TravelCenters of America LLC (NYSEMKT:TA) Q1 2018 Earnings Conference Call May 7, 2018 10:00 AM ET
Katie Strohacker - Senior Director of Investor Relations
Andy Rebholz - Chief Executive Officer
Barry Richards - Chief Operating Officer
Bill Myers - Chief Financial Officer
Bryan Maher - B. Riley FBR
Garrett Klumpar - Citigroup Inc
Ben Brownlow - Raymond James
Good morning. And welcome to the TravelCenters of America First Quarter 2018 Financial Results Conference Call. All participants will be in a listen-only mode [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note that this event is being recorded.
I would now like to turn the conference over to Katie Strohacker, Senior Director of Investor Relations. Please go ahead.
Good morning, thanks for joining us today. 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 analyst questions.
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, May 7, 2018. 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 Web site, www.sec.gov, or by referring to the Investor Relations section of TA’s Web site at www.ta-petro.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. I’d like to remind you that the recording and retransmission of today’s conference call is prohibited without the prior written consent of TA.
And finally, we will be discussing non-GAAP financial metrics during this call today, including EBITDA, adjusted EBITDA and adjusted net loss, a reconciliation of these non-GAAP figures to net loss are available in our press release. And with that, I’ll turn the call over to you, Andy.
Thanks, Katie. Good morning, everybody and thank you for joining us today. Earlier this morning, we reported our financial results for the first quarter of 2018, which included a net loss of $10.1 million or $0.25 per share and EBITDA of $20.4 million compared to a net loss of $29.4 million or $0.74 per share, and EBITDA of negative $9.5 million for the first quarter last year.
You may have seen from our press release that we enhanced our disclosures this quarter by adding certain additional non-GAAP financial measures that we believe will allow readers to more easily understand and compare our performance without the effects of items that do not result directly from TA’s normal recurring operations. We plan to continue reporting these additional non-GAAP measures in future quarters. These non-GAAP measures included adjusted net loss, which was $26.8 million or $0.67 per share in the first quarter 2018 compared to an adjusted net loss of $21 million or $0.53 per share in the prior year and also adjusted EBITDA, which was negative $1.7 million during the first quarter compared to adjusted EBITDA of negative $1.1 million for the first quarter of 2017.
One of the unusual items we adjusted out in those measures was the $23.3 million reduction to fuel cost of goods sold that related to the 2017 federal biodiesel tax credit that was retroactively reinstated in February 2018, and which positively affected reported fuel gross margin per gallon by for $0.045. The other unusual items resulted from our litigation with Comdata, Inc. and retirement agreements with former executive officers. Bill will provide more detail about the new unusual items as well as the impact from this quarter's accounting change in a moment.
Despite the slight decline in adjusted EBITDA, we continued to see positive signs in our operating results that indicate our plans are working. First, the same site fuel sales volume change this quarter showed improvement compared to the trend seen over the last two years due to a stronger freight environment that we believe led to increased demand for fuel, as well as our fuel pricing efforts and marketing strategies that we believe have affected our share of the total demand.
Second same site non-fuel revenue increased 2.7%, while same site non-fuel margin increased for the 4.5%, as our business initiatives in our Travel Center segment, including our truck service parking and fuel marketing programs, continued to gain attraction. Third on a consolidated basis in the first quarter, we saw increases compared to the prior year of 5% in total tire unit sales, of 44% in on-site mobile maintenance work orders, of 9.7% in RoadSquad roadside assistance work orders and 51.2% in Reserve-It! parking reservations revenues.
The Reserve-It! parking revenue growth was a significant acceleration from the 2017 fourth quarter, growing by 33.5%. The federal electronic login device or ELD mandate took effect in December 2017, and enforcement of the ELD mandate began in April 2018. We see the mandate increasing the demand for truck parking generally, and believe the ability to secure a parking spot ahead of time to ensure compliance with federal hours of service requirements will continue to appeal to a growing number of drivers who see this as a tool to help them maximize their driving time and their earnings.
Fourth, our consolidated site level operating expense ratio to non-fuel sales for same sites improved by 90 basis points despite a competitive labor market. We’re seeing the merits of a multiyear project to install a new restaurant management software that has allowed managers to better forecast sales and staff accordingly. We saved approximately $0.5 million compared to the same period last year as a result of implementing that IT application. We are also seeing some savings from the site accounting function centralization project I discussed last quarter.
