TravelCenters of America Inc.
Q2 2021 Earnings Call Transcript

Published: 3 Aug 2021

[Operator:]

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.

[Kristin Brown:]

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 today's present beliefs and expectations as of today, August 3, 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. 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, or SEC, that are available free of charge at the SEC's website or by referring to the Investor Relations section of TA's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. During this call, we will be discussing non-GAAP financial measures, including adjusted net income, EBITDA, EBITDAR, adjusted EBITDA, adjusted EBITDAR and adjusted fuel gross margin. The reconciliations of these non-GAAP measures to the most comparable GAAP amounts are available in our press release and on a schedule of our non-GAAP financial measures that can be found on the Events section of our website. The financial and operating measures implied and/or stated on today's call as well as any qualitative comments regarding performance should be assumed to be in regard to the second quarter of 2021 as compared to the second quarter of 2020, unless otherwise stated. Finally, I would like to remind you that the recording and retransmission of today's conference call is prohibited without the prior written consent of TA. And with that, Jon, I'll turn it over to you.

[Jonathan Pertchik:]

Thanks, Kristin. Good morning, everyone, and thank you for your continuing interest in TA. Our second quarter 2021 results reflect a breakthrough moment in TA's history as a transformation plan that originated 15 months ago has demonstrated meaningful financial and operating improvements, driven by broad-based initiatives across all business lines, all of which have contributed to these impactful results. For the second quarter of 2021 compared to the prior year quarter, we produced the following

[Peter Crage:]

Thank you, Jon, and good morning, everyone. As Jon mentioned, we are very pleased with our results in the second quarter, which we believe are beginning to demonstrate the impact of our initiatives on our operating results and our longer-term ability to generate strong free cash flow. In my remarks to follow, I'll be referring to the 2021 second quarter as compared to the 2020 second quarter unless otherwise noted. For the 2021 second quarter, we improved our net income by $26.8 to $28.9 million or $2.02 per share compared to net income of $2.1 million or $0.26 per share. Excluding a few onetime items as detailed in our earnings release, we generated an adjusted net income of $29.7 million or $2.08 per share compared to $10.7 million or $1.29 per share, an improvement of over 175%. EBITDA was $72.6 million, an increase of approximately $34 million or 87%, while adjusted EBITDA, which reflects several onetime items in both periods, increased $27.7 million or 61%. The increase in EBITDA was due to the positive performance we generated in both fuel and nonfuel gross margin as well as our continued close management of operating and SG&A expenses. Fuel gross margin increased $8.4 to $100.3 million or 9.1%. Our fuel sales volume increased by 107.4 million gallons or 22.6% to 584 million gallons, with diesel sales volume improving by 21.2%, driven by increased trucking activity in the quarter and new customers. Gasoline sales volume improved by 33% as 4-wheel traffic returns to the roads. Margin cents per gallon improved sequentially, but decreased 10.9% year-over-year as a result of a more favorable purchasing environment and relatively higher volume of street diesel sales in the prior year quarter. Nonfuel revenues increased by $96.2 million or 23.7%, and total nonfuel gross margin increased by $60.5 million or 24.9%. Importantly, when compared to the 2019 second quarter, both nonfuel revenues and gross margin improved by roughly 5%, with significant top line improvement in-store and retail services, truck service and diesel exhaust fluid, offset by full service restaurants, approximately 50 of which remain closed. Performance at our quick service restaurants has been consistent, although some locations are operating with reduced hours due to labor availability. Site level operating expenses increased by $36.5 million or 18.5%, which reflects increased labor and other operating expenses as employees who have been furloughed in response to the pandemic returned to support the restaurants reopening and overall increased business activity. On a net basis, after these well controlled cost increases, we contributed $24 million in nonfuel net margin in the second quarter compared to the prior year. SG&A expense for the quarter decreased by $1.4 million or 3.6% and $3 million or 7.5% from the 2019 second quarter, primarily as a result of the effect of last year's reorganization and the impact of some open positions during the quarter, partially offset by increases in consultant fees to assist with identifying and implementing cost reduction and other opportunities as well as increases related to the addition of key leadership positions and lastly, our adoption of more efficient cloud-based technology solutions. It's important to note that we are rationalizing costs and investing in opportunities where outsized upside is evident. Depreciation and amortization expense decreased by $4.1 million or 14.6% in the quarter, primarily due to several onetime items in the prior year quarter, including the following

[Operator:]

. The first question today will come from Bryan Maher with B. Riley FBR.

