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Casey's Reports Record Diluted Earnings Per Share In First Quarter

ANKENY, Iowa--(BUSINESS WIRE)--

Casey’s General Stores, Inc. (“Casey’s” or the “Company”) (Nasdaq symbol CASY) today reported diluted earnings per share of $2.31 for the first quarter of fiscal year 2020 ended July 31, 2019, compared to $1.90 per share for the same quarter a year ago, representing 22% growth compared to last year. "Quarterly results were positively impacted by our fuel price optimization initiative, store growth, and a continued focus on controlling operating expenses," said Darren Rebelez, President and Chief Executive Officer. "As we look ahead, we remain optimistic our long-term strategy, including the value creation plan initiatives, will generate additional shareholder value."

Fuel - For the quarter, average fuel margin was 24.4 cents per gallon, while same-store gallons sold were down 2.0%. "The combination of our price optimization efforts along with a favorable fuel margin environment allowed us to grow gross profit dollars by over 22% for the quarter," said Rebelez. "We are excited about the advancements made with the fuel price optimization tool. We have gained significant agility to capture additional fuel margin while maintaining a competitive pricing structure." Total gallons sold for the quarter were up 2.9% to 619.1 million gallons while gross profit dollars increased to $151.0 million.

Grocery and Other Merchandise - For the quarter, same-store sales were up 3.2% with average margin of 31.3%. Average margin was adversely impacted by a $6.6 million out-of-period inventory adjustment, which, if excluded, would have resulted in average margin of 32.3%. "We are encouraged by the momentum in this category and are optimistic about the expected impact of our current roll out of the inside store price optimization tool," said Rebelez. For the first quarter, total grocery and other merchandise revenue increased 6.7% to $687.9 million, and gross profit dollars increased to $215.5 million.

Prepared Food and Fountain - Same-store sales for the quarter were up 1.6% with average margin of 62.2%. "As we continue our digital transformation journey, we are highly focused on the pricing and promotional capabilities we are adding," said Rebelez. "We believe the previously launched e-commerce website and new mobile app, when combined with our future loyalty program, will significantly enhance the overall guest experience." Total prepared food and fountain revenue increased 5.3% to $295.9 million in the first quarter while gross profit dollars grew to $184.0 million.

Operating Expenses - For the first quarter, total operating expenses increased 5.7% to $379.8 million. The increase in total operating expenses was primarily attributable to operating 76 more stores than the same quarter in the prior year. Same-store operating expenses excluding credit card fees were up 2.5% for the quarter. "We continue to emphasize at all levels of the company the importance of maintaining strong discipline over operating expenses," noted Rebelez. "We will remain focused on identifying additional opportunities to improve expense management throughout the fiscal year."

Depreciation for the quarter was up 1.6%, which was significantly lower than our annual guidance, due to an adjustment related to the useful lives of our underground storage tanks. Without the adjustment, depreciation would have been up 8.6%.

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

 

Store Count

Stores at 4/30/19

2,146

New Store Construction

15

Acquisitions

4

Acquisitions not opened

Prior Acquisitions opened

2

Closed

(6)

Stores at 7/31/19

2,161

The Company has 11 acquisition stores under agreement to purchase and a new store pipeline of 107 sites, including 35 under construction as of July 31, 2019. "Development plans are underway for a third distribution center, which is scheduled to break ground in the southwest part of our territory later this year," said Rebelez. "Upon completion, this will provide immediate cost savings and support our future expansion strategy."

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 first quarter.

Dividend - At its September meeting, the Board of Directors declared a quarterly dividend of $0.32 per share. The dividend is payable November 15, 2019 to shareholders of record on November 1, 2019.

