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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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