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Casey's Posts Solid Results Despite Challenging Quarter

Stocks in this article: CASY

Casey’s General Stores, Inc. (Nasdaq: CASY) today reported diluted earnings per share of $1.01 for the first quarter of fiscal 2013 ended July 31, 2012, compared to $1.03 for the same quarter a year ago. “This quarter we completed 26 major remodels, added pizza delivery to 50 locations, and converted 26 stores to 24-hour operations,” said President and CEO Robert J. Myers. “Fiscal 2013 is going to be an exciting year for Casey’s as we continue to roll out these operational initiatives.”

Gasoline – The Company’s annual goal is to increase same-store gallons 1% with an average margin of 14.0 cents per gallon. For the first quarter, same-store gallons sold were down 0.2% with an average margin of 14.9 cents per gallon. “Gas margins are performing in-line with our expectations,” said Myers. “The excessively hot weather adversely impacted several areas of our business, including gasoline gallons sold.” Total gallons sold for the quarter were up 3.7% to 394.1 million gallons.

Grocery and Other Merchandise – Casey’s annual goal is to increase same-store sales 6.2% with an average margin of 32.7%. For the quarter, same store sales were up 2.6% with an average margin of 33.4%. Casey’s experienced a one-time gross profit benefit of approximately $3.5 million due to a change in the Illinois cigarette tax. “Customer traffic was impacted by the adverse weather mentioned above as well as a challenging cigarette market,” stated Myers. “Although cigarette sales are down, we are very pleased with the sales growth within the rest of the category, especially beer and beverages.” Total sales for the quarter were $386.1 million and gross profit rose 8.5% to $128.8 million.

Prepared Food & Fountain – The goal for fiscal 2013 is to increase same-store sales 11% with an average margin of 61.1%. For the first quarter, same store sales were up 10.6% with an average margin of 63.5%. “Prepared food sales continue to benefit from the operational initiatives mentioned above and should improve throughout the year as we add those initiatives to more stores,” said Myers. “The margin benefited from reduced commodity costs, especially cheese and coffee.” Total sales for the category were up 15.2% to $142.7 million, and gross profit increased over 19.4% to $90.6 million.

Operating Expenses – For the first quarter, operating expenses were $189.4 million compared to $171.4 million for the first quarter a year ago, up 10.5%. “Lower retail fuel prices helped keep credit card fees and fuel expense relatively flat,” stated Myers. “Wages were up 12% primarily due to the increase in the number of stores operating 24 hours, pizza delivery, and operating 33 more stores than a year ago.”

Expansion – The Company’s annual goal is to increase the number of stores 4-6%. The Company opened 1 new store construction and 3 replacement stores. There were no acquired stores opened during the quarter. “Although it was a relatively quiet quarter we still expect to meet this goal by the end of the fiscal year,” said Myers. The Company currently has 18 new stores under construction and 27 stores under written agreement to purchase.

Dividend – At its September meeting, the Board of Directors declared a quarterly dividend of $0.165 per share. The dividend is payable November 15, 2012 to shareholders of record on November 1, 2012.

 
 
Casey’s General Stores, Inc.
Condensed Consolidated Statements

of Comprehensive Income

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

(Unaudited)

 
     

Three months ended July 31,

2012       2011
Total revenue $ 1,868,302 $ 1,873,832
Cost of goods sold (exclusive of depreciation

and amortization, shown separately below)

1,581,328

1,607,050

Gross profit 286,974 266,782
Operating expenses 189,399 171,416
Depreciation and amortization 26,536 22,895
Interest, net 8,904 8,934
Income before income taxes 62,135 63,537
Federal and state income taxes 23,104 24,146
Net income $ 39,031 $ 39,391
 
Net and comprehensive income
 
Basic $ 1.02 $ 1.04
 
Diluted $ 1.01 $ 1.03
 
 
Basic weighted average shares outstanding 38,224,608 38,024,376
Plus effect of stock options 345,690 307,838
Diluted weighted average shares outstanding 38,570,298 38,332,214
 