For the first quarter this initiative generated savings in site level operating expenses of $246,000, and cost us a $127,000 in SG&A expense. That does not sound like much, but I will point out that by March 31st we were at about only 8% complete with this project, which we expect will generate net annual cost savings of approximately $6.5 million when fully implemented. Our biggest area of opportunity for improvement remains our standalone Convenience Stores. Site level gross margin for our Convenience Store segment decreased this quarter by 8.4%, largely due to the effects of increased competition.
And to provide some color, during the 2018 first quarter, we had 33 Convenience Stores at which there was an additional competitor since the prior year period. Those sites accounted for roughly 62%, 48% and 35% respectively, of the declines for the segment in each of fuel sales volume, non-fuel revenues and gross margin in excess of site level operating expenses. Barry will provide an update on our loyalty program and other efforts being undertaken to improve the performance at our C Store locations and help us better combat the competition.
In summary for both of our operating segments, despite the headwinds associated with new competition and fuel efficiency improvements, we are on track to show increases for this year versus last year in the growth rates for both non-fuel revenues and gross margin in excess of site level operating expense, as well as for consolidated net income and EBITDA.
Finally, as you may know, in April, we obtained a final ruling related to our Comdata litigation, in which we were awarded approximately $10.7 million of litigation costs and related interests that we currently expect to record as a benefit to SG&A expense, and interest income in our second-quarter financial statements. Comdata has paid this amount to us and has until May 9th to appeal the final ruling.
Now, Barry, will provide you some details regarding our operations.
Thanks, Andy and good morning, everybody. We continue to see positive signs from our TravelCenters operations this quarter, strong freight trends compared to the same period last year and our ability to manage fuel sales profitability by balancing volume and pricing, resulted in overall fuel sales volumes that was slightly positive and same site level fuel volumes were only slightly negative, down 0.6% compared to the first quarter last year.
Our efforts to further our fuel marketing program and sell combined services are proving successful. Fuel sales volume for top 10 accounts was up nearly 2% and truck service sales for our top 10 accounts were really strong, increasing by 11% versus the prior year quarter. Travel center volumes trended upward in January and February but were down on March compared to the same month last year. Significant winter storms and the timing of the Easter holiday this year contributed to the March decline. We catch up on the surfeit in April fuel sales volume looked to be up by about 1% over the prior year April.
We're making progress with our efforts to combat fuel efficiency headwinds in the travel center segment through expanding universe of customers to whom we market and to market more deeply to existing customers. Regarding our efforts to market a broader array of our products and services to our existing customers, we gained traction during the quarter. Looking at TA's on-site truck service program, as Andy just mentioned, our work orders are up 44% versus first quarter of 2017. Some highlights from this area are, March was the first month we began operating the standalone facility in Indianapolis to meet demand for mobile maintenance services from existing and new customers in the area.
Work orders almost doubled in March from February each week in March continued to break prior week's sales records. One large fleet and existing TA customer that historically fueled with us and used us to run the truck service has grown to become one of our top 10 largest on-site accounts, while increasing their total truck service purchases from us by 10%. Regarding our commercial tire network, one of our goals when we launched this initiative was to ensure we’re providing the breadth of tire products and services that customers require today because we believe customers look to consolidate their purchases with fewer suppliers wherever possible.
Since our commercial tire network commenced in November 2016, we've operate without the benefit of our own tire retreading capability, a common component of tire dealer businesses. Recently, we identified a tire retread plant that we've agreed to purchase for $2.7 million, and expect to begin operating in the third quarter with an authorized Goodyear retread tire dealer. Accordingly, we will be able to sell, repair and retread tires for a new group of customers who require retreading services. In combination with our extensive existing tire brand and peer options, this retreading plan enables us to provide that one stop-service we've seen appeal to certain existing customers and allow us to engage new customer segments.
Our efforts to expand TA's customer base continue and we're seeing good sales of onsite mobile maintenance solutions to non-traditional customers. In early April, we announced TA's certified used truck and certified used trailer inspection services that provide information to be used for community on the condition of used trucks and trailers available for resale. This program is designed to provide valuable information to truck resellers and buyers who may have little to no knowledge of the condition or health of the equipment. We expect the certification program will help extend our reach into these non-traditional customer channels.
