Casey’s General Stores, Inc. (Nasdaq: CASY) today reported diluted earnings per share of $1.06 for the second quarter of fiscal 2014 ended October 31, 2013, compared to $0.85 for the same quarter a year ago. Year to date, diluted earnings per share were $2.50 compared to $1.86 a year ago. “For the second quarter, total inside sales were up 15.5%, and total gasoline gallons sold increased 9.8% compared to the same quarter a year ago,” said Chairman and CEO Robert J. Myers. “The Company is pleased with the growth and customer count lift associated with the various initiatives we have put in place.”

Gasoline—The goal for fiscal 2014 is to increase same-store gallons sold 1.5% with an average margin of 15 cents per gallon. For the second quarter, same-store gallons sold were up 4.2% with an average margin of 16.7 cents per gallon. “The Company sold 11.7 million renewable fuel credits for $7.6 million in the second quarter, which enabled us to exceed our gas margin goal,” stated Myers. “The fuel saver program implemented in December 2012 continues to drive new customers to our stores which was the primary reason we significantly exceeded our sales goal this quarter.” Total gallons sold for the year were up 9% with an average margin of 19.4 cents per gallon. Year-to-date same-store gallons were up 3.6%.

Grocery and Other Merchandise—The Company’s annual goal is to increase same-store sales 5% with an average margin of 32.3%. For the quarter, same-store sales were up 10.2% with an average margin of 32.3%. “The Company experienced strong lifts in beer and beverage sales, and believe we have gained significant market share with our cigarette retail price adjustments made last fiscal year,” said Myers. “Although the cigarette adjustments adversely impacted our margin compared to the same quarter a year ago, we were still able to increase gross profit 11.1%.” For the six months ended October 31, 2013, same-store sales were up 8% with an average margin of 32.5%. Total sales for the year were up 12.2% and gross profit increased 9.2% to $273.1 million.

Prepared Food and Fountain—Casey’s annual goal is to increase same-store sales 9% with an average margin of 62%. For the second quarter, same-store sales were up 12.3% with an average margin of 61.8%. “Our prepared food sales continue to benefit from various growth initiatives such as 24-hour expansion, pizza delivery, and major remodels,” said Myers. “The margin is slightly below goal due to increased input costs such as meat and supplies.” Total sales for the category were up 16.9% year to date, and gross profit increased 14.7% to $208.9 million.

Operating Expenses—Year to date, operating expenses increased 14% to $433 million. For the second quarter, operating expenses were up 13.9% to $217 million. “The various growth initiatives being implemented, including new store construction, acquisition and replacement activity, are the primary reasons for the lift in operating expenses,” said Myers. “Store level operating expenses for locations that have not been impacted by the initiatives were up 4.9% for the quarter.”

Expansion—The annual goal is to build or acquire 70 to 105 (4 – 6%) stores and replace 20 existing locations. Through the first six months, the Company has built 14 new stores and acquired an additional 22. The Company also completed 14 replacement stores as well as 19 major remodels. “We are pleased with the pace of our new store construction and replacement efforts, and continue to have active dialogue with multiple acquisition candidates,” stated Myers. “As we look ahead to the second half of fiscal 2014, we believe there will be ample opportunities to grow our business in both new and existing markets.” The Company currently has 34 new stores and 14 replacement stores under construction, as well as five stores under written agreement to acquire.

Dividend—At its December meeting, the Board of Directors declared a quarterly dividend of $0.18 per share. The dividend is payable February 17, 2014 to shareholders of record on February 3, 2014.

 

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

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

(Unaudited)
         

Three months ended October 31,

Six months ended October 31,
2013 2012 2013 2012
Total revenue $ 2,015,885 1,911,644 $ 4,130,634 3,779,946
Cost of goods sold (exclusive of

depreciation and amortization,

shown separately below)

 

1,693,584
 

 

1,632,331
 

 

3,462,823
 

 

3,213,659
 
Gross profit 322,301 279,313 667,811 566,287
Operating expenses 216,529 190,040 432,503 379,439
Depreciation and amortization 32,416 27,148 62,917 53,684
Interest, net 9,748   8,637   19,204   17,541  
Income before income taxes 63,608 53,488 153,187 115,623
Federal and state income taxes 22,289   20,629   56,158   43,733  
Net Income $ 41,319   32,859   $ 97,029   71,890  
 
