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Casey's Continues Strong Performance In Second Quarter

Casey’s General Stores, Inc. ("Casey’s" or the "Company") (Nasdaq symbol CASY) today reported diluted earnings per share of $2.21 for the second quarter of fiscal year 2020 ended October 31, 2019, compared to $1.80 per share for the same quarter a year ago, representing nearly 23% growth compared to last year. "Excluding impacts of tax reform, this represents the sixth consecutive quarter of at least 20% growth in diluted earnings per share, compared to prior year quarters," said Darren Rebelez, President and Chief Executive Officer. Second quarter results were primarily driven by continued strong growth in fuel gross profit dollars, new store openings, and an ongoing focus on operating efficiencies. "We are optimistic about the new initiatives that will launch in the back half of fiscal 2020 and beyond, and believe they will continue to create additional shareholder value," stated Rebelez.

Fuel - For the quarter, average fuel margin was 22.9 cents per gallon, while same-store gallons sold were down 1.8%. Second quarter gross profit dollars increased nearly 19% to $140.8 million, and total gallons sold were up 3.4% to 614.1 million gallons. "Our centralized retail pricing capability continues to provide the agility needed to capture fuel profit, and we are gaining traction on our fuel procurement strategy. We remain optimistic these new capabilities will further enhance fuel profitability moving forward," said Rebelez. For the six months ended October 31, 2019, total gallons sold were up 3.1% to 1.2 billion. Same-store gallons sold year to date were down 2.0% with an average margin of 23.7 cents per gallon. In that same period, gross profit dollars increased 20.5% to $291.8 million.

Grocery and Other Merchandise - For the quarter, same-store sales were up 3.2% with average margin of 33.3%. "The average margin in the quarter benefited in part from a favorable product mix shift to higher margin items. We look forward to continued momentum as we build more data within our price optimization tool," said Rebelez. For the second quarter, total grocery and other merchandise revenue increased 6.8% to $660.6 million, and gross profit dollars increased nearly 10% to $220.1 million. Total revenue for the first six months was up 6.8% to $1.3 billion, while total gross profit dollars grew 6.5% to $435.6 million. Same-store sales year to date were up 3.1% with an average margin of 32.3%.

Prepared Food and Fountain - Same-store sales for the quarter were up 1.9% with average margin of 60.9%. "While the food service environment remains highly competitive, we did see sequential improvement in same-store sales compared to first quarter, as well as on a two-year stack basis," said Rebelez. The average margin was adversely impacted by higher commodity costs compared to prior year. Total prepared food and fountain revenue increased 5.2% to $297.8 million in the second quarter while gross profit dollars grew to $181.5 million. For the first six months, total revenue increased 5.3% to $593.7 million while total gross profit dollars grew 4.2% to $365.5 million. Year to date, same-store sales were up 1.8% with an average margin of 61.6%.

Operating Expenses - For the second quarter, total operating expenses increased 8.5% to $373.4 million. Year to date, operating expenses were up 7.1%. The increase in total operating expenses was primarily attributable to operating 84 more stores than the same quarter in the prior year. Same-store operating expenses excluding credit card fees were up 3.4% for the quarter. "Operating expense control remains a priority. This quarter was positively impacted by lower insurance costs and continued focus on hours management," noted Rebelez. "As we complete additional initiatives focused on operating expenses, we'll have incremental data to optimize operations."

Expansion - The following table represents the roll forward of store growth through the second quarter of fiscal 2020:

Store Count

Stores at 4/30/19

2,146

New store construction

36

Acquisitions

5

Prior acquisitions opened

3

Closed

(9)

Stores at 10/31/19

2,181

The Company has 12 acquisition stores under agreement to purchase and a new store pipeline of 97 sites, including 31 under construction as of October 31, 2019. "The announcement of our third distribution center in Joplin, Missouri, opens up new territory to expand our business," said Rebelez. "We are looking forward to the immediate efficiencies and opportunity for future expansion this third location will provide."

