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, Miss. Kristin Brown. Please go ahead.

Thank you. Good morning, everyone. We will begin today’s call with remarks from TA’s Chief Executive Officer, Jon Pertchik, followed by Chief Financial Officer, Peter Crage; and President, Barry Richards for our analyst Q&A. 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 04, 2021. 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.

Thanks, Kristin. Good morning, everyone and thank you for your continuing interest in TA. While COVID-19 continues to adversely impact our full service restaurants and gasoline volumes, we have had a successful quarter with significant financial improvement. For the first quarter of 2021, compared to the prior year quarter, we produced the following, a 58% improvement in adjusted net loss, a 107% increase in adjusted EBITDA, in other words, we more than doubled adjusted EBITDA, and a nearly 20% increase in adjusted EBITDAR are a key metric in measuring our results. This improvement versus the prior year quarter was driven by solid performance from our fuel and nearly every non-fuel business and our focus on managing costs offset by COVID related decreases in four wheel traffic and then our full service restaurants. On the fuel side of the business, our overall fuel volume increased 11.2% driven by a 13.6% increase in diesel fuel volume. Due to an increase in trucking activity, the addition of new fleet customers and overall increased volume from existing customers due to the early success of a variety of initiatives. Gasoline volumes have continued to be adversely impacted by COVID. Also, as we previously noted, we began the quarter facing diesel margin headwinds. However, those challenges dissipated midway through the quarter.

Thank you, Jon and good morning, everyone. As Jon mentioned, we are very pleased with our results in the first quarter, particularly given the ongoing challenges presented by the pandemic, as well as some business disruption in Texas due to severe winter weather in February. In my remarks that follows, I will be referring to the 2021 first quarter as compared to the 2020 first quarter unless stated otherwise. For the quarter, we improved our net loss by $12.8 million or 69% to $5.7 million or $0.40 per share, compared to a net loss of $18.5 million or $2.23 per share. Excluding a few one-time items in the prior year quarter as detailed in our earnings release, we generated an adjusted net loss of $5.3 million or $0.37 per share compared to $12.4 million or $1.29 per share and improvement of 58%. EBITDA was $28.6 million an increase of approximately $17.9 million or 167%, while adjusted EBITDA, which reflects two one-time items in the prior year increased $14.8 million or 107%. The increase in EBITDA was primarily due to our continued close management level operating expense and selling general and administrative expense and positive non-fuel gross margin, partially offset by a decline in fuel gross margin.

Thank you. We will now begin question-and-answer session. Our first question comes from Paul Lejuez from Citi Bank. Please go ahead.

Hey guys, couple of questions. I’m curious, how much of the sequential improvement in margin per down that you saw was due to market conditions that turn around, that you saw in March, versus just an improvement in your overall buying? Second, cheers if you can give us an update on franchise centers have begun operations over the past year to two years. Just how you are seeing those businesses improve when they come under your wing and then last from the ETA initiative, where do you feel like you are ahead of the curve relative to competitors versus where you are playing catch up?

