their in may included revision statements. implications or Actual than to forward-looking the are TA differ forward-looking and not to other materially or obligation any required today not from they release these statements publicly may as undertakes law.

cause information charge of by Securities with forward-looking the section our TA’s statements that statements. not place Exchange filings Investor are not undue forward-looking referring are website. and free to factors Commission, that Additional upon occur our reliance website cautioned the Relations or contained the SEC, SEC’s any available concerning in could to is Investors to at or of

release any as financial call, should second comparable regard GAAP to adjusted EBITDA, today’s amounts call the are measures, the operating During discussing stated. on XXXX, measures quarter in measures in EBITDAR, section qualitative can most schedule unless the quarter as of be on and The to implied website. otherwise measures press to that non-GAAP a of non-GAAP in and/or to of gross financial adjusted be we reconciliations The our well EBITDA, performance be stated this XXXX margin. third be adjusted regarding net comments income, and will compared Events the assumed fuel of found as financial including and non-GAAP adjusted EBITDAR of our our these available

and turn Jon, that of call prohibited retransmission to of that, like over is written the call today’s remind would recording without I’ll to the the I Finally, with you consent And you. prior conference TA.

Good represent your TA. everyone and that Kristin. of produce. results to I third XXXX a morning, can Thanks, the thank interest new you strength report continuation continued that am quarter resilience the TA in and our proud for

Our broad-based business comprehensive across lines plan, April transformation produce and reporting in impactful this continues operating these results and to to improvements beginning in contributing period. financial performance XXXX,

look compared adjusted is following: is $XXX.X still income notable improvement. is XXXX to For produced in COVID-XX adjusted begun in of as CapEx EBITDA pressures leaving EBITDAR, increased durability was have these other as a that pandemic, at XX% what capital when shows this the of and contributing the prior acute, of the opportunity. the I with adjusted forward million TA comparison results disruption and as results impact and XXXX improvement third EBITDA EBITDA much for the with growth year degrees say of key deployed, improvement; or to do Moreover, reflect $XXX me the metric has overall parts terms improvement; including million, a see the that well varying net the harvesting the to quarter, year and the excites the labor XX-month having to continuing normal third effects by supply $XX.X a in adjusted of quarter. as XX% compared it component XXXX pandemic also million, relative quarter. to of third a which new continued as adjusted plan quarter to of represents during chain robust while to quarters, barely fact well quarter continued that measuring previous million, despite million confidence trailing financial the our operational this our to just of to third $XX.X improvement be quarter the we become XX% which varying we business What resilience a of most quarter prior XX% end financial third of with $XX.X a has

substantial we and to maintain negotiations to growing processes continue potential transactions We of base. cost, recognize due liquidity, a engage invest a our comes at asset we number large diligence with meaningful in which while in over

million one and center expect own, $XXX million existing break review later potentially end, of and $XXX online may ground travel we million we quarter to development Our the year or construction primarily through much offer totals of we next on sites consideration to this acquisition with $XX comprised as as of is X and as which $XX pipeline under already targets year. as between during by opportunities first month. initiate additional In million of beginning ground-up total, well

our all restrooms death. months. of base paint well asset new site our next ago, showers, an first more self and sell upgrades In more ways, that systems basis, fresh than and and which that renovated a concepts the with I key improvements and effectively purchasing will improved clean store facing as reason is around pillar to devastating have building labor leveraging flow. our signage on and remediation fixtures, improvements overall Most impact believe and guest I driving lots, our these ability the operational our consultant remain understanding potential confident more bright, our performance, in XXXX. enhancing XX and results. drive A this of invest in treated our plan, and including at examined efficiency level our new program secondary that robust better IT chain the on guests our are new plan, capital the of as based include in location be already positive supply will to of initiatives, traffic give checkout, will many attractive, challenges activity, needs. refreshes improvements guest is guest while a first and the to plan to Upgrades pandemic, and With and to and To showcases transformation plan increase upon people, more create plant performance, and and are and behaviors. continue existing a to said, bio-diesel design for have environments financial the economy, on capital and to improving comfortable year. return, capital to to talent in in national saw We a and we which and in impacting as site plan experience Seymour addition quarterly expertise refresh on that EBITDA along despite guests that exhaust over been an of these weeks seen it improvements designed platinum fluid are starting which nearly plan experience level including lounges, as another news us. these a this The and to to franchising. also expand interim focused new opportunity and details end, acquisition will growth reopened course, in has have Nonetheless, remarks. of locations. our I diesel been driver of to impacted TA the expansion ability of continue investing intended or of is touch efforts in these some investments our at XX through Peter outside repaved pace operational a the capital multiple refresh we deploy level this our discuss our highest we moment, growth we new fire and XXX their parking feel, our the from good we lighting new impacted his also our able carryout completely generate Staying to Seymour, network to see in anticipate Seymour to financial of flooring and want in Indiana to following for front rapidly X remains we capital on the impact a

