Travel Centers Jackknifes

Originally Published In the News April 1, 2008 10:50 PM

Have you heard of Travel Centers of America (TA-NYSE) Inc.? I had not...too bad given it has been one of the best shorts of the past year. The company runs a network of truckstops around the country, and while many trucking stocks have been bad, their stock has been a disaster.

You don’t have to give management much credit, but they did show up for the conferecence call today.

To be fair it seems like they have been hit by the perfect storm, but also manage to cite everything that has gone bad in the economy, and it reminds me of retailers who blame shortfalls on the weather:

...the market that TA relies upon is the trucking industry. We believe there were several market and industry conditions in the 2007 fourth quarter most of which have continued so far in 2008, which negatively affected the trucking industry and as a consequence have negatively affected us. First, as many of you know, one statistic we look at to help us measure our business prospects is the American Trucking Association or ATA total truck miles index. During the fourth quarter of 2007 versus the comparable period in 2006, this index was down by 2.4% for October, down by 3.7% for November, and down by 5% for December each on a year-over-year basis. The index continued to decline in 2008 year over year; January 2008 was down 2.6%. The trucking industry is dependent upon many other industries and macro-economic factors affecting the US economy generally. With indicators of extreme weakness in the housing sector, one industry which has problems abound is the trucking industry. New home sales in 2007 were down 26%, the largest such decrease in over 30 years. New housing starts in December hit a 16-year low and moreover were down almost 40% from a year earlier. The manufacturing production index was also weak in 2007 and the ATA’s re-weighting of that index to account its importance to trucking shows even weaker results. In part because of the weak trading value of the US dollar, US imports have slowed. Lower levels of imported goods shipped by truck within the US have outpaced higher levels of export shipped by truck within the US. Seeking Alpha

It is worth noting that the company has only been public a little over a year. Nice work, underwriters.

Not!

TravelCenters of America LLC Q4 2007 Earnings Call Transcript
Seeking Alpha

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