Thanks, Paul. Thanks for those couple of questions. So I will start in the order you asked. On the question of diesel margin improvement, how much was market versus buying or other initiatives? You know no question market moved and it has come to a more favorable and more normalized place for us as we got through the quarter. Again, it started with some challenges that were fairly historically low actually challenging period between the end of last year and beginning of this year, even when we look back many, many years. So without question a significant part of it is the market returning to more of a normal for us, normal stable kind of normal state for us. But as well as we got to - and we had signaled this earlier, I guess in the third, maybe fourth quarter of last year, we spoke of running an RFP to purchase more to consolidate more of our diesel gallons as we got into this year. And in fact we did so, and on that consolidation roughly 80% of our gallons now we are saving about a penny, a hair over a penny per gallon. Now, when I say saving again, because we rise and flow as the tides and markets arises and flows, that is relative to any moment in time. It doesn’t mean from one week to the next. There was a penny of improvement in, cause it means for that relative to that one moment in time. So that the effect of that starting started to course through our system toward the end of the quarter. So that would, that was a piece of it as well. On the franchise side, we hired through this last through the quarter ended last year, I think or maybe early first quarter a franchise sales role and a function, as opposed to just sort of, you know, signaling out that we are in business here and we are willing to franchise and people more passively coming along. We have been more proactive about that. And I think that is why we are seeing a pace that is picking up to that 22 will open as we get from this year into next year and would that target and excess of authority. And generally speaking the feedback I get from it is relatively early innings still, relatively speaking. We only got into the game a little bit at the end of 2019 and then to last year, but generally speaking the feedback from the franchisees and new franchisees is positive. It is a little early to say to what extent they are - you know, mathematically how successful or not they are for the franchisees, but the fact that we are getting increasing interest and it continues to increase tells me that it is a successful enough for them and for us, it is sort of meeting our expectations. Lastly on ETA and your question about how do we compare to our competitors? You know generally speaking I believe and as everybody knows our primary competitors who are great competitors, there are private companies and family owned businesses historically. So we don’t have terrific visibility, but I believe they have been paying attention to this stuff for a period of time as well. And it is hard to say if we are ahead or behind, but, you know, I like to always think like we are behind just because that motivates us to drive even harder. And it is amazing how we are just scratching the surface on some of the funding opportunities, even as we ended last year before the new administration, and there is a whole universe that exists there and only accelerating. So I don’t feel like we are playing catch up I feel like in a way we are just, we are sort of right at the right time with the new administration, really accelerating all of this stuff and us having already started to put steps in place to embrace it. I feel like we are in a very good spot right now. And hopefully that answers your questions, Paul.

Yes, definitely. Thank you. Good luck.

Thank you.

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

Good morning. And thanks for that commentary so far. A couple of questions from me, and maybe point of clarification on, you touched a little bit about M&A as a topic, and I just want to clarify that if you were to do some M&A that would be only travel centers and if so, who are the sellers in the marketplace today?

So, yes, thanks for that, Bryan. And hi hope you are doing well. Thanks for the question. So you know, we are very, again, I keep using, I want to stick to this terminology and I will be specific and answer your question, we are investing in our asset base, you know, so there is some history about some investments that were maybe not that they were outside of who and what we are as a company. And really we are very focused on, you know on sort of our mission and what we do. And so anything we are going to do has to be sorted down the sweet spot of who we are and what we do and what we do well. And so the focus when we say M&A is without question truck stops and travel centers that are along highways that in, you know, focus on, at least in large part diesel, obviously that will evolve with alternative energy, but along routes that support sort of trucking and that kind of infrastructure, that is what we mean. You know, to some lesser extent, you know, we are paying a lot of attention to more on the JV side and less M&A side, but on alternative energy opportunities, again more JV and partnerships than M&A and we are also, you know, like the trucks in the truck service business, to some extent technology, I’m curious to understand what is out there and we are, we are very interested in sort of seeing what is out there. But it is only going to be things that are not some kind of standalone business that are maybe completely off highway. These will be businesses that are either exactly our business or very, very sort of directly integral to the functioning and success of our business. And that is what I mean.

Okay. And then when we think of the franchise initiative what are those properties currently kind of before they transitioned to being a TA? I’m assuming they are not any loves or pilot flying Js are they predominantly mom and pops and are they predominantly kind of A locations or B plus locations?

So, again, thanks for the question on franchise too. For the most part their independence more likely to put in quotes mom and pops, who are not accessing some of the fleet business who don’t have some of the support and infrastructure that we can provide. And generally speaking, I would say they are B plus and better locations. And so the opportunity to pay effectively a cap make a capital investment with a one-time fee on the front end and then a recurring fee or fees, royalty times of fees they have to conclude, of course. What they are going to get in terms of access, support, and access to other kinds of business that they are not seeing is greater than those fees and people are concluding that. And I think increasingly so, and that is why we are having success.

And then last for me, and I think I saw something on CNBC or just in the last day or two. There continues to be this trucker shortage to the tune of at least 50,000 available positions to be filled. And I think that the industry is working on that. But how much are you seeing in your day-to-day and how much upside is there do you think to your business, if the industry is successful at bringing those people on board?