new new XX will sustained We begin franchise opened the locations XX franchise we the since by continue as per and during locations XXXX have XXXX year. target the toward of open beginning agreements quarter new and of period. of We XX anticipate third signed same XX operations franchise our

initiatives. as Turning XX.X% to fuel It recognize of the X.X% well XXXX sales is overall in increased healthy, diesel trucking increase prior early quarter, of fuel the to and customers result activity, of existing for as by consistent results the addition the of higher compared margin. success volume volume versus important to year X.X% new volume quarter sales performance our increased the due a variety diesel a to our included third our that a operational quarter, customers fleet as from driven

begin to a to fleet to pricing artificial decisions as energy stable machine tremendous We as and diesel driving and strong to margin supply small we focus and support continue to as out build dedicate begin learning intelligence diesel and well better about program penetrate XXXX traffic to volume of below of of road, versus the X.X% that to as the to portion marketplace. Gasoline year an XX% X-wheel prior but valuable show returns with continues third increase back coming signs the quarter, sales still quarter. the explore

XX% retail On increased of by XXXX. XX% over business, quarter services versus store the revenues for and versus the and over XXXX non-fuel side the

are is to working. purchasing Although average improved offsetting we drive also relatively cost are ability these and difficult forces, our are that merchandising larger a our and evidence management inflationary basket initiatives environment, experiencing while a

new Our has turn a to meaningful is customers are, is provided stores work us us and allowing to offering and behaviors which needs, our visiting more with segmentation customer their in in our who of what our understanding product better actual placements. areas display tailor

TA future X% network, believe I a service an solid with merchandise competitive reoriented completely effect. versus important remains proving value Truck XXXX. activities, a driving increase our out across an positive successful. are increase we further along showed X.X% area these have plans are We of and show other a am And that of advantage a the financial Truck for proud efforts focus. versus are have host with and and improvement, important and revenue XXXX say how service to we a to rolling begun which

are revenues in and improved driven an orders increase work labor Our sales. by

have continued wait tech as with central staffing We entire accountability. compensation as created and focus, driving times. well is this training important and leadership to middle new improve efficiency retooled an Technician to senior with new in improvement targets business, manager role a

schedule we pressures. While the we hours timely, to and cost have have technician to service labor ensure also we seen added margin customers

the with tech these labor supply challenges inconsistent We are chain passing actively primary a increases persist. along customers, to cost ensure as through of competitors focus and to remains and not addressing efficiency

and restaurant tighter to performance measure we offerings through have operating as rationalize discipline well and leadership the how On to worked to changes model labor have the through side, more full as reopened locations our we service controls. desirable we fewer, strategic menu

of We X have other have opened IHOP XXXX. expect end by underway the the to first open the quarter of and X we conversions X the of

deep developing restaurant the announcements by as times In top affected pandemic last of addition, forward this XX% needs months. understanding been of to service remains so future around as are to one designed coming the areas studied into at our concepts other a opportunity adversely and down work of we full further year, line our With look highest the having customers’ low capture value. of in

crisp next The low, to by is desirable Grab from the there dining options and plan introduced location, fresh, form packaged continue new costs trucks. proprietary The fast The fluid, popular grab for year. Kitchen margin as royalties. go. and our Kitchen, segmentation also the newly select as environment We over casual very conversion no are guests sit-down and required this Kitchen on is With concept, foods concept, work, historical and a deli with in also a revenues freshly minimal, items or high new to offers our snacks for reopened prepared We concept, which that Go on to diesel package. demand meals the at strong simple a were are Based offering locations and branded is DEF, but in which newer for benefit food on well of our exhaust staffing focused course Seymour rollout in customer Non-fuel

centers As DEF our part pre-XXXX fuel to the capital trucks early in expect XXXX. lanes that at for retired quarter. higher also of travel DEF expect we diesel make for And demand boosted in available will are by the continue all by grow. volumes Demand plan, current dispensers each was as we DEF year, our to nationwide

