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Casey's Posts Record First Quarter Financial Results

Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq symbol CASY) one of the leading convenience store chains in the United States, today announced financial results for the three months ended July 31, 2020.

First Quarter Key Highlights

  • Diluted earnings per share of $3.24 compared to $2.31 for the same period a year ago, an increase of 40.3%.

  • Fuel gross profit increased 39% driven by a fuel margin of 38.2 cents for the quarter versus 24.4 cents in the prior-year. Same-store gallons sold decreased 14.6% in the first quarter compared to the prior year.

  • Inside same-store sales were approximately flat for the quarter with an average margin of 39.6%. Digital revenue grew 162% in the quarter.

  • Casey’s Rewards exceeded 2.5 million members, a 25% increase from April 30, 2020.

  • Liquidity remains strong with approximately $572 million available. $569 million in debt was refinanced to 2030 and 2032.

"Throughout the first quarter, Casey’s demonstrated the ability to both safely serve our communities and guests through a constantly changing environment and deliver strong results," said President and CEO Darren Rebelez. "Sales volumes improved this quarter, combined with solid fuel margin execution and disciplined operating expense control, resulting in 40% growth in diluted earnings per share. Casey's continues to execute on our strategic plan, including investment in the guest experience with new digital capabilities to engage our guests today, and down the road."

Earnings

 

Three Months Ended July 31,

 

2020

 

2019

Net income (in thousands)

$

120,592

 

 

$

85,815

Diluted earnings per share

$

3.24

 

 

$

2.31

Adjusted EBITDA (in thousands)

$

237,755

 

 

$

186,372

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document) in the first quarter were significantly greater than prior year due to higher fuel gross profit, partially offset by a slight decline in inside gross profit.

Fuel

 

Three Months Ended July 31,

 

2020

 

2019

Fuel gallons sold (in thousands)

 

549,508

 

 

 

619,084

 

Same-store gallons sold decrease

 

(14.6

)%

 

 

(2.0

)%

Fuel gross profit (in thousands)

$

210,030

 

 

$

150,989

 

Fuel margin (cents per gallon, excluding credit card fees)

38.2

¢

 

24.4

¢

Same-store gallons sold were adversely impacted by COVID-19 and lower guest traffic, though these eased throughout the quarter. Fuel gross profit benefited from a higher fuel margin driven in part by the Company's centralized retail pricing strategy and procurement improvements.

Inside

 

Three Months Ended July 31,

 

2020

 

2019

Inside sales (in thousands)

$

1,002,627

 

 

$

983,795

 

Inside same-store sales (decrease) increase

 

(0.4

)%

 

 

2.7

%

Grocery and other merchandise same-store sales increase

 

3.6

%

 

 

3.2

%

Prepared food and fountain same-store sales (decrease) increase

 

(9.8

)%

 

 

1.6

%

Inside gross profit (in thousands)

$

397,247

 

 

$

399,465

 

Inside margin

 

39.6

%

 

 

40.6

%

Grocery and other merchandise margin

 

32.2

%

 

 

31.3

%

Prepared food and fountain margin

 

59.7

%

 

 

62.2

%

Inside same-store sales steadily improved throughout the quarter. Strong performance in alcohol and whole pizza pies were offset by store traffic declines along with restrictions limiting self-serve prepared food items such as bakery and dispensed beverages. These restrictions also caused a product mix shift that adversely impacted inside margin.

Operating Expenses

 

Three Months Ended July 31,

 

2020

 

2019

Operating expenses (in thousands)

$

386,088

 

 

$

379,841

 

Credit card fees (in thousands)

$

35,490

 

 

$

40,382

 

Same-store operating expense excluding credit card fees (decrease) increase

 

(5.6

)%

 

 

2.5

%

Operating expenses were up due to operating 53 more stores than this time last year, as well as $15 million in COVID-related expenses, offset by a reduction in store hours and credit card fees.

Expansion

 

Store Count

Stores at 4/30/2020

2,207

New store construction

9

Closed

(2)

Stores at 7/31/2020

2,214

Liquidity

At July 31st, the Company had approximately $572 million in available liquidity, consisting of approximately $247 million in cash and cash equivalents on hand and $325 million in borrowing capacity on existing lines of credit. On August 10, 2020, the Company completed the refinancing of the $569 million 5.22% notes due August 2020 with the proceeds from $650 million 2.85% and 2.96% senior notes, issued via private placement, maturing August 7, 2030 and August 6, 2032.

Share Repurchase

The Company has $300 million remaining under its existing share repurchase program. There were no repurchases made against that authorization in the first quarter.

Dividend

At its September meeting, the Board of Director declared a quarterly dividend of $0.32 per share. The dividend is payable November 16, 2020 to shareholders of record on November 2, 2020.