[Bryan Maher:]

Congratulations on those really impressive numbers for the quarter. Great job.

[Jonathan Pertchik:]

Brian, thanks.

[Bryan Maher:]

So let's start off with the supply and labor issues related to CapEx. I mean, labor is self-explanatory, but what type of supplies are hindering the CapEx moving forward specifically? And when do you think that, that backlog will be alleviated?

[Jonathan Pertchik:]

First, so on the supply side, it depends on the nature of the project. Obviously, everything from flooring materials. I mean, as we're getting our site refreshes going as just one significant example, the time it takes -- we will use our scale to purchase flooring so that we can, again, enjoy the benefit of the best costing. To do so, it requires commitments to purchasing that flooring and the supply chain has disrupted, the ability to get certain kinds of flooring materials. It's just one illustration. Whether it's computer hardware stuff, chips and then on the labor side, which overlaps, some of them both on like the IT side, some of the consultative help we need, some of the outsourced labor help we need. On the construction side, the labor side, just literally having the labor and the sufficient amounts to execute on the things we need to do again, using the site refreshes. As an example, it's sort of all across the board, Brian. But those are -- that's a peppering of a few examples. One other thing, once we get scaling, as we commit to say, again, running with my flooring example, we will have the flooring necessary to really execute. And that's why I think we're going to be able to do a little bit of a catch-up. It's just within this window. Obviously, we look at things quarter-by-quarter and year-over-year. Within our window of this year, I'm not sure we'll catch up in time to get to the levels we had hoped for before, and some of that will carry over. But I think as we scale, we will be in a position to execute better and faster, almost regardless of what happens externally to the economy and the supply chain more generally.

[Bryan Maher:]

Great. Now that you've been in the role for 1.5 years. And as we think about CapEx going forward, after you get through with kind of the big stuff you want to do initially, do you -- have you formulated thoughts as to what kind of that run rate CapEx would be once the initiatives are done?

[Jonathan Pertchik:]

I think, yes. I mean, I think -- so I think what we've been communicating, and I still think we continue to sort of validate our minds. As you know, it's about $60 million of kind of regular day-to-day CapEx and another $30 million for sort of growth and other stuff. So we think about a little bit below $100 millions is the run rate, $85 million to $100 million in that range. And that's somewhat separate from as we look hard at M&A in the short term and frankly, hopefully, that in the long run, there's an opportunity that continues. M&A would be beyond that. So the sort of regular CapEx, remedial, brake fix and a little bit of growth and other gets us to sub-$100 million, call it, $90 million is our target, and we feel pretty good about that.

[Bryan Maher:]

Great. And can we move to M&A for a minute? I mean, can you drill down a little bit on what you're looking at? Is it really specifically more travel centers? How deep is that market? What does pricing look like? And/or is there something else you're contemplating?

[Jonathan Pertchik:]

Sure. The primary -- I wouldn't say singular, but the primary focus by far is other sites of existing operators who, for one reason or another, they don't access the large fleet business that we and our direct big competitors do and don't perform at certain levels, two fears related to alternative energy and the ability to have the CapEx or otherwise to execute on those? And just more generally, the fears are surrounding those. And then lastly, generationally, if you look at this business and historically, it really started after world War II and really got going in the '60s and '70s, a lot of folks who started these businesses and were successful in sort of those '60, '70s, maybe into early '80s, generationally are at a place that may be opportune for us. So that's the primary focus. And we're really starting to unearth opportunities. It's going to take some time, like all M&A to actually execute. But we are unearthing a pretty good amount of -- a good number of opportunities, i.e. sites in 1g, 2g, small packs and even one-offs. So that's the primary focus. And anything we do beyond that, we're very keenly aware and focused on some of the history of the company and the Minit Marts, and we're not going to do things that are just not directly accretive and strategic and benefit the actual -- the essence of what we do and that's the travel center business. So there are other things that I think are core to us that we're keenly focused on as well. But the singular top priority, there are others, as I mentioned, are additional travel centers in good locations where we see opportunity and upside to rolling them into our system and realizing some efficiencies there as well as accessing then fleet business that may not otherwise be accessed at those sites.