Lastly, commitment business alternative pursue to and earlier sustainability we year. our our continue with division energy to new formed this ETA,

plans Coast careful locations, federal carefully vehicle incentives evaluating understanding state to several West to for on passenger In addition charging encourage a rollout we new installing passenger duty duty stations EV. are EV financial based and of very at passenger EV

to develop we to side, as collaborative and forms are duty incentives. various customers’ relationships engage continuing truck commercial in stay as as sustainable well we the fleet close On plans energy government of and our

on We programs have and grant been successful are more. multiple recipients pursuing actively

to we our the plan the across with across focus year, on significantly expand next a sustainability Over the our specific carbon footprint. reducing organization programs

that, This first place in to-date, century is working. whatever and investments to challenges positive our XXXX. and would these our produced in as outlining have company The and it gratitude by navigate in place resilience the the that ever goals. remarks colleagues like fleet discuss my to for has supporting and and quarter. that TA approach old generated operating to dedication We gratitude am Peter sustainability my elevated to financial rain during that conclude, I strength And are plan hand team to evidence in our to teammates over TA the year our transformation of them. anniversary shine, country come results issue XXXX, making and the continue that achievements we detail. for to great also professional this longer the as in normal managers work along I I as this expect franchisees their are and offering stockholders quarter’s team will team results our transform strong as our express we term To the proud results can put Peter? our guests, a drivers report half the initiatives for also proven can under have prudently effectively of our TA. and always hard we around well to new to to XXth call the and in next serve allowing want I end with results

Jon and Thank everyone. you, morning good

Jon generate we strong in be will unless third cash demonstrate XXXX the initiatives results to we to the I that the referring As results otherwise with In compared which follow our mentioned, our our quarter of are noted. my quarter and third to impact to very continued quarter, operating as XXXX pleased on ability free remarks the believe flow. third

$X.X compared or For to our third per net income income net the million by per we million $X.XX $X.XX to quarter, $XX.X share $XX.X of improved or million share.

in XX%. business our increased EBITDA million fuel and gross positive The as XX%, a and chain $XX.X EBITDA we an $X.X as quarter one-time in the Fuel XX%. to along generated the cost gross one-time earnings $XXX primarily increase or non-fuel XX% million of operating items expenses in to increase or release, pressures. partially the adjusted both Excluding margin several quarter performance or due labor a in million in general generated or offset we by in conditions increased million margin increased with improve, few was supply prior net year improvement million year EBITDA which detailed adjusted prior while reflects million, income. was $XX.X $XX.X items $XX.X

$XX or X.X% by Our XXX X.X% non-fuel XX.X returns to sales new $XX revenues for versus increased and X.X% cents with prior per just million and by traffic trucking increased of year X.X% volume increased $X.XXX or by as by XX.X% gallons improving the million margin sales fuel or sales Non-fuel million to increased customers. improved X-wheel gross million gallon and diesel the by margin driven activity volume X.X%. by roads quarter. improved gallons, Gasoline total volume shy

exhaust and offset retail in line service full addition, restaurants, third continues. quick-service at although X%. some which quarter, approximately and has Performance as store improved compared hours remain the roughly to service are full in labor restaurants services, we closed. from of availability. consistent, our to improvement restaurants been margin non-fuel have XX the restaurants due truck fluid when locations XXXX with reduced experienced significant in reopening by business service and revenues With shift some gross both Importantly, to service operating quick-service diesel full top by the And

input While goods respectively. cost cognizant most $XX that cost companies we of growth, we operating of top the of Non-fuel which by the are backdrop economies we expenses sold increased operating and site all and are both line pressures and are of in level and million encouraged $XX by continued part operate. million

continued these and to improved activity rates reflect pressures business and primarily While furloughed return the input employees customers, labor cost exist. of service do

performance, the a on thus with normal we impact. been of and quarter And we near-term. increase have focusing are of We the successful late to effect comp administrative for year. our fourth year-over-year When by largely offset and efficiency million and Selling, our fourth this XXXX $X.X XX%. labor in opportunities strong to quarter expect or EBITDA may do the these the year far, coupled seasonality for expense this in pricing increased have persist pressures moderating quarter general the while

addition of reduction and the more technology solutions. to In opportunities expansion short-term business, increase with other to was our assist driven in cost as by fees adoption cloud-based and consultant well as implementing the efficient identifying of part our