Share Repurchase Program- The Company has $300 million remaining on its authorization from March 2018. There were no repurchases made against that authorization in the second quarter.

Dividend - At its December meeting, the Board of Directors declared a quarterly dividend of $0.32 per share. The dividend is payable February 17, 2020 to shareholders of record on February 3, 2020.

Fiscal 2020 Guidance - The following represents our current fiscal 2020 guidance:

Same-store Sales

Margin

Previous

Current

Previous

Current

Fuel (Gallons and CPG)

(.5%) - 1.0%

(1.0%) - .5%

20.5 - 22.5

21.0 - 23.0

Grocery and Other Merchandise

2.5 - 4.0%

2.5 - 4.0%

32.0 - 33.0%

32.0 - 33.0%

Prepared Food and Fountain

3.0 - 6.0%

1.5 - 4.0%

61.0 - 63.0%

61.0 - 63.0%

Operating Expenses

7.0 - 9.0%

7.0 - 9.0%

Depreciation and Amortization

11.0 - 13.0%

6.0 - 8.0%

New Store Construction

60 stores

60 stores

Acquisitions

25 stores

25 stores

Casey’s General Stores, Inc.

Condensed Consolidated

Statements of Income

(Dollars in thousands, except share and per share amounts) (Unaudited)

Three Months Ended
October 31,

Six Months Ended
October 31,

2019

2018

2019

2018

Total revenue

$

2,487,586

$

2,538,005

$

5,114,215

$

5,126,437

Cost of goods sold (exclusive of depreciation and amortization, shown separately below)

1,930,521

2,027,684

3,991,464

4,094,348

Operating expenses

373,383

344,186

753,224

703,578

Depreciation and amortization

62,888

61,356

122,696

120,196

Interest, net

12,683

14,191

26,404

28,597

Income before income taxes

108,111

90,588

220,427

179,718

Federal and state income taxes

26,130

23,973

52,631

42,879

Net income

$

81,981

$

66,615

$

167,796

$

136,839

Net income per common share

Basic

$

2.22

$

1.82

$

4.55

$

3.73

Diluted

$

2.21

$

1.80

$

4.52

$

3.70

Basic weighted average shares

36,916,937

36,698,528

36,891,324

36,683,450

Plus effect of stock compensation

219,248

318,943

218,189

314,181

Diluted weighted average shares

37,136,185

37,017,471

37,109,513

36,997,631

Casey’s General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

October 31, 2019

April 30, 2019

Assets

Current assets

Cash and cash equivalents

$

43,976

$

63,296

Receivables

44,775

37,856

Inventories

271,443

273,040

Prepaid expenses

13,783

7,493

Income tax receivable

21,344

28,895

Total current assets

395,321

410,580

Other assets, net of amortization

66,016

41,154

Goodwill

157,648

157,223

Property and equipment, net of accumulated depreciation of $1,934,418 at October 31, 2019 and $1,826,936 at April 30, 2019

3,246,884

3,122,419

Total assets

$

3,865,869

$

3,731,376

Liabilities and Shareholders’ Equity

Current liabilities

Lines of credit

$

25,000

$

75,000

Current maturities of long-term debt

577,698

17,205

Accounts payable

327,114

335,240

Accrued expenses

154,249

163,487

Total current liabilities

1,084,061

590,932

Long-term debt, net of current maturities

715,060

1,283,275

Deferred income taxes

417,271

385,788

Deferred compensation

15,847

15,881

Insurance accruals, net of current portion

22,247

22,663

Other long-term liabilities

49,535

24,068

Total liabilities

2,304,021

2,322,607

Total shareholders’ equity

1,561,848

1,408,769

Total liabilities and shareholders’ equity

$

3,865,869

$

3,731,376

Certain statements in this news release, including any discussion of management expectations for future periods, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from future results expressed or implied by those statements, including our ability to execute our value creation plan or to realize benefits therefrom. Casey’s disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Summary by Category (Amounts in thousands)