Net income per common share
Basic $ 1.07   .86   $ 2.53   1.88  
Diluted $ 1.06   .85   $ 2.50   1.86  
Basic weighted average shares 38,455,216 38,304,840 38,424,146 38,264,724
Plus effect of stock compensation 432,697   353,690   408,634   354,434  
Diluted weighted average shares 38,887,913   38,658,530   38,832,780   38,619,158  
 
   
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)
 

October 31,

April 30,
2013 2013
Assets
Current assets
Cash and cash equivalents $ 113,268 $ 41,271
Receivables 25,556 20,900
Inventories 199,802 189,514
Prepaid expenses 2,195 1,396
Deferred income taxes 11,891 9,916
Income tax receivable

--------
  9,820  
Total current assets     352,712       272,817  
Other assets, net of amortization 15,169 14,485
Goodwill 119,756 114,791

Property and equipment, net of accumulated depreciation of $1,002,366 at October 31, 2013, and of $952,286 at April 30, 2013
1,698,698   1,581,925  
Total assets   $ 2,186,335     $ 1,984,018  
 
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank $

--------
$ 59,100
Current maturities of long-term debt 8,315 15,810
Accounts payable 230,286 232,913
Accrued expenses 102,931 89,925
Income taxes payable 1,469  

--------
 
Total current liabilities     343,001       397,748  
Long-term debt, net of current maturities 803,820 653,081
Deferred income taxes 306,885 293,708
Deferred compensation 16,257 15,787
Other long-term liabilities 24,224   21,399  
Total liabilities 1,494,187   1,381,723  
 
Total shareholders' equity 692,148 602,295
       
Total liabilities and shareholders' equity   $ 2,186,335     $ 1,984,018  
 

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        
10/31/13 Gasoline Merchandise & Fountain Other Total
 
Sales $ 2,931,854 $ 840,137 $ 337,999 $ 20,644 $ 4,130,634
Gross profit $ 165,149 $ 273,119 $ 208,925 $ 20,618 $ 667,811
Margin 5.6% 32.5% 61.8% 99.9% 16.2%
 
Gasoline gallons 850,444
 
Six months ended
10/31/12
 
Sales $ 2,724,146 $ 748,791 $ 289,248 $ 17,761 $ 3,779,946
Gross profit $ 116,429 $ 250,040 $ 182,080 $ 17,738 $ 566,287
Margin 4.3% 33.4% 62.9% 99.9% 15.0%
 
Gasoline gallons       780,268                        
 
 
Gasoline Gallons
Same-store Sales Growth
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014 3.2 % 4.2 %
F2013 -0.2 -0.4 0.6 % 1.0 % 0.1 %
F2012   -2.7     -2.9     -2.4     2.5     -1.5  
 
Gasoline Margin
(Cents per gallon, excluding credit card fees)
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014

22.1

¢

16.7

¢
F2013 14.9 14.9

13.8

¢

17.0

¢

15.2

¢
F2012   17.2     16.7     13.6     13.7     15.3  
 
 
Grocery & Other Merchandise
Same-store Sales Growth
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014 6.1 % 10.2 %
F2013 2.6 -0.7 3.2 % -0.2 % 0.8 %
F2012   6.2     5.8     6.3     8.5     6.7  
 
 
Grocery & Other Merchandise
Margin
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014 32.7 % 32.3 %
F2013 33.4 33.4 31.7 % 31.7 % 32.6 %
F2012   32.5     32.5     31.8     33.0     32.5  
 
 
Prepared Food & Fountain
Same-store Sales Growth
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014 11.9 % 12.3 %
F2013 10.6 10.1 11.6 % 4.4 % 8.6 %
F2012   15.3     14.2     12.6     16.8     14.3  
 
 
Prepared Food & Fountain
Margin
          Fiscal

Q1

Q2

Q3

Q4

Year
F2014 61.8 % 61.8 %
F2013 63.5 62.5 60.6 % 60.5 % 61.8 %
F2012   61.2     59.5     61.2     60.8     60.7  
 

Corporate information is available at this Web site: http://www.caseys.com . Earnings will be reported during a conference call on December 10, 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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