[Bryan Maher:]

Great. And just last for me on the fuel margins. It's been about a year since you really got your hands dirty in that. There was a couple of quarters in the $0.14 range that I was a little missed at, pretty impressed with the $0.17. As you went through the past 3, 4, 5 months, have you gravitated towards a range of fuel margin in cents per gallon that you think we should be thinking about for modeling purposes?

[Jonathan Pertchik:]

I still -- what I think one of the biggest takeaways, as I've learned about our business here is the resilience. I go back to the beginning of this year, and we talked about headwinds at the very end of last year into early Q1. And what I've come to learn and realize, and we've even studied this going back about 10 years with some really, really unusual exceptions. We tend to self adjust within a given quarter, even where we had extraordinarily low-margin for market or other external reasons. And so that's 1 point of takeaways. Just there is a resilience in that part of the business. And frankly, as we strengthen the other parts of our business, the way these size of the business kind of feed each other, it just even reinforces the resilience. So there's both resilience within diesel margin. And then there's resilience more broadly across the businesses. And so I'm -- that was something I was really, really focused on as even concerning as we ended last year. And I'm certainly equally as focused on it, but less concerned because of that resilience we've seen, both again, intro within diesel margin and then more broadly. And with that, I mean, I still come back to this range. And there should be upside on this, but I still come back to this 14% to 16% range. If we can execute and do all the things we're just starting to show, we can do and prove out. And we remain in that range throughout the quarter, where the quarter averages in that realm, not at any given moment through the quarter. We can generate, I believe, a boatload of cash flow. And so while there could and should be maybe upside over time to that range, I'm comfortable if we end in that range at any given quarter, the success we can have is pretty significant and a lot more runway in front of us than even what we've seen just this past quarter.

[Bryan Maher:]

Thank you very much.

[Jonathan Pertchik:]

Thanks, Brian. I appreciate the questions, and you're here today.

[Operator:]

Next question today will come from Paul Lejuez with Citi Group.

[Paul Lejuez:]

This is Brandon Cheatham on for Paul. Just to want to dig in on the fuel margin per gallon there, a little bit more. I was wondering if we could talk about like how much of the sequential improvement was due to mix or market sources versus the work you've done internally with your fuel buying program and some of your fleet agreements.

[Jonathan Pertchik:]

So it's a confluence of pretty much everything you said to some extent. But what is actually not a confluence of actually one item to pull out. It is not a consequence of mix. We continue to pull and increase our big fleet volumes, which is a relatively lower margin than, say, the smaller independents. And so we still have a real opportunity there, and that's small. And frankly, everybody pursues that, but we've really been under resourced in how we pursue the smaller fleet stuff. So there's a real opportunity there. So it was not a consequence of mix. Mix, if anything, hurt us relatively speaking. So that's one. It is a part of almost everything else you said, a favorable market at times, although not overly exuberant, but a favorable, generally speaking, a healthy market. I'd say, partly buying and partly relooking at some -- as you mentioned, alluded to, looking at some of our fleet agreements, particularly the ones that were not all that favorable, really getting better. We still have a lot of work to do here, getting better at understanding what the nonfuel contribution is from a large fleet. We've never really had good visibility at that to that. We're getting better. We still have a lot of upside there in terms of getting even better visibility to that contribution from a big fleet to nonfuel. So there's still a lot of opportunity there. But some of the upside has been rethinking and recasting our -- some of the less favorable relationships, economically. So it's a little bit of most of the things you said, excluding mix, which once again actually hurt us because we grew too disproportionately the large fleet, which is the lower margin relative to any growth in the small fleet stuff. So that really brought them out the other direction.

[Paul Lejuez:]

That's helpful. And with the 50 restaurants that remain closed, what is your outlook for these locations? Are some of them looking to reopen, but there might be like labor shortages? Or are you kind of rethinking those locations as we move forward?

