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TheStreet Open House

Casey's Third Quarter Results Driven By Strong Inside Sales

Stocks in this article: CASY

Casey’s General Stores, Inc. (Nasdaq: CASY) today reported $0.44 in basic earnings per share for the third quarter of fiscal 2012 ended January 31, 2012 compared to $0.34 for the same period a year ago. Year to date, basic earnings per share are $2.46 versus $1.64 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 $0.37 for the quarter and $1.87 year to date. “The solid third quarter results continue to demonstrate that Casey’s is executing well on our strategic plan,” said President and CEO Robert J Myers. “We are expanding our footprint in our current market as well as the development of new states.”

Gasoline—The Company’s annual goal is to increase same-store gasoline gallons sold by 1% with an average margin of 13.5 cents per gallon. For the third quarter, same-store gallons sold are down 2.4% with an average margin of 13.6 cents per gallon. “Same store gallons continue to be impacted by higher prices at the pump.” said Myers. “However, we are encouraged by the 3.4% increase in our same store customer count.” For the fiscal year, total gallons sold are up 5.4% to 1.1 billion with an average margin of 15.9 cents, while gross profit dollars rose 10.9%. Same-store gallons for the year are down 2.6%.

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 6.3% with an average margin of 31.8%; up 90 basis points from the same period last year. For the sixth consecutive quarter, the Company experienced a double digit sales increase in this category with total sales up 12.7% over the prior third quarter. “Favorable weather comparisons, as well as the increased contribution from our new store design and remodel program helped drive sales in higher-margin items throughout the quarter,” stated Myers. Gross profit dollars increased 16.1% for the quarter and 14.8% year to date. Same-store sales for the year are up 6% with an average margin of 32.3%. Total sales for the year are up 14.6% to slightly over $1 billion.

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 are up 12.6% for the quarter and 14% year to date. The average margin for the quarter was 61.2% down from the same period a year ago, primarily due to a rise in cheese cost. “We are pleased with our ability to increase gross profit in this category nearly 17% for the quarter compared to the same period last year,” said Myers. “We continue to benefit from our remodel program and the addition of kitchens to recent acquisitions. Also, based on the results of prior stores converted to 24 hours, we converted an additional 145 stores this quarter. The Company now has approximately 20% of the store base operating 24 hours-a-day. Year to date, total sales were up 19.9% to $371.4 million compared to the first nine months last year, with an average margin of 60.6%.

Operating Expenses—Year to date, operating expenses increased 12.1% to $512.5 million. For the quarter, operating expenses are up 11.7%. After adjusting for the expenses associated with the unsolicited offer by Couche-Tard in the prior year, expenses increased 13% in the quarter and 16.2% at the nine month mark. “The increase was primarily driven by a rise in expenses related to operating 68 more stores this quarter compared to last year, as well as other initiatives such as major remodels and expanded store hours,” stated Myers. “The rise in credit card fees, while slower relative to previous quarters, was up 14% or $2.2 million.”

Expansion—The annual goal is to increase the total number of stores 4-6%. At the nine month mark, the Company had acquired 33 stores and completed 18 new-store constructions, bringing the total store count to 1,686. “With the combination of acquisitions and new store constructions, we anticipate adding approximately 65 stores this fiscal year,” said Myers. “In addition to this activity, the Company also plans to replace 11 stores by the end of the fiscal year and begin construction on 25 major remodels.”

Dividend—At its March meeting, the Board of Directors declared a quarterly dividend of $0.15 per share. The dividend is payable May 15, 2012 to shareholders of record on May 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 January 31,

   

Nine months ended January 31,

2012     2011 2012     2011
Total revenue $ 1,578,950 1,374,199 $ 5,235,300 4,085,745

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

1,350,200

1,171,668

4,476,850

3,421,866

Gross profit 228,750 202,531 758,450 663,879
Operating expenses 169,231 151,506 512,479 457,155
Depreciation and amortization 24,616 20,769 70,943 60,373
Interest, net 8,730 8,908 26,441 19,630
Loss on early retirement of debt ---------- ---------- ---------- 11,350
Earnings before income taxes 26,173 21,348 148,587 115,371
Federal and state income taxes 9,474 8,473 54,865 43,518
Net earnings $ 16,699 12,875 $ 93,722 71,853
 
Earnings per common share
Basic $ .44 .34 $ 2.46 1.64
Diluted $ .43 .34 $ 2.44 1.63

Basic weighted average shares outstanding

38,071,742

37,938,394

38,050,676

43,727,582

Plus effect of stock compensation 383,394 305,056 342,826 272,828

Diluted weighted average shares outstanding

38,455,136

38,243,450

38,393,502

44,000,410

 
 
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 
   

January 31,

   

April 30,

2012 2011
Assets
Current assets
Cash and cash equivalents $ 46,338 $ 59,572
Receivables 17,471 20,154
Inventories 161,942 159,200
Prepaid expenses 1,846 1,180
Deferred income taxes 12,315 10,405
Income taxes receivable 19,803 43,376
Total current assets       259,715       293,887
Other assets, net of amortization 11,985 11,721
Goodwill 104,386 88,042

Property and equipment, net of accumulated depreciation of $838,547 at January 31, 2012, and $777,342 at April 30, 2011

1,347,536 1,217,305
Total assets     $ 1,723,622     $ 1,610,955
 
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank $ ------------ $ 600
Current maturities of long-term debt 5,733 1,167
Accounts payable 185,184 215,675
Accrued expenses 90,586 77,058
Total current liabilities       281,503       294,500
Long-term debt, net of current maturities 673,113 678,680
Deferred income taxes 249,885 203,078
Deferred compensation 13,963 13,858
Other long-term liabilities 19,520 16,943
Total liabilities 1,237,984 1,207,059
 
Total shareholders' equity 485,638 403,896
   
Total liabilities and shareholders' equity     $ 1,723,622     $ 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)

 
Nine months ended         Grocery & Other     Prepared Food        
1/31/12 Gasoline Merchandise & Fountain Other Total
 
Sales $ 3,807,642 $ 1,034,187 $ 371,431 $ 22,040 $ 5,235,300
Gross profit $ 177,189 $ 334,049 $ 225,215 $ 21,997 $ 758,450
Margin 4.7 % 32.3 % 60.6 % 99.8 % 14.5 %
Gasoline gallons 1,116,684
 
Nine months ended
1/31/11
 
Sales $ 2,855,413 $ 902,181 $ 309,754 $ 18,397 $ 4,085,745
Gross profit $ 159,762 $ 291,065 $ 194,697 $ 18,355 $ 663,879
Margin 5.6 % 32.3 % 62.9 % 99.8 % 16.3 %
Gasoline gallons       1,059,146                          
 
         
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 % -2.4 % F2012 17.2¢ 16.7¢ 13.6¢
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 % 6.3 % F2012 32.5 % 32.5 % 31.8 %
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 % 12.6 % F2012 61.2 % 59.5 % 61.2 %
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 March 6, 2012. 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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