 
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 
   

July 31,

   

April 30,

2012 2012
Assets
Current assets
Cash and cash equivalents $ 89,636 $ 55,919
Receivables 21,254 21,700
Inventories 178,546 170,794
Prepaid expenses 2,637 1,298
Deferred income taxes 13,934 13,143
Income taxes receivable -------- 16,424
Total current assets       306,007       279,278
Other assets, net of amortization 13,114 12,403
Goodwill 104,385 104,385
Property and equipment, net of
accumulated depreciation of $883,372 at
July 31, 2012, and of $860,998 at April 30, 2012 1,421,928 1,378,749
Total assets     $ 1,845,434     $ 1,774,815
 
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 10,740 $ 10,737
Accounts payable 219,944 211,165
Accrued expenses 98,346 84,739
Income taxes payable 2,997 --------
Total current liabilities       332,027       306,641
Long-term debt, net of current maturities 667,745 667,930
Deferred income taxes 265,933 260,405
Deferred compensation 14,797 14,698
Other long-term liabilities 20,187 19,100
Total liabilities 1,300,689 1,268,774
 
Total shareholders' equity 544,745 506,041
   
Total liabilities and shareholders' equity     $ 1,845,434     $ 1,774,815
 

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)

Three months ended         Grocery & Other     Prepared Food        
7/31/12 Gasoline Merchandise & Fountain Other Total
 
Sales $ 1,330,670 $ 386,129 $ 142,709 $ 8,794 $ 1,868,302
Gross profit $ 58,795 $ 128,834 $ 90,565 $ 8,780 $ 286,974
Margin 4.4 % 33.4 % 63.5 % 99.8 % 15.4 %
Gasoline gallons 394,055
 
Three months ended
7/31/11
 
Sales $ 1,377,914 $ 365,171 $ 123,843 $ 6,904 $ 1,873,832
Gross profit $ 65,320 $ 118,729 $ 75,843 $ 6,890 $ 266,782
Margin 4.7 % 32.5 % 61.2 % 99.8 % 14.2 %
Gasoline gallons       380,096                          
 
         
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

F2013 -0.2 % F2013

14.9

¢

F2012 -2.7 -2.9 % -2.4 % 2.5 % -1.5 % F2012 17.2

16.7

¢

13.6

¢

13.7

¢

15.3¢
F2011   1.5     3.6     3.5     -1.9     1.6   F2011   16.4     14.9     13.9     15.6     15.2
         
Grocery & Other Merchandise Grocery & Other Merchandise
Same-store Sales Growth Margin
          Fiscal           Fiscal

Q1

Q2

Q3

Q4

Year

Q1

Q2

Q3

Q4

Year

F2013 2.6 % F2013 33.4 %
F2012 6.2 5.8 % 6.3 % 8.5 % 6.7 % F2012 32.5 32.5 % 31.8 % 33.0 % 32.5 %
F2011   2.0     6.9     5.8     4.8     4.6   F2011   32.8     32.9     30.9     32.1     32.2  
         
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Growth Margin
          Fiscal           Fiscal

Q1

Q2

Q3

Q4

Year

Q1

Q2

Q3

Q4

Year

F2013 10.6 % F2013 63.5 %
F2012 15.3 14.2 % 12.6 % 16.8 % 14.3 % F2012 61.2 59.5 % 61.2 % 60.8 % 60.7 %
F2011   2.4     7.2 %   10.5     11.8     7.7   F2011   63.8     62.7     62.1     60.2     62.2  
 

Corporate information is available at this Web site: http://www.caseys.com . Earnings will be reported during a conference call on September 11, 2012. The call will be broadcast live over the Internet at 9:30 a.m. CDT via the Investor Relations section of our Web site and will be available in an archived format.



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