Fiscal 2020 Guidance - No changes have been made to the current fiscal 2020 guidance:

 

Same-store Sales

 

Margin

Fuel (Gallons and CPG)

(.5%) - 1.0%

 

20.5 - 22.5

Grocery and Other Merchandise

2.5 - 4.0%

 

32.0 - 33.0%

Prepared Food and Fountain

3.0 - 6.0%

 

61.0 - 63.0%

 

 

 

 

Operating Expenses

7.0 - 9.0%

 

 

Depreciation and Amortization

11.0 - 13.0%

 

 

New Store Construction

60 stores

 

 

Acquisitions

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

July 31,

 

2019

 

2018

Total revenue

$

2,626,629

 

$

2,588,432

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

2,060,943

 

2,066,664

Operating expenses

379,841

 

359,392

Depreciation and amortization

59,808

 

58,840

Interest, net

13,721

 

14,406

Income before income taxes

112,316

 

89,130

Federal and state income taxes

26,501

 

18,906

Net income

$

85,815

 

$

70,224

Net income per common share

 

 

 

Basic

$

2.33

 

$

1.92

Diluted

$

2.31

 

$

1.90

Basic weighted average shares

36,864,070

 

36,669,021

Plus effect of stock compensation

221,852

 

311,387

Diluted weighted average shares

37,085,922

 

36,980,408

Casey’s General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

July 31,

 

April 30,

2019

2019

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

96,733

 

$

63,296

Receivables

39,554

 

37,856

Inventories

273,755

 

273,040

Prepaid expenses

12,969

 

7,493

Income tax receivable

15,059

 

28,895

Total current assets

438,070

 

410,580

Other assets, net of amortization

43,146

 

41,154

Goodwill

157,223

 

157,223

Property and equipment, net of accumulated depreciation of $1,878,705 at July 31, 2019 and $1,826,936 at April 30, 2019

3,198,307

 

3,122,419

Total assets

$

3,836,746

 

$

3,731,376

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Lines of credit

$

50,000

 

$

75,000

Current maturities of long-term debt

18,846

 

17,205

Accounts payable

347,181

 

335,240

Accrued expenses

159,001

 

163,487

Total current liabilities

575,028

 

590,932

Long-term debt, net of current maturities

1,303,429

 

1,283,275

Deferred income taxes

402,840

 

385,788

Deferred compensation

16,027

 

15,881

Insurance accruals, net of current portion

21,531

 

22,663

Other long-term liabilities

28,677

 

24,068

Total liabilities

2,347,532

 

2,322,607

Total shareholders’ equity

1,489,214

 

1,408,769

Total liabilities and shareholders’ equity

$

3,836,746

 

$

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 7/31/2019

Fuel

 

Grocery & Other

Merchandise

 

Prepared Food

& Fountain

 

Other

 

Total

Revenue

$

1,627,568

 

 

$

687,918

 

 

$

295,877

 

 

$

15,266

 

 

$

2,626,629

 

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

$

150,989

 

 

$

215,453

 

 

$

184,012

 

 

$

15,232

 

 

$

565,686

 

 

9.3

%

 

31.3

%

 

62.2

%

 

99.8

%

 

21.5

%

Fuel gallons

619,084

 

 

 

 

 

 

 

 

 

Three months ended 7/31/2018

 

 

 

 

 

 

 

 

 

Revenue

$

1,647,417

 

 

$

644,800

 

 

$

281,003

 

 

$

15,212

 

 

$

2,588,432

 

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

$

123,476

 

 

$

208,925

 

 

$

174,184

 

 

$

15,183

 

 

$

521,768

 

 

7.5

%

 

32.4

%

 

62.0

%

 

99.8

%

 

20.2

%

Fuel gallons

601,795

 

 

 

 

 

 

 

 

 

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

)%

 

 

 

 

 

 

 

 

F2020

24.4

¢

 

 

 

 

 

 

 

 

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

%

 

 

 

 

 

 

 

 

F2020

31.3

%

 

 

 

 

 

 

 

 

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

%

 

 

 

 

 

 

 

 

F2020

62.2

%

 

 

 

 

 

 

 

 

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 September 10, 2019. The call will be broadcast live over the Internet at 9:30 a.m. CDT. 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.

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