[Peter Crage:]

So in my remarks, I try to highlight this for me, a new learning and maybe for the company, and that is, first and foremost, more fundamentally the restaurants broadly can be a profit center. I really had a significant question mark as we got through the pandemic last year into early this year. To what extent the rest -- the full service restaurants, ever really made money. And I'm not so sure the answer to that question exactly. What's more important is going forward. I'm highly confident as a group, the full-service restaurants can be successful, both as something that is absolutely central to our brand and who we are and how drivers see us. And because they're a great amenity and important to drivers as well as motors, but also they can be a profit center. So that's point one. In terms of why we haven't opened certain ones, it's a function of demand as we see it coming out of the pandemic. There's still areas where demand is -- we measure as low, even if we're allowed to reopen. It's not so much a labor or even supply chain issue as to why those are maybe contextually, contextual factors, but we're very, very focused on now these -- a couple of new concepts. So we are opening 5 IHOPS. They're likely to be more of the IHOPs to continue to open -- will open this year. And then we have 2 other concepts, which I'm not optimistic. I believe we'll be able to announce toward the end of this year that we will likely open in certain locations that I think have tremendous upside. That doesn't mean that every single full-service restaurant will open. I wouldn't say that at this point. Ever potentially, there may be possibilities where we convert a full FSR to 2 QSRS, quick service restaurants, Popeyes and I don't know, Burger King or something. And we still have some work to do there. But more fundamentally, these are a central part of who we are and what makes us unique, and we're embracing that. Our competitors are going the other direction, I understand, and we are going to double down in this area. And I think it's going to be an even bigger differentiator in the future than it's ever been in the past with what we're working on. And did I allude you?

[Paul Lejuez:]

Sorry. That's great. Thanks and good luck.

[Jonathan Pertchik:]

Thank you. Appreciate it.

[Operator:]

The next question will come from Jim Sullivan with BTIG.

[James Sullivan:]

Sure. Jon, I would want to talk a little bit about your franchise numbers. And not sure if I got this right, but reading the earnings releases kind of sequentially, did you add another -- what was it 8 new franchises in the quarter?

[Jonathan Pertchik:]

Is that -- Peter, is that the number? I'm sorry, I don't have all those details right here at my fingertips. I'm seeing if I could grab it, Peter, in the meantime, if you see it...

[Peter Crage:]

Yes, I don't have those at my fingertips .

[Jonathan Pertchik:]

We'll follow-up right away, Jim, with you. But we have a very big pipeline, but we announced or either formally signed up opening. We have a very, very large pipeline behind that. Again, we've just really started digging into this, as you know, maybe three quarters back, something like that, put some resource around it at the end of the year, into the beginning of this year in terms of a real dedicated sort of salesperson to grow this in interface with potential franchisees. So it's really spooling up right now. We're in that window of spooling up. But anyway, go ahead.

[James Sullivan:]

Sure. And I think you had said in talking about kind of a target. I think you said in your prepared comments, the target would be or you're hoping it to be in excess of 30 per year. I know in prior calls, I think you've talked about 30 per year. So I just wonder if that -- it's not a big item here, but just whether you are feeling more optimistic about signing more franchisees perhaps than you were maybe at the start of the year.

[Jonathan Pertchik:]

Yes. I would -- I think my optimism or confidence is better word is probably consistent from then until now. I think 30 a year is -- should be a stable state. There's no reason we can't be doing that. It just -- it takes time again to get sort of -- use the word sort of spooled up to kind of get the machine kind of moving to a certain level and then holding it there. And we're in that window, and I'm optimistic and confident we'll achieve that and sustain that. And that's in addition to -- and we're not putting out targets yet on sort of the M&A side and what that could mean for company-owned and company controlled stores. But I do expect, on top of a number like that, we should be able to also execute on acquiring and really cherry picking some great travel centers.

[James Sullivan:]

Okay. Shifting over to DEF volume. Obviously, you've talked for a while about converting pumps to the newer pumps that can also pump to DEF. You've also mentioned that DEF sales were boosted by just an increase in overall diesel volume. And I'm just curious if you could update us on the CapEx side, you've mentioned some delay here for different items, but it did not seem that the DEF pump conversion was part of that. I wonder if you could update us on kind of what the target is for new DEF compliant pumps and where you are in achieving that?

[Jonathan Pertchik:]

I don't have a detail on sort of where we are in numbers. I know where we are -- where we have set our expectation on debt to roll out everywhere, which is 173, not locations, but 173 lanes. And having recently bought a diesel truck myself, putting DEF in myself is I've come to realize how cumbersome it is to pour 2.5 gallon jug in the side of your car and that doesn't automatic shut off like gasoline, your port out, the imagining a truck or doing that with 25 gallons of it, which is what we ask of them at many of our lanes, i.e., they probably go somewhere else instead of to that location. It's a very big opportunity for us, number one. But number two, we're still tracking toward finishing really through early 2022 all of these lanes. And I have no information, and I could follow up just to triple check that we've been slowed particularly there. It's not that large of a scope to add. It's more the equipment. And so long as the equipment is available, the effort and labor is not significant. So I can follow-up to triple check that. But from everything I have in my fingertips here and what I understand is we're tracking consistent to where we've been setting our expectation, and that's early 2022 to complete that work.