Again, great question. I know, I still very actively talk to our CEO. CEOs of our biggest customers. And while I won’t name any, I have just recently had some conversations. One in particular is sort of taking a lead on increasing trucker compensation significantly. And it is very significant double digit increase in comp is that is showing signs of success. Again, that is more somewhat robbing from Peter to take from Paul, that doesn’t make for more drivers. But it is a choke point in the business. And I think there is only upside to the extent more truckers are on the road, putting more miles on and are attracted to this business. It is an interesting, longer-term the question and I chat with these CEOs about this is the alternative energy over this next half decade on the heavy duty truck side starts to take hold a little bit. It may be more interesting, the tech universe. For example, the job to work on electric or hydrogen is sort of in quotes more sexy than maybe what diesel, the perception about being a diesel mechanic might have been in the past or a driver as well. So we may, we as an industry looking farther ahead, there may be opportunity to be more attractive and more competitive to draw labor from other places at some of these new technologies are embraced in that that brings some excitement and newness and maybe a younger audience to there as well. So, but I think there is only upside with respect to that.

Okay. Thank you very much.

Thanks Bryan.

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

Thank you. So Jon, my first question has to do with the comment you made talking about the amount of diesel gallons sold and the reasons for your success there, and you cited a couple of different reasons. And if we look at kind of the sequential quarters, the diesel gallons sold, and I understand seasonality could be a factor here. But the amount of diesel gallon sold has been pretty similar 3Q, 2020, 4Q 2020 to 1Q 2021.And you had cited, but of course, up substantially from the year earlier periods in each case, you cited, your ability to take market share through some of the larger fleet customers. And that has been a stated initiative for a while. And, I just wonder if you could kind of you know give us a sense for how much of the success in terms of diesel gallons is attributable to that. And whether you can, whether you expect to continue to do that, how you take market share, as opposed to what you described as kind of the general increase in trucking activity.

So, obviously, thanks for that Jim and hope you are well, you know, one other factor that really played into volumes this season, you know, bad weather generally favors this part of our business, but extremely bad weather like those Texas storms, which we forget about, but that lasted for three or four weeks. And then the ripple effect continued that really actually had a negative effect on us, very significantly in this area. So that 13% growth year, same period year-over-year would probably have been significantly greater if we had not had that pretty extreme weather event that affected, I call it the Texas storm, but it was, it affected much more than Texas. So, you know, we are still growing our fleet and aggregator businesses significantly and you know, the area that we are really focused on now, and partly under this new commercial division under Barry is really driving one very big area of opportunity for us has been to drive sort of call it the small fleet and retail business. And so I think we are going to continue to keep growing our what we have been growing and that is our fleet business. But I think in addition incrementally, we have opportunity to grow significantly our small fleet and retail business. It has just not been a huge area of focus and in the same way that it is, and it needs to be, and it is now, so that is an area of significant focus for Barry and for the team. And I think with this new construct, we are going to have success there.

Okay. Thanks for that. The second question I had is really on the site level operating costs, which, you know, is the biggest cost center for the company and something you have cited before as perhaps an opportunity for savings and efficiency and helping to drive the, that number up. But over the prior four quarters here, this is obviously been a very volatile line item you had furloughed 4,300, I think it was, staff last year. And Peter said in his comments, there are still some of those furloughed people who have not come back. So I guess I’m trying to understand as we think about what should be the run rate here, is that the intention? Well, first of all, I guess, I’m not sure if the or how many of the 4,300 original furloughs have returned, number one, number two, do you expect all of them ultimately to return and then kind of number three, just like the situation that was described, the previous question regarding truck driver comp, we keep hearing that labor costs are coming under pressure everywhere, and it is hard to find staff. So, if you think about site level operating costs as an opportunity for efficiency, you know, how much is there to go here and you know, in particular, if you could address the furlough, how many furloughed staff have not returned?