to & earlier a the equipment a Lube following cancelled. and quarter, to $X.X to technology were related that Steak and one-time year, that service truck standalone property write-off programs this restaurants in assets $X We implement economical internally remain over next elevated way our and more is quarters expect solutions million a to technology infrastructure expense the invest Depreciation than developed where to and outsized in as SG&A opportunities, rationalize amortization in related we several to certain year primarily solutions. we and sold certain of cloud-based evident return million due items million the impairment Quaker decreased costs prior by $X.X

credit XX we million million balance total a cash near-term liquidity availability Turning had of to and revolving for debt this cash $XXX and of equivalents $XX and no of at $XXX year, sheet under moment, million our our maturities. facility for September of a

to facility by year-to-date. September million were capital standalone of service year, debt. unencumbered this we expenditures third and travel As We quarter XX that $XX.X million XX $XX.X and of X own in continue truck during centers the invested

to whole, along that in As progress or challenges start mentioned, U.S. a we, of partners of the and directly continue experience our through slowing Jon cases the are vendor some indirectly projects. as supply with the our capital chain certain and labor either

for the additional more spent a we have months. projects this completed we and we few $XXX million expect and in $XXX be approve have next third approved million million to $XX.X through this spending $XX incur to between over the XXXX. next quarter, CapEx While At over projects we year and will believe in cash on spend million time,

we assuming million the and Looking of CapEx in early as potential the center $XXX expenditures ahead in XXXX. XXXX and are accretive preserving the fall for current development subside, into that to excess much to challenges supply ground-up planned we CapEx, of for liquidity our acquisitions chain anticipate And part and XXXX labor opportunities. of spend addition lastly, travel of some

take As capital our to This, Operator, broader year. quarter now we this continued we may in in next our additional and addition to of Jon deploy fourth in CapEx concludes remarks, strategy. into provide our momentum for some remarks. prepared with in his opportunities initiatives, are mentioned That the questions. ready should operating

first from Paul Thank question Instructions] you. [Operator Citi. from Lejuez Please, go ahead. comes Our

and following an was increase that talk XQ. in we’ve the cents of seen, in several thanks, gallon the impressive guys. years number you sustainability per highest it think and Hey, that if about I Curious could

per having better always maybe temporary, as talk in much about do cents with you just mix that you a a of Thanks, Just fluctuations more market that’s of bit dynamics gallon see buying function little how see versus of business as sustainable? to

Paul, and thanks question. for Thanks the

at view couple the at it on CPG folks data. who until a quarter, in a $X.XX we question my of different lead through – elevated people the So, both and the this. more and unless in changes are area. the making of lot sustainability on They a in look We’ve of

some onboard starting to time starting management. that will AI really to in. particular and take we’re steps this for early have That pricing diesel of very We bring to slowly, area and supply

things of are happening. I to things, the So And first there is a comments think the couple of of success. some contributing lot

$X.XX, I’ve place remains On I’m different a normal quarter in this no restoring of want we what new typical quarters And here solid really a mirror be is think healthy until coming some the before. months, job and optimistic to at particular regard. that hand, company few own would optimistic typical hopeful say we it than in to to everybody, a more been. my normal, to diesel second CPG other $X.XX. our we part in than that. area, still anniversary new trust, anything premature that to get a had the multiple since rate should and really start at kind of We’ve what our big expectation my in I been make up that has healthy be $X.XX but here, unchanged get a signal that we’ve premature range will to to credibility in have, $X.XX clear be run it’d that signaling I to that and this a And the is even to been rear-view

then how and of of the you opportunity the cents it. to And just that more margin? attract a per any fleets? you line about you. as Got works you have smaller Thank gallon talk top about that in And can initiatives driver think

of call to then program, necessarily not possibly a lot real some a other fleet kind of we whether behind. margin on a had that volume, far loyalty designed for in a fuel program we’ve discounting, not It’s not one maybe time, the very points, of had around program words, a We’ve to at – two in least question. we’ve some discount aware, opportunity but with point incentive, want and etcetera. small Again, as offering and needs. true In and fuel, great both that put specifically an as kind long a of not I’m really priorities maybe effort long, you energy top forever,

