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TheStreet Open House

Casey's Opens 28 Stores In The Quarter, Positioned Well For Future Growth

Stocks in this article: CASY

Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported $0.40 in diluted earnings per share for the third quarter of fiscal 2013 ended January 31, 2013 compared to $0.43 for the same period a year ago. Year-to-date diluted earnings per share was $2.26 versus $2.44 for the same period last year. “The quarter was adversely impacted by a challenging cigarette environment,” said Chairman and CEO Robert J. Myers. “However we did experience improved cigarette sales throughout the third quarter and continue to drive prepared food sales with several operational initiatives being implemented within our store base.”

Gasoline—The Company’s annual goal is to increase same-store gallons sold 1% with an average margin of 14.0 cents per gallon. For the third quarter, same-store gallons sold were up 0.6% with an average margin of 13.8 cents per gallon. “The retail price of fuel was in-line with the prior year’s third quarter, which helped improve same-store gallons sold,” said Myers. For the first nine months of the fiscal year, total gallons sold were up 3.6% with an average margin of 14.6 cents per gallon. Year-to-date same-store gallons sold were flat compared to prior year.

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 3.2% with an average margin of 31.7%. “Cigarette sales stabilized in the third quarter due to retail price adjustments made throughout the fiscal year,” stated Myers. “Although these adjustments adversely impacted our overall margin, the margin decline was partially offset by a more favorable product mix within the grocery and other merchandise category.” For the nine months ended January 31, 2013, same-store sales were up 1.3% with an average margin of 32.9%. Total sales for the year are up 4.3% and gross profit increased 6.2% to $354.7 million.

Prepared Food and Fountain—The goal for fiscal 2013 is to increase same-store sales 11% with an average margin of 61.1%. For the quarter, same-store sales were up 11.6% with an average margin of 60.6%. “An increase in cheese prices coupled with some other input cost increases pulled the margin back this quarter,” said Myers. “Fortunately same-store sales continue to perform well due in part to expanded 24-hour operations, pizza delivery, and major remodels.” For the year, same-store sales were up 10.2% with an average margin of 62.2%. Year-to-date, total sales were up 14.8% and gross profit rose 17.7% to $265.1 million.

Operating Expenses—Year to date, operating expenses increased 11.1% to $569.3 million. For the third quarter, operating expenses were up 12.2%. Included in the third quarter results was a $1.1 million impairment charge stemming from the planned closure of several stores in a recent acquisition. “The majority of the operating expense increase for both the quarter and year were from newly built, acquired and replaced stores over the past two fiscal years, along with the continued roll-out of 24-hour stores, pizza delivery, and major remodels,” stated Myers. Store-level operating expenses for locations not impacted by the initiatives were up approximately 3.8% for the quarter and 4% for the first nine months.

Expansion—The annual goal is to increase the total number of stores 4-6%. Through the first nine months of the fiscal year, the Company opened 18 newly constructed stores and 21 acquired stores. The Company also replaced 22 stores. “We will continue to update and improve our existing store base while maintaining our steady growth of new and acquired stores,” said Myers. Casey’s currently has 21 new stores and 12 replacement stores under construction, as well as 10 stores under written agreement to acquire. The Company also has 50 new sites and 25 replacement sites under contract to purchase.

Dividend—At its March meeting, the Board of Directors declared a quarterly dividend of $0.165 per share. The dividend is payable May 15, 2013 to shareholders of record on May 1, 2013.

 
 
Casey’s General Stores, Inc.
Condensed Consolidated Statements
of Comprehensive Income

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

(Unaudited)

               

Three months ended January 31,

Nine months ended January 31,

2013 2012 2013 2012
Total revenue $ 1,662,365 1,578,950 $ 5,442,311 5,235,300
Cost of goods sold (exclusive of

depreciation and amortization,

shown separately below)

 

1,412,679

 

1,350,200

 

4,626,338

 

4,476,850

Gross profit 249,686 228,750 815,973 758,450
Operating expenses 189,872 169,231 569,311 512,479
Depreciation and amortization 28,229 24,616 81,913 70,943
Interest, net 8,764 8,730 26,305 26,441
Income before income taxes 22,821 26,173 138,444 148,587
Federal and state income taxes 7,358 9,474 51,091 54,865
Net income 15,463 16,699 87,353 93,722
Other comprehensive income ------ ----- ----- -----
Comprehensive income $ 15,463 16,699 $ 87,353 93,722
 
Net income per common share
Basic $ .40 .44 $ 2.28 2.46
Diluted $ .40 .43 $ 2.26 2.44
Basic weighted average shares

outstanding

38,317,140

38,071,742

38,282,196

38,050,676

Plus effect of stock compensation 304,948 383,394 331,934 342,826
Diluted weighted average shares

outstanding

38,622,088

38,455,136

38,614,130

38,393,502

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

(Dollars in thousands)

(Unaudited)

 
   

January 31,

   

April 30,

2013 2012
Assets
Current assets
Cash and cash equivalents $ 26,521 $ 55,919
Receivables 19,790 21,700
Inventories 185,126 170,794
Prepaid expenses 1,953 1,298
Deferred income taxes 10,603 13,143
Income tax receivable 16,563 16,424
Total current assets       260,556       279,278
Other assets, net of amortization 13,931 12,403
Goodwill 114,661 104,385
Property and equipment, net of
accumulated depreciation of $926,087 at
January 31, 2013, and $860,998 at April 30, 2012 1,545,312 1,378,749
Total assets     $ 1,934,460     $ 1,774,815
 
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank $ 58,600 $ -----
Current maturities of long-term debt 13,307 10,737
Accounts payable 197,245 211,165
Accrued expenses 97,005 84,739
Total current liabilities       366,157       306,641
Long-term debt, net of current maturities 660,779 667,930
Deferred income taxes 286,963 260,405
Deferred compensation 15,326 14,698
Other long-term liabilities 21,749 19,100
Total liabilities 1,350,974 1,268,774
 
Total shareholders' equity 583,486 506,041
   
Total liabilities and shareholders' equity     $ 1,934,460     $ 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)

                 
Nine months ended Grocery & Other Prepared Food
1/31/13 Gasoline Merchandise & Fountain Other Total
 
Sales $ 3,909,787 $ 1,078,448 $ 426,282 $ 27,794 $ 5,442,311
Gross profit $ 168,431 $ 354,700 $ 265,091 $ 27,751 $ 815,973
Margin 4.3% 32.9% 62.2% 99.8% 15.0%
 
Gasoline gallons 1,157,077
 
Nine months ended
1/31/12
 
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                        
 
         
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 % -0.4 % 0.6 % F2013

14.9

¢

14.9

¢

13.8

¢

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 % -0.7 % 3.2 % F2013 33.4 % 33.4 % 31.7 %
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 % 10.1 % 11.6 % F2013 63.5 % 62.5 % 60.6 %
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 March 12, 2013. 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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