Casey’s Strong Sales Performance Continues Through The 2nd Quarter

Casey’s General Stores, Inc. (Nasdaq: CASY) today reported $0.99 in basic earnings per share for the second quarter of fiscal 2012 ended October 31, 2011 compared to $0.51 for the same period a year ago. Year to date, basic earnings per share were $2.02 versus $1.27 for the same period last year. After adjusting for costs associated with the hostile takeover attempt by Alimentation Couche-Tard, Inc., basic earnings per share last year would have been $0.81 for the quarter and $1.62 year to date. We are pleased with the second quarter results, despite the continued challenges impacting our industry,” stated President and CEO Robert J. Myers. “We experienced a favorable gas margin and strong inside sales, resulting in a 15.6% increase in total gross profit.”

Gasoline—The Company’s annual goal is to increase same-store gasoline gallons sold 1% with an average margin of 13.5 cents per gallon. For the second quarter, same-store gallons sold were down 2.9%, adversely impacted by a 30.9% increase in retail gas prices from the same period a year ago. The favorable gasoline margin environment continued in the second quarter resulting in an average margin of 16.7 cents per gallon. “The average gasoline margin for the trailing four years is 14.2 cents per gallon,” said Myers. For the year, total gallons sold were up 6.1% to 755.9 million with an average margin of 16.9 cents, while gross profit rose 14.6%. Same-store gallons for the year were down 2.8%.

Grocery & Other Merchandise—Casey’s annual goal is to increase same-store sales 5.8% with an average margin of 32.8%. For the quarter, same-store sales rose 5.8% with an average margin of 32.5%. For the fourth consecutive quarter, the Company experienced double digit sales increases across all major areas of this category. As a result, total sales were up 15.8%. “Competitive cigarette pricing continued to impact the margin in the second quarter compared to the second quarter a year ago,” stated Myers. “However, our cigarette margin began to stabilize in the second quarter as we start to cycle against the more competitive landscape that began about a year ago.” Despite the margin pressure from cigarettes, gross profit dollars increased 14.3% for the quarter. For the six months ended October 31, 2011, same-store sales were up 6.0% with an average margin of 32.5%. Total sales for the year are up 15.5% to $723 million.

Prepared Food & Fountain—The goal for fiscal 2012 is to increase same-store sales 7.7% with an average margin of 61.8%. Same-store sales were up 14.2% for the quarter and 14.8% year to date. The average margin for the quarter was 59.5%, down from the same period a year ago, primarily due to a rise in commodity prices. “It is essential to have high quality prepared food offerings at competitive prices to meet the needs of our value oriented customer base,” said Myers. “This focus on our customers enabled us to increase sales by 20.2% and gross profit by 14.1% for the quarter, despite a decline in the margin,” said Myers. Year to date, total sales were up 20.6% to $252.7 million compared to the first six months last year, with an average margin of 60.4%.

Operating Expenses—Year to date, operating expenses increased 12.3% to $343.2 million. For the quarter, operating expenses were up 12.1%. After adjusting for the expenses associated with the unsolicited offer by Couche-Tard in the prior year, expenses increased 18.4% in the quarter and 17.8% at the six month mark. “The increase was driven primarily by operating 128 more stores this quarter and a $5.2 million increase in credit card fees compared to the same period a year ago,” stated Myers.

Expansion—The annual goal is to increase the total number of stores 4-6%. At the mid-year point, the Company had acquired 33 stores and completed 8 new-store constructions. “We are on pace to build approximately 30 stores by the end of the fiscal year,” said Myers. “The acquisition environment continues to be active, and we remain optimistic about our long-term opportunities.”

Dividend—At its December meeting, the Board of Directors declared a quarterly dividend of $0.15 per share. The dividend is payable February 15, 2012 to shareholders of record on February 1, 2012.

Casey’s General Stores, Inc.
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except share and per share amounts)
(Unaudited)
				Three months ended October 31,							Six months ended October 31,
				2011			2010				2011			2010
Total revenue			$	1,782,518			1,349,519			$	3,656,350			2,711,546
Cost of goods sold (exclusive of
depreciation and amortization,
shown separately below)				1,519,600			1,122,142				3,126,650			2,250,198
Gross profit				262,918			227,377				529,700			461,348
Operating expenses				171,832			153,263				343,248			305,649
Depreciation and amortization				23,432			20,041				46,327			39,604
Interest, net				8,777			8,195				17,711			10,722
Loss on early retirement of debt				-----------			11,350				-----------			11,350
Earnings before income taxes				58,877			34,528				122,414			94,023
Federal and state income taxes				21,245			12,836				45,391			35,045
Net earnings			$	37,632			21,692			$	77,023			58,978
Earnings per common share
Basic			$	.99			.51			$	2.02			1.27
Diluted			$	.98			.51			$	2.01			1.26
Basic weighted average shares
outstanding				38,055,909			42,283,525				38,040,142			46,622,176
Plus effect of stock options				342,934			287,678				328,239			263,899
Diluted weighted average shares
outstanding				38,398,843			42,571,203				38,368,381			46,886,075

Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
				October 31,				April 30,
				2011				2011
Assets
Current assets
Cash and cash equivalents			$	86,200			$	59,572
Receivables				19,752				20,154
Inventories				159,868				159,200
Prepaid expenses				2,007				1,180
Deferred income taxes				11,393				10,405
Income taxes receivable				-----------				43,376
Total current assets				279,220				293,887
Other assets, net of amortization				11,801				11,721
Goodwill				104,386				88,042
Property and equipment, net of
accumulated depreciation of $818,012 at
October 31, 2011, and of $777,342 at April 30, 2011				1,302,983				1,217,305
Total assets			$	1,698,390			$	1,610,955
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank			$	-----------			$	600
Current maturities of long-term debt				5,845				1,167
Accounts payable				203,185				215,675
Accrued expenses				78,523				77,058
Income taxes payable				1,236				-----------
Total current liabilities				288,789				294,500
Long-term debt, net of current maturities				673,466				678,680
Deferred income taxes				230,206				203,078
Deferred compensation				13,715				13,858
Other long-term liabilities				19,156				16,943
Total liabilities				1,225,332				1,207,059
Total shareholders' equity				473,058				403,896
Total liabilities and shareholders' equity			$	1,698,390			$	1,610,955

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. 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.

Sales and Gross Profit by Product
(Amounts in thousands)
Six months ended							Grocery & Other					Prepared Food
10/31/11			Gasoline				Merchandise					& Fountain					Other					Total
Sales			$	2,666,412			$	722,987				$	252,681				$	14,270				$	3,656,350
Gross profit			$	128,009			$	234,950				$	152,501				$	14,240				$	529,700
Margin				4.8	%			32.5	%				60.4	%				99.8	%				14.5	%
Gasoline gallons				755,911
Six months ended
10/31/10
Sales			$	1,864,270			$	626,106				$	209,565				$	11,605				$	2,711,546
Gross profit			$	111,661			$	205,680				$	132,431				$	11,576				$	461,348
Margin				6.0	%			32.9	%				63.2	%				99.8	%				17.0	%
Gasoline gallons				712,117

Gasoline Gallons																							Gasoline Margin
Same-store Sales Growth																							(Cents per gallon, excluding credit card fees)
																			Fiscal																							Fiscal
			Q1				Q2				Q3				Q4				Year							Q1				Q2				Q3				Q4				Year
F2012			-2.7	%			-2.9	%															F2012			17.2	¢			16.7	¢
F2011			1.5				3.6				3.5	%			-1.9	%			1.6	%			F2011			16.4				14.9				13.9	¢			15.6	¢			15.2	¢
F2010			3.2				-0.7				-2.9				0.2				- 0.1				F2010			15.7				14.3				12.4				13.1				13.9
Grocery & Other Merchandise																							Grocery & Other Merchandise
Same-store Sales Growth																							Margin
																			Fiscal																							Fiscal
			Q1				Q2				Q3				Q4				Year							Q1				Q2				Q3				Q4				Year
F2012			6.2	%			5.8	%															F2012			32.5	%			32.5	%
F2011			2.0				6.9				5.8	%			4.8	%			4.6	%			F2011			32.8				32.9				30.9	%			32.1	%			32.2	%
F2010			6.4				1.9				1.7				3.1				3.3				F2010			34.3				34.1				32.7				33.1				33.6
Prepared Food & Fountain																							Prepared Food & Fountain
Same-store Sales Growth																							Margin
																			Fiscal																							Fiscal
			Q1				Q2				Q3				Q4				Year							Q1				Q2				Q3				Q4				Year
F2012			15.3	%			14.2	%															F2012			61.2	%			59.5	%
F2011			2.4				7.2				10.5	%			11.8	%			7.7	%			F2011			63.8				62.7				62.1	%			60.2	%			62.2	%
F2010			6.6				3.4				1.4				5.3				4.2				F2010			63.8				64.6				62.8				64.1				63.8

Corporate information is available at this Web site: http://www.caseys.com . Earnings will be reported during a conference call on December 7, 2011. The call will be broadcast live over the Internet at 9:30 a.m. CST via the Investor Relations section of our Web site and will be available in an archived format.

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