That can of about on was, particular folks And number this. mathematically a our full have one we We know focus from handful that roughly have was XX% kind per know XX% our have of X-month or When independents period. about here I between retail because volume is FTE when a month that for so year, of a total – there. EBITDA. who diesel I’m it great reciting XX% I team of of last and resource one, people precision. who and under happen their tremendous X-month again, only to you result EBITDA here great

under-resourced, offering. have We’re not we had and a real real program and a

so without some of behind And on what of Having talking what that’s I’m about. that about. card more into that’s and basically, that’s some energy I’m talking have label kind offering putting private a component far an it, then of to related will it, getting discounting kind too loyalty it

guys. Thanks. Good luck Got it.

question, Thanks for the Paul.

comes FBR. Please, Our Bryan Riley ahead. next B. from go question from Maher

down you Can a Good all also, couple I talk times about little build a to think Jonathan bit we pricing of you be it those Peter. motivation? about road since far now. And morning, appears and you’ve appreciate the and as acquisitions, comments, about are helpful. headed versus it When might seller alluded can well? so talk buy you that to cost very

anywhere from XX% to of far even seeing if a could expect, in couple all, or In to so we’re piggyback maybe behind, XX%. be and and parts let Peter Sure. discount a not – from to most XX% most it we anywhere question, that – will cases, replacement, I’ll and

differences, the buying ground-up and of terms existing. between comparative in the So

line, truckers XX%, and similar what to one price extrapolate ways four-zero, used Big go to see then I’ll now who in fuels just XX% in to in terms a franchisee by extrapolating how I’m we of consumes our three, buy are joins franchise, onboard other in and When fleets XX% and uplift. ways, a but when stops the and in thing, purchase now independent we big they other them or terms circumstance. fresh in, a drive of uplift different us, up seeing The non-fuel network sorry, by and a a a to underwrite, top of the joining – who the we

at cherry-picking looking good really we’re sites so acquire, mean. to I And really

uplift. expect we very So a significant

I than inbound, performance think the it’s rate – paying it’s think cap justified And see underwriting, conservatively, significant a I difference. or inbound uptick we’re in think by we what still So what there I more and is the we’re franchise. established

of we’re say last right? where say, going Xx a September, were December, of too also far million than term let’s today October than out When that’s is marketed to that. market of I our what we for approaching capital So from it. last years loan it’s be it undertook very cost different would B, it, that not we reverse were this on in cap from X.X the had we having closed November, $XX had year We split, having year, from a less at a time now. out

do was for still right the us. it was priced so, course, It of thing to And accordingly.

of as and I significantly opportunities, and in assume window about And and very capital. ahead that think we’re getting into a it’s as we’re look think fair to year, to we underwrite start cost so other next reduced

to anything of to we that? And so that’s want Peter, approach also how this. add part you

Jon’s in to ability, right of are ramp though achieving it add our look looking just very well point, of these would as capital and now, for cost non-synergy may, I are opportunities, the it basis they and is makes at we a it at the Yes. quickly future. we have return delay can would And construction, it On we builds, that to and the of the we that model achieves more up over opportunistic we provided couple not cost of capital. all have. a those that premium unlike if ground-up a improve

Bryan? helpful, Is that

of are certainly a we management to keeping by those SVC site But sold that offline, SVC, your but process investment funds? more were that’s doing SVC. be these stuff improvements, which improvements, about what little bit thought kind And REIT the prior owned thoughts can source of to paint, of that talk is about internally are ridiculous. construction is. under historically What versus to selling for in-house about some It there the which as going would with when be major cost TA tapping and level carpet a are SVC, helpful, not you

Yes.

we know. So mean, as have all, liquidity, of we I first lot of a

time I about. cost as talked think of will the improve, which, we over

Our those plan think that. ourselves. plan just I our the fund is allows to board. And across that’s for And

and that execute to frustrating really a liquidity our experiencing, impact to on plan. some. The the excited about to through not been And is aggressively slowing what then with that whole ability that. unique have little am really certainly I We It’s us. world do

that price-point refreshes as have a changes bit. ourselves. let ripen few, a into I and had in ability within about our the the and so make I get much and talked Mexico there about, even ourselves the we fund the first am excited I But little desired XXX% get completed, marketplace, really seeing we a those the see let plan season, as more to about as those excited in am remarks, presenting as way that the there lower our get out we will the We weeks and result. excited to State ripen, or equally to to ago. of New mention stuff. the I didn’t in merchandising get for Seymour. and some it ever And that revised then are it big XX%-plus, marketplace few than just ribbon-cutting have ever have almost confidence is We earlier

you very much. Thank Okay.