Great. So thanks Jim, thanks for that. I will turn it to Peter in a second, but I will start, you know, there is no question there was sort of countervailing forces happening here, you know, some lurking potentially in the background, whether it is you know, inflationary forces that may take hold later this year and things that we don’t control of course, and that would trickle down and into labor costs. On the other hand returning people furloughed last year, or it is not on the other hand on the same hand. But on the other hand, we finished some work with some outside consultative help, really doing a deep dive into our site level expenses, and I know mining opportunities there. So how that all sort of offsets one another is really the essence of what you are getting and I will turn it to Peter here in a second. With respect to just one question on the furloughs of 4,300 thereabouts all will not return. We are in a universe of a new normal where we do not have plans to have all of them return. And I’m going to hand it to Peter to get into maybe a little bit more on that. So Peter, if you could maybe start with Jim’s question on the 4,300, if you have the detail, who has returned how many, and some sense of new normal.

Sure. Hi, Jim. The 4,300 whether those returned or would they lasted we brought other employees in. We have about I believe less than a thousand. I don’t have the exact number I can get back to you with it that are still on furlough. But in the restaurant, particularly in the restaurant space, where also as John mentioned, I mentioned in the prepared remarks, we are being very careful about not reopening just because we no longer have a mandate to remain closed. Number one, obviously we have to have an offering at the location a food offering, but we are being very careful. So, we are also making obviously decisions around reopening those locations With respect to run rate, I don’t have an exact number for you even arrange for you. A couple of things are happening. Number one is John mentioned, we brought some consultant help in, and we are looking at ways to create efficiency as revenues ramp. We can see revenues are ramping rapidly. We have been very careful about not getting out over our skis with bringing costs back into the system. So we are beginning to implement some of those opportunities for savings. I think as the year goes on, on a year- over-year basis, it is going to be trickier, right. We made some really significant cuts last year. We improved our flow through obviously what flows through we had. So those are just a few things that I would mention and hopefully that is helpful.

And just one thing to add, Jim, and thanks, Peter. As we just measure ourselves to sort of this should be obvious. But I will just say it as we measure ourselves to last year, we look at a variety of things, we are also looking back two years just because last year to your point is there is so much noise in the year as a result of our reaction to COVID that looking for some kind of recent with stable state. So we looked at 2019 to somewhat measure ourselves just as we operate going forward.

Okay. That is helpful. And then the final question from me in your prepared comments, you may have mention of expanding the biodiesel blended product availability, as well as the DEF availability. So again, two-part question, how many of the centers currently do not have that product available and is there any capital spending for that that is assumed in the one 175 to 200 number that you have talked about?

Thanks, Jim. So, yes, so on that, you have some tight numbers. So on biodiesel, we are adding 16 locations, those dollars are in the queue, they have been approved and released. So 16 locations for biodiesel and 40 locations for DEF at the pump. We sell DEF in these big boxes at the retail stores. But when you put DEF in your vehicle, when a trucker does not being able to pump it at the same time as the diesel is very inconvenient. And these big gallons, five gallon jug thing for pouring is I think the sales of those are affected dramatically compared to when you can pull up at the lane and pump it. So of those 40 locations we are adding DEF, which by the way DEF is significant margin. We are adding 173 lanes and so those dollars, the order of magnitude of these dollars, I will just give you a rough range for combined bio-diesel in DEF is about 15 to 20 million we will spend over the course of this year.

Okay. Terrific, thanks Jon.

Thanks. Thanks for the questions Jim.

Next question comes from Chris Sakai from Singular Research. Please go ahead.

Hi, good morning. Just had a question I guess, on the restaurant segment, I wanted to get a sense, as far as - as the vaccinations in the U.S. increase, are you guys seeing an uptick in restaurants?

We, so thanks, Chris and good morning. You know, what I look at this week over week and I look at sales numbers and also I request for approval to come to me if we want to reopen, there has been a, it is not been sort of an abrupt moment where, you know, one month or one week something spiked, but there has been a slow, but progressive improvement in that area. Again, talking sales, which is the litmus test for the question you are asking, and I think that is going to continue. And it is going to be interesting to see what the summer brings, you know, as you are hearing and even the most, you know, maybe most closed environments like a New York City. Not that we have a lot of travel centers in New York City, but just as an example, when you hear the mayor and governor of that city in that state saying New York city is opening up in July. You can imagine what those kinds of facts is that happens around the country are likely to mean for our movement of diesel, and movement of trucks, as well as movement of gasoline, which gasoline still is materially down in the same way the restaurants are down. So it is going to be an interesting summer as we, as, as some of these local governments start making these proclamations. And I think, yes, it is fair to say we are seeing a progressive improvement and the restaurant side is back. I think it is fair to assume that it relates to vaccination rates and people getting vaccinated.