[James Sullivan:]

Okay. And then on the -- sorry, go ahead.

[Peter Crage:]

I'm sorry, Jim, John, yes, should we double checked our 8 -- sorry, moving back to a previous question, we did sign 8 franchises in the quarter. Great. Thanks for checking it, Peter. The -- you had talked about -- when you talked about supply chain issues. I think you also mentioned labor in terms of the consultants you might have been using for different parts of the strategy. At the same time, in talking about truck service numbers, which are pretty impressive, you've talked about increasing staffing there. Has the lack of availability of labor or labor availability generally benefactor in the truck service? Or is it -- are you able to hit your numbers and your objectives there?

[Jonathan Pertchik:]

It's been a challenge, and we are hitting our numbers despite the challenge, which I think is sort of the net-net bottom line, maybe the most important takeaway. But it is a battle we fight every single day. We'll hire -- these are made up numbers, the order of magnitude probably about right. We'll hire a couple of hundred techs in a given period and we'll lose 175. And that sort of revolving door continues a bit. I had dinner a week or so ago with a bunch of our senior kind of leaders, not the senior-most guys who were still repair techs, but senior, very experienced. Repair techs just talking through the realities from the kind of the ground level, and it continues. And it's -- the 2 biggest challenges for the industry for -- from my mind or the techs before COVID, tech attrition or retention. And then for the fleets, the drivers themselves, driver shortage, those have both been exacerbated through this time frame. And then we've seen labor pressures as well in other areas that we hadn't seen necessarily to the same extent as a result of COVID and as we get through the later parts of COVID. So that we've been able to execute through it.

[James Sullivan:]

Okay. And then just to be clear, there were comments that, Jon, that both you and Peter made about the EBITDA comparisons, obviously, the year-over-year comps are one thing, and we understand that the comps do get tougher in the back half. On the other hand, in your comments, Jon, I think you said that there was nothing -- well, you regarded the EBITDA result here in Q2 as sustainable and the result of all the initiatives. So just to be clear, this second quarter number is a good number to use going forward as we think about the EBITDA earnings potential of the company.

[Jonathan Pertchik:]

Right. I mean, I'm not shocked by our results of this quarter. We've been working really hard on a long list of things that everybody knows, and I think they're starting to bear fruit and that combined with increased freight volumes and so forth, I think, which, again, is external to us, have caused us to be where we are ending this quarter. There are things -- we talked about labor issues, supply chain issues, big picture inflationary risk, which may not be a bad thing for us, but on the other hand, runaway could be some of the government thing. Again, all things external to us. Some of the issues sort of in D.C., all of which temper my excitement and bring me keep my feet on the ground and say, look, we had a great quarter. I think the broad-based results suggests a level of sustainability. And I think, suggests further that the things we're doing are taking hold, it wasn't like diesel margin. We benefited uniquely from that or something else uniquely. It was so broad-based that it suggests that it's sustainable. That said, and I remind ourselves and our team, we can't get ahead of our skis, and we want to make sure we prove to the world again. And then again and again, I mean this is, I guess, 6 quarters, I guess I've been here and Peter has been here. This is a bit of a breakout. As it's a breakout, I want to make sure we keep our feet on the ground. Everybody is tempering how they think. And we do it again. And then again, in okay, then, we can all sort of -- still stay on the tip of our toes. But I just want to make sure everybody is thinking, still, hey, it's still early innings for us. There's some external fab, which on the one hand, I think, suggests even more strength. But on the other hand, there are some real issues out there that we're grappling with, and they have affected our ability to execute through, again, as we talked about already, the timing of the capital plan, and that could have other impacts that are not today right now identifiable, I can't point to you, Jim, and say, that thing over there is going to hurt us. I can't -- there's -- which is a good thing. And we focus on the negative often. But with all of that said, I still want to make sure we keep our feet on the ground as we come through this quarter and get -- now we're into the next quarter.

