Casey's Posts Solid Results Despite Challenging Quarter

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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