Okay, great. And then I guess the question on the lines of the IHOP, how is that going?

So you know, we have a commitment with IHOP to do a certain number and we will absolutely honor that commitment, we are right now in the process of building out five and we are monitoring and I really want to get this right. We really have, you know, in a strange way, COVID gave us an odd opportunity to understand this most labor intensive part of our business. And I just want to make sure across the portfolio of 160 plus full service restaurants, that we really get it right. And as I said, in my remarks, it is not going to be a one size fits all. We are not going to be a travel center company that has, you know, only IHOPs or only, you know something else. It is very likely that we are likely, I think in the end to have a number of brands, including IHOPs, that we are offering potentially as well as some performing a self-performing owned company owned on name brands that we will develop. And then lastly, we are also in the process of exploring and I have mentioned this historically too, but we made progress here in exploring a landlord execution where effectively we lease space, that leasing could be to a IHOP operator where yes, it is a IHOP coming in, but it is not us as the operator. And it could be another brand. So those are the various things we are continuing to march forward along. And, but so far the IHOPs are doing well in terms of the construction and getting them sort of prepared and ready to open. And we are actually doing better than what we budgeted in CapEx for those as well.

Okay, great. Thanks.

Thanks Chris.

The next question is a follow-up from Bryan Maher from B. Riley FBR. Please go ahead.

Great, thanks. And that was some really good color on the restaurant. So thanks for that. So just on follow-up from me. On the fuel margins and admittedly, there has been these headwind in the latter part of the fourth quarter in the early part of the first quarter. But do you guys have a targeted kind of fuel margin in mind that would include the biodiesel fuel credit? That is kind of part one. And part two, have you found that there is kind of a real advantage to buying in bulk or I think when I covered this company years ago, they would talk about how they would only kind of have one to three days worth of fuel and inventory more of a spot market buying. Can you talk about kind of the puts and takes of your thought process on the fuel margins regarding those two things?

Sure. Thanks, Bryan . So first on sort of without the biodiesel tax credit my view, my sort of sense historically this sort of a healthy level of margin for diesel not combined is in that 14, 15 range. And anything we can do incrementally is a positive, and that is what we are very focused on separately. But to maintain levels like that overtime, we also have to address those windows where we have like an historically low at the end of last year, early this first quarter where, because of market volatility it significantly reduces significantly below that. And so we are very focused on that volatility question. And, there is a sort of a spectrum of approaches to addressing it. And a couple of examples, I think I mentioned indirectly, I will be a little more specific or increasing our capacity to hold inventory. So we can buy when it is low and have more capacity to hold longer from when it changes. And so that is something we are really diving into and understanding. And then separately on the far end of the needle, the other end of the spectrum is trading and hedging, and trading and hedging is something that is fairly sophisticated. It is something our competitors do very, very actively. And I think frankly, they do very well. It is not something that is necessarily contributes to more margin, it is something that gives more certainty and a narrower bandwidth of the highs and the lows. And so that is something we are also exploring too, when we want to be really smart on before we just dive into that pool. And so those are two. And then, part of that is universe with this new division is really owning all things diesel margins. So there is no lateral finger pointing well different people on different parts of what contributes to that hole and now all rests in one place. And I think that alone that just organizational change is going to be very significant toward us approaching some theoretically more optimized level of margin. When buying in bulk, what I mean by that, when I say that we can still cancel loads and we have the ability to buy sort of intro reenter regionally, but we make commitments over a period of time to a certain total volume and we are buying to an index. And so when I say we are saving that penny times 80% that is an indexed thing. And that is why for any moment in time we realized the savings, but from one moment to the next it changes and I’m definitely have a strong belief that what we are doing now will create some advantage. And already, I think in is to some extent, hope that answers your questions.