One customer a financing company located in the Midwest specializes in assisting trucking companies with fleet and owner operator financing. This company has engaged us to help them refurbish Class 8 trucks for their customers. Sales to this customer grew significantly during the first quarter. We found ways to help other new customers in the truck dealer market. This quarterly, we were rewarded the inspection service business for the truck sales company from who we expect to perform over 2,500 inspections annually. We’ve entered into agreements with some dealers and finance companies that include maintenance and/or tires and the cost of units sold, and we perform that maintenance and added benefit and this keeps the customer coming to us as these services are not covered at competing repair shops.
Looking at our TA restaurant group, our efforts accommodate changing consumer preferences in the whole service food areas continue. In the first quarter, we have four dining restaurants that were closed due to rebranding or conversions to QSRs. In 2018, we expect 11 in total will be closed for similar reasons during parts of the year. Typically, we’re seeing good results from these rebranding and conversion projects, including average revenue increases of about 10% along with increased profitability. While these efforts are lowering non-fuel sales in the near term, they should enhance profitability over the long-term.
And regarding our Minit Mart standalone convenience stores, we saw a decline in non-fuel revenues at our C-stores versus the prior year quarter. But we were able to generate a similar level of non-fuel gross margin due to our retail pricing management and shifting the mix of our sales towards higher-margin categories, such as prepared foods and carwashes and with less sales lower margin cigarettes. A good bit of the capital investments we made in the C-store since we acquired them has been for projects like the addition of prepared foods and carwashes, and we’re seeing the positive effects of those investments in our operating results.
As Andy mentioned, we will introduce our Minit Mart loyalty program beginning in June. By July all of our Minit Mart branded stores will have loyalty program up and running. We’ve designed our program to have advantages relative to our regional competitors and to compete with the largest convenience store chains programs. In addition, members will receive frequency club offers and we designed the rewards component to encourage more frequent visits into our stores. Importantly, the data collected for loyalty program will enable us to understand much better customer spending behaviors, which we can use to our benefit.
And now, I’ll turn the call over to Bill for his remarks.
Thank you, Barry. Good morning. Before I discuss our results, I’d first wanted to remind you that in the 2018 first quarter, we adopted a new revenue recognition standard, which, among other things, required us to reclassify the discounts related to certain loyalty program awards from non-fuel revenue to fuel revenue. In our financial statements for the first quarter of 2017, we reclassified $12.4 million from non-fuel revenue to fuel revenue, which decreased our fuel gross margin by $0.024 per gallon, but increased our non-fuel gross margin by 110 basis points.
As you may have seen in our press release we filed earlier this morning, to be helpful we included a supplemental schedule that identifies the impact the implementation of this new accounting standard has in our fuel and non-fuel revenues, as well as fuel gross margin cents per gallon and non-fuel gross margin percentage for the years ended 2017 and 2016, as well as by quarter for those years. As a reminder, adopting this new standard affected fuel and non-fuel gross margins, but not the total.
Now, I will take you through the results of our two segments. In our travel center segment, fuel sales volume increased by 1.5 million gallons or 0.3% and same site fuel volumes decreased $2.8 million or 6%, primarily due to a decline in diesel demand due to the continued effects of fuel efficiency gains and increased competition, as well as the result of the inclement weather that occurred during the quarter in certain regions of the United States.
Fuel gross margin increased by $20.5 million, primarily due to the $23.3 million benefit recognized in the 2018 first quarter in connection with the February 2018 retroactive reinstatement for 2017 of the federal biodiesel tax credit. The increase also resulted from newly acquired and developed locations, partially offset by fuel pricing headwinds due to competition and a more favorable fuel purchasing environment in the first quarter of 2017 than was the case during the 2018 first quarter.
Non-fuel revenues in our travel centers grew by 5.1%, primarily due to a 3.9% increase on a same site basis that was led by our truck service and parking programs. The increase was lessened by decrease in foodservice revenue that resulted from a reduction in operating hours at certain restaurants. Reduction in operating hours, or in some cases closures of certain restaurants, was a conscious effort to increase profitability as the cost to operate certain of these restaurants during the applicable hours did not exceed the gross margin they generated.