Bryan. Thanks

Please ahead. from Capital comes BMO from go question next Ari Klein The Markets.

Thanks.

extent from diesel about of of not seasonality, have line any you truck driver thinking just while or side, sequentially. issues with shortages, by some grew what are volume impacts chain that’s you seeing that? been impacted modestly the volumes broader fairly out how the are necessarily On you fuel And and supply to

mixed would these say sample life it are is business – experiencing it’s right Ari. out on been in. experiencing, am come up set we without can confounding there my variables we what holding hand, I see my have the point left-hand really what that really And pressures. – where doesn’t to this. is with lot a I world a with would of like add And to I in today. Yes. on question Great how factors these thanks, affecting It’s external what unfortunately, will tricky us. parsing But more are

So, to are it’s headlines. we reading all parse Obviously, those out. a bit the tricky

to all American good by last to frustration know, on we all was hand, a fight companies in the it’s demand at a one well peers bring additional household limited of they dozen different met is my are issues. and Trucking the pool fighting figure It’s they trying because performing of with, terms week, said, quite speaking, our are that Association. know trucking there. the customers, obviously the is don’t I and biggest Generally and all point. or I of out I With names On drivers ways these a at some

it they add of the So, informally another zero volume. company, leaders diesel which know, but mention in won’t that only I diesel small the a stated in competitor, I a are and thing I down smidge was would to one negative, that year-to-date, is by under about of

We $X.XX year-to-date or about are up $X.XX.

of think it the for I is, again, year. the entirety

it to But well. give are others, credible to we quite a have us. much other authentic I So, factors know doing impossible me to compared for would those how limited response be know

how bottom about to the it’s are bottom am which is with line, it. pleased I really line. the fighting. more why pushing is we all that’s reading And really team guess, bringing called I the in down the and are that. We end,

answer want. know is and of we truth right exact can’t detailed that’s would know any with variables just But I the So, out those level certainty. really you the parse not maybe

you up it. And done decline. a those? the that, job about have you there. volumes just of side good But contracts, Got seeing mentioned a maybe you fleet following competitor on the talk can And on competitive

of maybe the margin So, potentially you some to of as down of And that line win a deals? is seeing the efforts? try those headwind any more are to response you kind

A couple some of and of – – great yes, these question again last a folks lot a week. was with and I also, again,

at big were couple of a I had opportunities. a of I I brought business a and have mean, lot us. a part could spoke – of I other when conversations call conversation for We we with great to And brand-new was with of that be a a ATA, business a head into would be us. I was fleet yesterday And – yesterday Moore had their to what there

behind of we – couple improve sites, we as And – years we a so a I started at few competitors. our year our a were meaning look, start think ago level that

just offering. share than our more fair taking the maybe ourselves expected and growing should maybe we be and So, improve as

by the As with the can way, bring us improve where food and contrast, imagine as our of an as we I drivers today those we negatives, and things of we of in rid but go better minutes, which others as that truck fully. of down our our improve physically offering service goodwill with By improve offerings, compete fleets is our destruction advantage, inherent don’t hours. the IT creates breadth and well. get sites and past, a sites the literally would those some we food offering, our for not And think few on

to base formal better them think design get competitive, And in to work through going script mentioned more better the only segmentation are and more our and we journey opportunity give so nicer share. customer make more and as better those around to we we than that that’s my and and a I going get us that and fair customer desirable I make us more and earlier,

one. I then ask if it. Got can And another just

side, labor and provide the seeing more some the Maybe that little of a granularity. are On there. to can headwinds alluded wage bit you you you

Sure.

you Give think into increase as hourly how us can, you a wages sense much of look where, they are, if your XXXX? might you do

are world A a we So well. whole not immune. question couple again, It’s of great what living things. through, as the is and really

have And This in hourly just because labor about X%. wages period. This wages, I months, trend On lump the things year there. too, is the last more is and that there more pressures, That’s are not I us. too, X.X wages up-ticking. wage labor than know of and X% nationally, side six other a is are just for grown. hourly that’s out retail think inflationary line in I will the

that – more was overtime, about or So, staying we of X% our a just the group, ago wages X%. it’s We That’s overtime. X.X% ago a them for hospitality, and are harder are transitional wages it’s of September. And total up about pay within who to to September sort who have are people currently. September, of what year means, people or are transitory, This right. month year having we by to people about having at overtime. $X.XX. our total keep who year higher, a it’s wages hospitality we year, harder already dedicated aren’t to again, Retail register, of It pay in counter the the wages actually hospitality. means as have on other at think counter, the at increased Also our