Three months ended 10/31/2019

Fuel

Grocery &
Other
Merchandise

Prepared Food
& Fountain

Other

Total

Revenue

$

1,514,474

$

660,562

$

297,846

$

14,704

$

2,487,586

Revenue less cost of goods sold (exclusive of depreciation and amortization)

$

140,798

$

220,134

$

181,452

$

14,681

$

557,065

9.3

%

33.3

%

60.9

%

99.8

%

22.4

%

Fuel gallons

614,071

Three months ended 10/31/2018

Revenue

$

1,621,868

$

618,250

$

283,062

$

14,825

$

2,538,005

Revenue less cost of goods sold (exclusive of depreciation and amortization)

$

118,656

$

200,193

$

176,675

$

14,797

$

510,321

7.3

%

32.4

%

62.4

%

99.8

%

20.1

%

Fuel gallons

593,750

Summary by Category (Amounts in thousands)

Six months ended 10/31/2019

Fuel

Grocery &
Other
Merchandise

Prepared Food
& Fountain

Other

Total

Revenue

$

3,142,042

$

1,348,480

$

593,723

$

29,970

$

5,114,215

Revenue less cost of goods sold (excluding depreciation and amortization)

$

291,787

$

435,587

$

365,464

$

29,913

$

1,122,751

9.3

%

32.3

%

61.6

%

99.8

%

22.0

%

Fuel gallons

1,233,155

Six months ended 10/31/2018

Revenue

$

3,269,285

$

1,263,050

$

564,065

$

30,037

$

5,126,437

Revenue less cost of goods sold (excluding depreciation and amortization)

$

242,132

$

409,119

$

350,859

$

29,979

$

1,032,089

7.4

%

32.4

%

62.2

%

99.8

%

20.1

%

Fuel gallons

1,195,545

Fuel Gallons

Fuel Margin

Same-store Sales

(Cents per gallon, excluding credit card fees)

Q1

Q2

Q3

Q4

Fiscal

Year

Q1

Q2

Q3

Q4

Fiscal

Year

F2020

(2.0

)%

(1.8

)%

F2020

24.4

¢

22.9

¢

F2019

0.5

(1.1

)

(3.4

)%

(2.8

)%

(1.7

)%

F2019

20.5

20.0

22.1

¢

18.6

¢

20.3

¢

F2018

1.7

1.9

3.8

2.0

2.3

F2018

19.3

19.7

18.6

16.3

18.5

Grocery & Other Merchandise

Grocery & Other Merchandise

Same-store Sales

Margin

Q1

Q2

Q3

Q4

Fiscal

Year

Q1

Q2

Q3

Q4

Fiscal

Year

F2020

3.2

%

3.2

%

F2020

31.3

%

33.3

%

F2019

3.2

2.7

3.4

%

5.7

%

3.6

%

F2019

32.4

32.4

31.9

%

31.5

%

32.1

%

F2018

3.1

2.5

2.5

(0.4

)

1.9

F2018

31.9

32.0

31.9

31.2

31.8

Prepared Food & Fountain

Prepared Food & Fountain

Same-store Sales

Margin

Q1

Q2

Q3

Q4

Fiscal

Year

Q1

Q2

Q3

Q4

Fiscal

Year

F2020

1.6

%

1.9

%

F2020

62.2

%

60.9

%

F2019

1.7

2.2

1.5

%

2.0

%

1.9

%

F2019

62.0

62.4

62.3

%

62.2

%

62.2

%

F2018

3.7

2.1

1.7

(1.3

)

1.7

F2018

62.5

61.3

60.5

59.7

61.0

Corporate information is available at this website: https://www.caseys.com. Earnings will be reported during a conference call on December 10, 2019. The call will be broadcast live over the Internet at 9:30 a.m. CST. To access the call, go to the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx. No access code is required. A webcast replay of the call will remain available in an archived format on the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx for one year after the call.

View source version on businesswire.com: https://www.businesswire.com/news/home/20191209005783/en/

Contacts

Bill Walljasper
(515) 965-6505