Non-fuel gross margin percentage was 61.8% compared to 61% in the 2017 first quarter. Of the $15.4 million increase in non-fuel gross margin this quarter, truck service contributed $6 million, largely attributable to the business expansion program Barry described earlier. Site level gross margin in excess of site level operating expenses increased by $31.5 million or 34.1% in the 2018 first quarter, of which $23.3 million relates to the biodiesel credit and the remainder is due to new sites and an increase at same sites.
In the Convenience Store segment, fuel sales volumes decreased by 1 million gallons or 1.8%, primarily due to increased competition as Andy noted a moment ago. Fuel gross margin decreased by $100,000 or 0.9%, primarily as a result of the decline in fuel sales volume. Non-fuel revenues decreased by $2.3 million or 3.8% in the 2018 first quarter as compared to the 2017 first quarter, primarily due to increased competition.
Non-fuel gross margin was essentially unchanged in the 2018 first quarter despite the decrease in non-fuel revenue due to a higher non-fuel gross margin percentage. Non-fuel gross margin as a percentage of non-fuel revenues was 36.1% in the 2018 first quarter as compared to 34.8% in the 2017 first quarter. The increase in non-fuel gross margin percentage was due to a favorable change in the mix of products sold as Barry mentioned earlier.
Site level gross margin in excess of site level operating expenses decreased in the 2018 first quarter by about $500,000 or 8.4% as compared to the 2017 first quarter, primarily due to an increase in site level operating expenses that largely resulted from the write-off of certain obsolete inventory. From a consolidated perspective, we had a net loss of $10.1 million or $0.25 per share compared to a net loss of $29.4 million or $0.74 per share. Impacting the results for the first quarter were certain one-time items, such as the $23.3 million federal biodiesel tax credit I previously mentioned, incremental share based compensation expense that is tied to executive officer retirements and Comdata legal expenses totaling $78,000, which when combined and excluded, resulted in an adjusted net loss of $26.8 million.
Adjusted EBITDA decreased by $583,000 in the 2018 first quarter, primarily due to $2.8 million increase in real estate rent expense and $2.2 million increase in selling, general and administrative expenses, partially offset by $6 million increase in site level gross margin in excess of site level operating expenses.
Selling and general administrative costs, excluding unusual items in both periods, were $2.2 million higher due to increased compensation expense, partially offset by certain cost saving initiatives. Depreciation expense, excluding unusual items in both periods, increased by $1 million due to our investments in locations we’ve acquired and other capital investments. Real estate rent expense increased $2.8 million in the first quarter of 2018 compared to the 2017 first quarter, primarily due to the sale leaseback of one newly developed travel center and improvements to other lease sites throughout the year.
Turning to our liquidity and investment matters, at March 31st, our cash balance was $52.1 million. We currently have approximately $120 million available under our revolving credit facility. We own 30 travel centers, a 198 standalone Convenience Stores and six standalone restaurants that are unencumbered by debt. During the quarter, we invested $24.9 million of capital expenditures and sold $13.1 million of site improvements to HPT. Our 2018 capital investment plan contemplates approximately $150 million of capital expenditures, which includes approximately $55 million of sustaining capital investments at our existing locations and the sale leaseback of approximately $50 million of site improvements to HPT.
That concludes our prepared remarks. Operator, we are now ready to take questions.
Thank you. We will now begin the question-and-answer session [Operator Instructions]. And the first question comes from Bryan Maher from B. Riley FBR. Please go ahead.
A couple questions. You didn't talk much on the prepared comments regarding TA's growth of travel centers on a go forward basis. Can you discuss what you're thinking about there as it relates to new bills, acquisitions and franchising?
Bryan, I guess one of the reasons that we didn’t say much there is that right now we don't have any solid plans with board approval and parties on the other side of the plan, if you will. The management team here, we've been focused since taking over shop around here, on growth exactly what you said and are considering all those avenues of growth; acquiring new travel centers, franchising travel centers and potentially also developing new build travel centers.