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

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

(Unaudited)

 

 

Three Months Ended
July 31,

 

2020

 

2019

Total revenue

$

2,105,021

 

$

2,626,629

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

 

1,481,518

 

 

2,060,943

Operating expenses

 

386,088

 

 

379,841

Depreciation and amortization

 

65,820

 

 

59,808

Interest, net

 

13,407

 

 

13,721

Income before income taxes

 

158,188

 

 

112,316

Federal and state income taxes

 

37,596

 

 

26,501

Net income

$

120,592

 

$

85,815

Net income per common share

 

 

 

Basic

$

3.26

 

$

2.33

Diluted

$

3.24

 

$

2.31

Basic weighted average shares

 

36,971,376

 

 

36,864,070

Plus effect of stock compensation

 

270,797

 

 

221,852

Diluted weighted average shares

 

37,242,173

 

 

37,085,922

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

July 31, 2020

 

April 30, 2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

246,516

 

$

78,275

Receivables

 

55,647

 

 

48,500

Inventories

 

238,795

 

 

236,007

Prepaid expenses

 

17,133

 

 

9,801

Income tax receivable

 

 

 

14,667

Total current assets

 

558,091

 

 

387,250

Other assets, net of amortization

 

70,877

 

 

71,766

Goodwill

 

161,075

 

 

161,075

Property and equipment, net of accumulated depreciation of $2,050,737 at July 31, 2020 and $2,037,708 at April 30, 2020

 

3,308,950

 

 

3,323,801

Total assets

$

4,098,993

 

$

3,943,892

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Lines of credit

$

 

$

120,000

Current maturities of long-term debt

 

2,269

 

 

570,280

Accounts payable

 

310,118

 

 

184,800

Accrued expenses

 

210,078

 

 

188,348

Income taxes payable

 

11,451

 

Total current liabilities

 

533,916

 

 

1,063,428

Long-term debt, net of current maturities

 

1,281,741

 

 

714,502

Deferred income taxes

 

445,365

 

 

435,598

Deferred compensation

 

14,432

 

 

13,604

Insurance accruals, net of current portion

 

20,766

 

 

22,862

Other long-term liabilities

 

51,535

 

 

50,693

Total liabilities

 

2,347,755

 

 

2,300,687

Total shareholders’ equity

 

1,751,238

 

 

1,643,205

Total liabilities and shareholders’ equity

$

4,098,993

 

$

3,943,892

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

 

Three months ended July 31,

 

2020

 

2019

Cash flows from operating activities:

 

 

 

Net income

$

120,592

 

 

$

85,815

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

65,820

 

 

 

59,808

 

Share-based compensation

 

7,021

 

 

 

7,542

 

Loss on disposal of assets and impairment charges

 

340

 

 

 

527

 

Deferred income taxes

 

9,767

 

 

 

17,052

 

Changes in assets and liabilities:

 

 

 

Receivables

 

(7,147

)

 

 

(1,698

)

Inventories

 

(2,788

)

 

 

(474

)

Prepaid expenses

 

(7,332

)

 

 

(5,476

)

Accounts payable

 

117,756

 

 

 

3,610

 

Accrued expenses

 

21,631

 

 

 

(3,699

)

Income taxes

 

27,087

 

 

 

15,054

 

Other, net

 

(697

)

 

 

696

 

Net cash provided by operating activities

 

352,050

 

 

 

178,757

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(45,146

)

 

 

(101,398

)

Payments for acquisition of businesses, net of cash acquired

 

 

 

 

(4,868

)

Proceeds from sales of property and equipment

 

1,695

 

 

 

1,699

 

Net cash used in investing activities

 

(43,451

)

 

 

(104,567

)

Cash flows from financing activities:

 

 

 

Repayments of long-term debt

 

(873

)

 

 

(905

)

Net payments of short-term debt

 

(120,000

)

 

 

(25,000

)

Proceeds from exercise of stock options

 

211

 

 

 

2,261

 

Payments of cash dividends

 

(11,779

)

 

 

(10,633

)

Tax withholdings on employee share-based awards

 

(7,917

)

 

 

(6,476

)

Net cash used in financing activities

 

(140,358

)

 

 

(40,753

)

Net increase in cash and cash equivalents

 

168,241

 

 

 

33,437

 

Cash and cash equivalents at beginning of the period

 

78,275

 

 

 

63,296

 

Cash and cash equivalents at end of the period

$

246,516

 

 

$

96,733

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

 

 

 

 

Three months ended July 31,

 

 

 

 

2020

 

2019

Cash paid (received) during the period for:

 

 

 

 

 

 

Interest, net of amount capitalized

 

 

 

$

6,882

 

$

6,837

 

Income taxes, net

 

 

 

 

45

 

 

(6,401

)

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

Purchased property and equipment in accounts payable

 