Okay, thanks for taking my questions. Thank you.

Great. Thanks Bryan.

The next question is a follow-up from Jim Sullivan from BTIG. Please go ahead.

Thanks. Jon, in your comments earlier to an earlier question about M&A you stress that, you know, to the extent the company or to you know, acquire the truck centers, they would be the, you mentioned company-owned truck centers as opposed to leased truck centers and you know, elsewhere and I think in your filings, you have indicated that the practice that the company used to do where, CapEx spend at the sites would typically be, you would be reimbursed by service properties, and the rent would adjust. But you are not expecting to do that anymore. So I guess the question I have is that, you know, current focus on the company investing its capital in either buying new centers or expanding them or spending the CapEx, is that the kind of a shift in the long-term strategy for the company or is it you know on the other hand, simply a result of the, you know, kind of the lack of liquidity that service centers currently face. I mean, they do have a covenant waiver agreement in place and they have had their own issues with the hotel business, as we know. So what is the driver of that change in strategy?

I mean, you know, in the end, the first instance is we are trying to just correct the company, right. Just sort of the blocking and tackling that is last year that we are planning and preparation, as I said, you know, this is your growth, right. And investing in growth. Ultimately in the long run in my interpretation, my mind would provide long-term shareholder value. We have got to have this company running efficiently and we need to be a growth engine. And, you know, things like alternative energy creates certain opportunities to grow. And I’m really excited about that stuff, but more to your question, you know the financing and effect of leasehold improvements is expensive. And so it is, I think it is fair to say, it is a shift in strategy since I have been here and we are going to grow through franchise because it is incredibly capital efficient and that is great, and it is low hanging fruit. And it is a very simple value proposition. I shared earlier where you know, all the an independent needs to conclude is that access to fleet and other support that we provide is greater than the royalties, the fees, and people were concluding that. So that is sort of low-hanging fruit way of growth. It is relatively easy. It is not that intensive on, you know, in terms of the energy necessary for the organization to support it. It is highly scalable. And, you know, as you grow, and if we do 30 to 40 a year and sustain that, so much is just adding to the bottom line and just, you know, and just compounding overtime. At the same time owning new stores and new locations is obviously much more contributive if that is a word, it, it contributes a lot more to the bottom line and obviously takes more intensity. And so I like the sort of combined approach where we can to some extent potentially maybe cherry pick some opportunities we see to own, to the extent we can have a transformational bolt on acquisition. You know, at my last company, I know I mentioned it was a low price point, extended hotel chain within a month, or two of getting to that company we bought a four-pack, I think it was. And then we bought a 50 pack about six months later. I’m not suggesting that will be here, that will exist today. But on the other hand my highest level sort of thesis here for opportunities to own is that there is a lot of fear out there and for the smaller folks that don’t have the infrastructure and scale. The threat of alternative energy is more of a threat than an opportunity. It is an opportunity for us, it is a threat to the smaller guys in my mind. And I think there is some fear, and maybe to some extent if you are a smaller more independent well-founded fear. And so, I think there may be opportunities because of that and also the timing that this business became a business post World War II and into the 60s and 70s, the proliferation of the travel center business as an industry. Generationally, folks that were getting into this business in the 60s and 70s are aging and they may not have family members who were necessarily dialed into this or that combined with the threat and fears about changes in the industry and alternative energy. I think some of those are sort of secular dynamics create an opportunity for us. And so, we will see how that theory plays out, but we are with respect to the company owned. But we are very focused on it through M&A. Hopefully that addresses your different parts of your question.

Yes, it does. I appreciate it. Thanks, Jon.

Great. Thanks Jim.

There are no more questions in the queue, and this has concluded. This concludes our question-and-answer session. I would like to turn the conference back over to Jon Pertchik for closing remarks.

Thank you, Jason. Again, thank you for your interest in TA and your attention this morning. Everybody have a great day. See you guys. Bye-bye.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.