We've been continuing those plans and getting ourselves ready to hit the ground on the implementation of those plans. But right now have no specific plan or targets or acquisition targets those things. And I'm hopeful that we're having the same call in the next quarter. We will have more to tell the world about implementation of those plans.
And then next on the labor costs, it seems like if you read between the lines of the press release and maybe even not so much reading between the lines, that is a factor your on-site level operating expense. Can you tell us how impactful it is and what really you're doing to address that?
I think that while it's true that there is some -- I mean you can't have lot of things going on in different states with the increases in minimum wage, rates and the continuing costs of things like medical insurance and things like that that all add up from a labor perspective, that's been part of our lives forever. And we try to manage to be as efficient as we possibly can. I think one of the things we need to keep in mind is the site level operating expenses don't really, and maybe this is different than other retailers that the other folks follow or watch or whatever. But there's a higher degree of maybe direct variability between our level of non-fuel sales, and the level of site level operating expenses.
For example, if we increase sales in our, say truck service department, by $10 million just to pick a number. We're going to see an increase in labor costs, because somebody's got to be turning the wrenches to replace both tires and oil and make those on-site runs and all that stuff. And in a similar situation in the food service certainly more so in the whole service restaurants than in the quick service restaurants. But you have sort of a high degree of variability, not direct, not a 100%, because you've got one manager no matter how much you sell.
And for that reason is why we see as we’re growing non-fuel sales, we'll see an improvement in that ratio is that we refer to internally and talk about in our comments. The ratio of the of site level operating expenses as a percentage of the non-fuel sales, it’s a measure we use internally for that thing. And there is seasonality in our business. So it's hard to know exactly maybe what to expect for that percentage. But I think if you look at the prior years, you can get a sense of how that percentage rises and falls seasonally.
And hopefully, what we’ll see going forward is to the extent that say in the first quarter, we had an improvement of 90 basis points, that we’ll have a similar improvement over the prior year percentage share for the second quarter, even though that percentage might look very different quarter-to-quarter because of the seasonality. So somewhere in there was the answer to your question.
I will go back and look at the transcript for that, thanks. Just lastly on the C-Store business, I would have to characterize at least from restate the results for the first quarter is being underwhelming. And I know you're making some inroads there, but the numbers are the numbers. What do you have to see in the next couple of quarters to make you decide you want to stick with this versus possibly divest it?
I think that -- I don't have a bright line in my mind. We know that there are a number of things going on out there is just competitively, things that we're doing internally like the loyalty program we’ve talked about a bit, other improvements that we've made in those sites where we’re seeing some of the fruit from that, like the -- Barry talked about with the carwashes and some of the prepared food offerings at sites that hadn’t had them before. So you have difference there. So we expect to see from all those different investments, if you will, that we've made improvement.
And I think we need to see what that is, get a take on how well those things are going and then move forward from there. Taking into account all the other factors that go into play about is competition in the areas where we’re operating, continuing to become more fierce, is it leveling off, how are we faring and what's otherwise going on in the in the C-Store Market. So I think that during the second quarter here, we’ll get another update, if you will, on that improvement.
Unfortunately, the way that timing goes probably when we have this next call for the second quarter, we will have just had the biggest new tool, the loyalty program in place for maybe a month or something like that. So we may have some sense but may not yet be conclusive as to what way that that's directing us. But if that works then fantastic and if it doesn't work the way we feel it needs to then we’ll consider the other options.
And the next question comes from Alvin Concepcion from Citigroup.
It’s Garrett on for Alvin, thanks for taking the question. Just wondering if you could touch on the competitive environment you’re seeing across those segments and maybe if that’s picked-up in 1Q relative to what you saw in 4Q?
I think that’s the competitive environment, and Barry can add some comments here if I don’t touch on everything he might otherwise tell you. Really not a significant change from the fourth quarter, both in the travel center segment and in the C-store segment, I think we're continuing to see the same sorts of trends that we saw in the fourth quarter. Having said that, those trends that we have been seeing in the fourth quarter, included the continual increase in the number of entrants into those two businesses the continued consolidation, particularly on the C-store side with, that one.