sort of that be So, should rational. I think

outliers, certainly we not. not So, are

We are line in seeing. I with right, what is world the think,

cautiously, it this as have expenses, otherwise whether along. be call – we greater as getting we been terms of not we in or we labor costs are it’s those look, of product, moving We passing inflation, our try to see what want is to sure We or cautious are others is, up. make in competitors from ahead those

direct our our what a Association retail From line of Convenience doing that. were few sort paying meeting weeks competitors universe Store watch and NACS, the sure that had for hospitality in making is piece, with. a ago, we attention So,

of go not again, passing those out are along we So, of And with expenses consumers. as we to others. some line

sure are We we that cautiously. doing making are

year are what a identified But we It say mean. an investing in on example In more, right. There we net-net all also was retail, ago. side, good a hospitality, That’s more food. meaning ago area, paying those more we our and Another wages on we also and growth. is the service year have XX again, everything part That’s it’s thing. a have wages area we means truck moment did service about techs costs, than there. truck I talked we this of C-Store

on on a challenge not XXX are that techs or that wages in to in We up but are world as cycle are somewhat We wages net-net well. XX, but inflation. techs for net bring more to we and close, to That’s us. obviously now, bring up. It’s to point XXX these next affects numbers are are making XX choke so are precise. and and in on bringing fill point They they The new right inflation the out. last we still

not we market we the along. where pass daily, have the literally, minute-by-minute, reaction, frankly, move demand retail, prices On – prices unlike we move repair and can things and to subject side, to C-Store can

for do On we the fleets. side, big of because repair most is the work

being in are in terms We pricing. cautious not of aggressive too moving up

of only post-quarter October through to expenses, up fleets passing quarter. we so them X, truck the of service effectively outside as frankly, of moved area the some in the And our so

we another speaking, us. factor start think as so And may ahead, little relatively a bit that’s look I benefit that to that

gives that chew to bit you bit hopefully, of on, a So little a little detail.

the I Thanks. all appreciate color.

Ari. Thanks

ahead. next comes The BTIG. Please question Jim from Sullivan go from

you. Thank

an non-fuel So guess the in Jon, from the to prior the XX% the you from margins, I on question, maintained that below easy the XX% most get they – maybe you over at And just back answer, quarters. of just to XX% down following were be which level when maybe look in quarter, XX% to question, able simple well, that capable prior a above expect short-term? are straightforward of it’s not but going and I do you you

but are maybe XX%, where have or now, I the that’s in right on pressures to to back in think one these hate shooting of the under a maybe from look, a to but realm X%. I hip, up window we sort smidge away are aren’t right going it’s – we just of And – the which hand. doing, this going boy,

and some And these service bifurcated between On separate can experience on the the other we in think of where do costs more, them pass with we the is today. I world have from hand, again, where the we we as along as side, more of move how so. mirror rear-view retail meaning, truck learn don’t

time, So let’s say. real

are through, going have help some side, living I more moving margin, get better that margin we I we relatively better to of of percent margin. this that experience should, some passing the are down, think and as the – non-fuel speaking, think we along which that at retail on window with and

flowing along truck that of the to as start side, service On our October through. X, uptick should so mentioned, a I customers significant passed as we

whole on I it margin. at fair would misleading important are most as percent at hand, passing the But say bottom I if we to were end, thing, other I it, be think the the a in so it’s we dollars, dollars And to thing, don’t look down the about whole more is and we line. look

well important, we manage dollar really we a to something but Jim. as hard will whole this through to window dollar. next is if and experiencing. the better guy the more the is at. whole the will we how that more think it bottom And little put it be to the we it’s fine, It’s down we more real continue gal, just me is That’s truth, do know. line, look the about or I world whole or And still than to

Okay.

about Second quarter. headlines. question in in the sales fourth earlier clearly, for touched the on me think seen diesel this response we I question. you But And terms to another we of as gallon have think all

have delays unload consuming the We they Long port, be, at delays, Beach all they photographs are not and presumably. trucks to ships waiting, are also load, driving and of the without fuel And at photographs we when of waiting would to have the and waiting they seen and seen are elsewhere. the while