[Peter Crage:]

And Jon, if I might add, just on the math side of it, Jim, if you look at a 2-year stack in this business, as Jon mentioned on the call, in the second quarter, we delivered an excess of 80% increase in adjusted EBITDA. And this quarter was filled with a lot of -- the country emerging from the pandemic. And we just to take and extrapolate numbers like that, we just like to caution that it was an incredibly strong quarter. And the back half was a tougher comp. And just want to make sure that we make that statement so that everyone was fully transparent, just on understanding that, that math is something that should be looked at and validated.

[James Sullivan:]

Fair enough. Okay.

[Jonathan Pertchik:]

Appreciate it, Jim.

[Operator:]

Next question will come from Chris Sakai with Singular Research.

[Joichi Sakai:]

I had a question, I guess regarding -- are you seeing any headwinds with the delta variant and as far as travel goes?

[Jonathan Pertchik:]

Sure. Yes. So first of all, let's bifurcate diesel volume. So measuring activity, one of the leading measures indicators for us are within our business is diesel volume separate from gasoline volumes. And on the gasoline side, we're not -- first of all, on both sides -- neither side, are we seeing adverse effects today, anecdotally and as well as watching the news. I mean, numbers are increasing. I'm not sure the worst outcomes are increasing, meaning hospitalizations and death, thankfully, at least that's what we're -- at least hospital -- I'm sorry, deaths, and I'm thankful for that, and hopefully, it stays that way. But anecdotally, I know we're hearing more about it and in certain places, spiking. We're not seeing it yet affect our business and hopefully not at all, but we're not yet. Nothing I can point you to suggest it. You look at our quarter results, how we've started this quarter. And through -- the reason I bifurcated diesel and gasoline is they behaved quite differently coming through COVID. Truckers had to keep trucking, whether it's medicines and essentials. And so I think we did a good job of grabbing more than our market share during the pandemic and through the pandemic into now. But underlying our grab and our success in grabbing share, freight tended to continue moving. It did come down briefly early, early COVID March, April, let's say. And it sort of started to come back. And I don't remember exactly when, but roughly midyear, we started going significantly positive to 2019, again, on the diesel side. I don't know why even if delta kicked back in or kicked in, that COVID kicked in, again, that it would be much different on that side. And then separately, on the gasoline side, we're still down a little bit to say, pre-COVID like 2019 levels, like low mid-single digits, we're down in gasoline volumes. All the other stuff we're doing and even things we haven't started to see the benefits from like our branding and some of the planogramming of refitting the stores and then some of the CapEx stuff like the site refreshes. Those are going to -- I really am excited about the impact to grow the motorist 4-wheel business that we've never really much focused on to really see not just our gasoline volumes, but also the nonfuel stuff. So there's a lot of levers we have to pull to continue to kind of execute and whatever comes our way externally, I think we've proven here sort of the bottom line, I think about it. My third month here, March of last year, this little thing called COVID hit that devastated a lot of companies. I wonder what would have happened to us if we hadn't taken some pretty significant steps to start transforming and then respond with deferrals and other things, what might have been for us? I don't really know. But what I do know is the team we have in place will execute through even a 100-year or 50-year storm like we saw last year, and we'll continue to do that. But the short answer is we haven't seen an effect on our business anecdotally and through the news, there certainly seems like something's happening out there. But I think we're ready for whatever we face.

[Joichi Sakai:]

Great. And then to sort of ask this probably different question. But as far as the electric vehicle charging stations go, do you have any sort of time line there going into 2022?

[Jonathan Pertchik:]

So we start -- so let me step back once again. We always lead in with the truck business, right? That's the big part, 8

[Joichi Sakai:]

Okay. Great. And lastly, as far as IHOP is concerned, heading into 2022, can we expect more IHOPs to open?

[Jonathan Pertchik:]

Yes. You'll see more IHOPs open into next year. We've got those 5 underway. We've got the other one open in South Atlanta. I expect you'll see more of those. While in parallel, we will begin to start and again, we'll get more specific towards the end of this year, probably open -- and again, we have a country prize and iron skill of these proprietary brands. You will see some more IHOPS, and you will see probably two other concepts that I'm really excited about, but it's just a little bit early to get any more specific than that. But yes, I believe you'll see more IHOPS.

[Operator:]

This will conclude today's question-and-answer session. I would now like to turn the conference back over to Jon Pertchik, CEO, to close the call.

[Jonathan Pertchik:]

Again, thank you for your interest in TA and your attention this morning. Everyone, have a great day. Take care. Bye-bye.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.