But in the travel center segment from a, say fuel pricing with both retail and with the fleets, we haven't seen significant change in how each of the competitors are positioning themselves. And we continue to see that same level of competition, if you will, or increased competition with regard to what our travel center competitors are doing. In the truck repair and maintenance side of things, where they've got their offers for repair and roadside assistance and things like that, that they continue to rollout and implement. And we continue to do things that we believe keep them a few steps -- keep us a few steps ahead of them, so no new significant changes in the competitive landscape.
And then lastly just wondering if you can walk us through the cadence of fuel gross margin during 1Q and that maybe also add what you're seeing and in April so far, relative to 1Q and also on a year-over-year basis?
I think that -- I mean there is -- the general concepts remain the same in times of declining, I'll refer to them as wholesale fuel prices. Our opportunity to make a better margin per gallon increases. And in times of increasing wholesale fuel prices, the opposite is true. We have a little more pressure on the ability to make the margin per gallon. And in Bill's comments, he referred to a better environment last year than this year, and that was exactly that. Last year was more of a downward trend for more parts of the quarter than was the case this year when it was more flat or a little -- maybe a slightly bit up, but better environment last year and that has some effect. Exactly how much effect is always hard to nail down but some effect, and so that's going to remain the case.
The other thing that's going to have some effect on our fuel margin per gallon, results from this -- Bill talked about in his comments, the adoption of the new revenue recognition standard and how that affected where in our income statement these discounts related to the loyalty program fall, and how it affected the prior year amounts, we’ve previously reported and now have restated. And I think that was about -- and the information is in the press release, but maybe a $0.0207 per gallon adjustment to what we had previously said, our first quarter 2017 fuel margin per gallon was. Well that same number in the first quarter this year, although we hadn’t previously reported this year’s numbers. It was -- those discounts had $0.405 per gallon roughly affect.
And I think that the point to be made is we are going to see a little bit of volatility, or potentially see volatility in our fuel margin per gallon going forward under this new revenue recognition accounting, just because of the way that accounting works, in the way that you have to -- and I don’t want to bog the call down in GAAP accounting lecture or anything like that. But the relative values of a gallon of fuel versus the loyalty awards like a shower and the loyalty points and whatever else we may add to that program in the future, all has to be taking into account in the calculation of where the revenue is recorded or if you will, where the discounts fall.
And so as fuel prices rise or fall, as what we charge for a shower increases or falls, as the values of the loyalty awards change from period-to-period potentially, all of that goes into the calculation of fuel revenue versus non-fuel revenue. And we could see some extra volatility in our fuel margin per gallon on top of just the volatility we’ve historically had as a result of just the markets, if you will. But for the second quarter so far, and we’re still in the midst of closing out April and with this new revenue recognition accounting, there’s more calculations to be done. So we don't know for sure. But right now, there's no reason to believe that things are usually different from what we saw in last year's second quarter.
And the next question comes from Ben Brownlow from Raymond James. Please go ahead.
Good morning. And thanks for all the additional financial disclosure, I think that’s helpful. On the loyalty program roll-outs in June, can you just talk about the anticipated ramp, the timing around customer awareness of that program, just some insight there please?
I am not sure how long it’s going to take to make everybody aware of this. We know it's been a missing component because we’ve been relying on the gas brands loyalty program to sustain us, while we get this done. But we do believe it’s going to be well received. We do have a marketing campaign out to get this going. I would certainly like to think -- I don’t know within a quarter, we would certainly have made everybody aware of this and see this thing ramping significantly at that time. And give customers a chance to decide do they want to come off the gas brand and go to the Minit Mart loyalty program, which I think they’re going to.
And you touched on the cadence for the quarter around the same store sales trends. And sounds like March mid-quarter was impacted by the winter storms. Can you go back over what the same store sales trends were in April?
I don't think we're seeing anything real different in April from what we saw for the quarter in our non-fuel sales. On the fuel side, I think Barry mentioned maybe in the call, we saw April looking like it was up about a percent.
In fuel, and in the travel center side, that's correct. I think the Easter effect probably gives a little more benefit to the C-stores. When the holiday occurs, there's a lot more highway travel so they might not see the same lift in April that the travel center segment is but they washed each other out, the months.
And this concludes our question-and-answer session. I would like to turn the conference back to Mr. Andy Rebholz for any closing remarks.
Thanks Cory. And again, I want to thank everyone for joining us today and for your interest in TA. Thanks.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.