 

 

 

12,890

 

 

23,947

 

Noncash additions from adoption of ASC 842

 

 

 

 

 

22,635

 

Summary by Category (Amounts in thousands)

Three months ended 7/31/2020

Fuel

 

Grocery &
Other

Merchandise

 

Prepared Food
& Fountain

 

Other

 

Total

Revenue

$

1,085,981

 

 

$

731,861

 

 

$

270,766

 

 

$

16,413

 

 

$

2,105,021

 

Gross profit

$

210,030

 

 

$

235,599

 

 

$

161,648

 

 

$

16,226

 

 

$

623,503

 

 

 

19.3

%

 

 

32.2

%

 

 

59.7

%

 

 

98.9

%

 

 

29.6

%

Fuel gallons sold

 

549,508

 

 

 

 

 

 

 

 

 

Three months ended 7/31/2019

 

 

 

 

 

 

 

 

 

Revenue

$

1,627,568

 

 

$

687,918

 

 

$

295,877

 

 

$

15,266

 

 

$

2,626,629

 

Gross profit

$

150,989

 

 

$

215,453

 

 

$

184,012

 

 

$

15,232

 

 

$

565,686

 

 

 

9.3

%

 

 

31.3

%

 

 

62.2

%

 

 

99.8

%

 

 

21.5

%

Fuel gallons sold

 

619,084

 

 

 

 

 

 

 

 

 

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

F2021

(14.6

)%

 

 

 

 

 

 

 

 

F2021

38.2

¢

 

 

 

 

 

F2020

(2.0

)

 

(1.8

)

 

(2.0

)

 

(14.7

)

 

(5.1

)%

F2020

24.4

 

 

22.9

 

21.7

 

40.8

 

26.8

¢

F2019

0.5

 

 

(1.1

)

 

(3.4

)

 

(2.8

)

 

(1.7

)

F2019

20.5

 

 

20.0

 

22.1

 

18.6

 

20.3

 

 

Grocery & Other Merchandise

 

Grocery & Other Merchandise

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal
Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal
Year

F2021

3.6

%

 

 

 

 

 

 

 

 

F2021

32.2

%

 

 

 

 

 

F2020

3.2

 

 

3.2

 

 

3.5

 

 

(2.0

)

 

1.9

%

F2020

31.3

 

 

33.3

 

32.9

 

30.4

 

32.0

%

F2019

3.2

 

 

2.7

 

 

3.4

 

 

5.7

 

 

3.6

 

F2019

32.4

 

 

32.4

 

31.9

 

31.5

 

32.1

 

 

Prepared Food & Fountain

 

Prepared Food & Fountain

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal
Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal
Year

F2021

(9.8

)%

 

 

 

 

 

 

 

 

F2021

59.7

%

 

 

 

 

 

F2020

1.6

 

 

1.9

 

 

2.8

 

 

(13.5

)

 

(1.5

)%

F2020

62.2

 

 

60.9

 

60.2

 

60.0

 

60.9

%

F2019

1.7

 

 

2.2

 

 

1.5

 

 

2.0

 

 

1.9

 

F2019

62.0

 

 

62.4

 

62.3

 

62.2

 

62.2

 

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets as well as impairment charges. Neither EBITDA nor Adjusted EBITDA are considered GAAP measures, and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by management for internal purposes including our capital budgeting process, evaluating acquisition targets, and assessing performance.

Because non-GAAP financial measures are not standardized, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended July 31, 2020 and 2019:

(In thousands)

Three months ended July 31,

 

2020

 

2019

Net income

$

120,592

 

85,815

Interest, net

 

13,407

 

13,721

Federal and state income taxes

 

37,596

 

26,501

Depreciation and amortization

 

65,820

 

59,808

EBITDA

$

237,415

 

185,845

Loss on disposal of assets and impairment charges

 

340

 

527

Adjusted EBITDA

$

237,755

 

186,372

NOTES:

  • Gross Profit is defined as revenue less cost of goods sold (exclusive of depreciation and amortization)

  • Inside is defined as the combination of Grocery and Other Merchandise and Prepared Food and Fountain

This release contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and needs, the Company’s supply chain, business strategies, growth opportunities, performance at our stores, and the potential effects of COVID-19. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward-looking statements, including but not limited to the impact and duration of COVID-19 and related governmental actions, as well as other risks, uncertainties and factors which are described in the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission and available on our website. Any forward-looking statements contained in this release represent our current views as of the date of this release with respect to future events, and Casey’s disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Corporate information is available at this website: https://www.caseys.com. Earnings will be reported during a conference call on September 9, 2020. 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/20200908005944/en/

Contacts

Investor Relations Contact:
Brian Johnson (515) 965-6587

Media Relations Contact:
Katie Petru (515) 446-6772