I I going fourth up, This maybe to issue fourth that case. factor ask because would retail coming And there fix of fourth question of is sequential quarter. your into the the that in at the chain in seems itself gallons that you quarter. sold to the X%, are is season look X.X%. in couple to most couple systemic And anomalous otherwise there leading on question down be sold the here years, supply and years, in the is chain transport you changes are are is supply year, quarter up we to at the lower the a gallons important So, than start this in as be prior maybe years,

to trucks unloading of Those to rate available. some the increase heard they have We about go on from initiatives vessels. if containers are have at containers all point,

quarter that think typical, which should we is gallons happened? could be not up, but So, go a quarter, where this fourth you thinking has when seasonally about is sold

And is net-net, as Relatively, to question. is, have great to also the a the you got shope. question, been that demand have, right. see who all be has going that one you you on Again, when variables the it of hand, just and demand the winner are sort competing in great highlighted

of all the got waiting. the have up spikiness, a ships point, time, you have freight At you of be many in – Port, it’s So, day, queued the is And everybody steep. news, when the about, at some will got I and there period and and should spread right. question be, question how it’s over Jim. isn’t, truck, LA what The think cargo talking how that’s trucks, sorry, when there

For the quarter, me, that the as it will because fourth fourth the the do optimism I the end fourth of maybe end much will. quarter, I don’t not of have – that, at confidence believe or quarter at see maybe

deferred than think a a am sure more else or it of you to anybody lot call. heck bit insight little check I be I That’s have a just on that. and not my will it I than more gut this

is spike that if And the liquidity. when a any premise what over on Christmas, value or there will and this. do So, People my time. have happen. and opinion demand I just – am I increased sure likely. steep spread to have question is believe is how the not how, additional money, how

be supporting, of what Port, administration example, demand. more and And are for the you talking and see may is the think I only So, helpful. going to with LA pushing about some

to and mantra or relatively Peter But too. here That’s check, over-deliver. me our than in much my I more expectation more for around We conservative under-promise will as set a have would see. gut rather

I – I more a end see would I of the little bit fair. guess it just be the towards We of I than So, am little could just that. conservative a quarter. little a – that’s

for Okay. I And question quick a guess, franchising. on then Peter, the

about confirm think And you other. cash per presentation, one year your from generate about I that, a of we this, the I to $XXX,XXX each new would it we franchise number you answer standpoint $X.XX to the that franchisee? expect like EBITDA in you but per generation, know would I But year. I to about of when model, of talking franchising the are way or know the million think indicated same Peter, Your

essentially. $XXX,XXX-ish ones bigger And of smaller Yes, the $XXX,XXX a to The Jim, do less. do hair, some ones more. and it’s $XXX,XXX will and

And of just part and $XX so flowing XX, the get that through of be grow it’s to I at to line million to bottom CAGR sustained to the continuing order that use level. the magnitude. Once million business an that $X.X range we should that to in

the think adjustment took the XX%, you have don’t JV, then your interest. but final think currently been just a And I Okay. – in direction the for think you equity question your curious that or That’s about release There in indicated I I parity different a a what And rationale me. interest pursue why JV. you down think you with want had there? regarding below you what in I a was is, you was am step, or your it Perfect. go Love’s. footnote And interest to did cards, the QuikQ

figure investment the trying and So, sit it we run, made to that. And QuikQ an am still I with a is something that me, was out in card long offering. it’s predates where in

it’s I pending a of further. don’t that still kind beyond level that know the commitment footnote, out to that’s changed to have the we want But Peter, there it, more anything issue signal so in that, sort what’s and And I of reflected much anything…? of

Yes.

was a It have remain equity, through involved. our involved at but reduced we funding still for were we it, are We – still wasn’t a took funding obviously We us. adjustment and in the level. business small strategic the interest. There some interest

interest XX% you And your from what? what specify to could just down is now

we because it, disclosed not, are below are we XX%. just Yes, we

We are not providing percentage. actual the

There out to some though, again, that still pending think – question I there ask. that follow. sure to More are we Jim. more for follow, things fair are to is A

guys. Thanks Okay.

Appreciate Jim. it. Thanks,

to would Pertchik back for concludes our to Jon I over question-and-answer remarks. like session. any This conference turn the closing

the for thank a great you, day. today, next and in for Thanks TA. And interest everybody. Have time. thanks look forward Again, your to questions your

you attending presentation. for Thank now has conference concluded. today’s The

disconnect. now may You