Casey's General Stores, Inc. (Nasdaq: CASY) today reported diluted earnings per share of $2.00 for the second quarter of fiscal 2016 ended October 31, 2015, compared to $1.28 per share for the same quarter a year ago. Year to date, diluted earnings per share were $3.57 versus $2.56 a year ago. "Casey's experienced significant sales growth in all major areas of our business, especially inside our stores," stated Chairman and CEO Robert J. Myers. "Second quarter inside sales were up 11.6% while total fuel gallons sold were up 7.7%. The positive sales performance, along with a strong prepared food and fuel margin, drove gross profit dollars up 19.3% for the quarter."

Fuel - The Company's annual goal for fiscal 2016 is to increase same-store gallons sold 2% with an average margin of 16.7 cents per gallon. For the second quarter, same-store gallons sold were up 3.3% with an average margin of 24.7 cents per gallon. The Company sold 13.6 million renewable fuel credits for $4.7 million during the second quarter. "Same-store gallons during the quarter continued to benefit from lower fuel prices," said Myers. "We also experienced a fuel margin well ahead of our annual goal due primarily to volatile wholesale costs during the quarter." For the year, total gallons sold were up 7.8% to 997.4 million gallons with an average margin of 21.1 cents per gallon, while gross profit dollars rose 18.5%. Same-store gallons for the year were up 3.3%.

Grocery and Other Merchandise - Casey's annual goal for fiscal 2016 is to increase same-store sales 6.2% with an average margin of 32.1%. For the second quarter, same-store sales were up 7.5% with an average margin of 31.5%. The Company experienced double-digit sales increases across nearly all major areas of this category, resulting in a 10.6% increase in total sales in the second quarter. "Packaged beverage and tobacco sales continued their solid performance as we expand our cooler capacity throughout our store base and customers trade up to premium brands," stated Myers. For the six months ended October 31, 2015, same-store sales were up 7.2% with an average margin of 32.1%. Total sales for the year were up 10.3% to $1.04 billion, while gross profit dollars rose 9.0%.

Prepared Food and Fountain - The goal for fiscal 2016 is to increase same-store sales 10.4% with an average margin of 60.8%. Same-store sales for the quarter were up 9.4% with an average margin of 63.4%. The margin was up 410 basis points primarily due to lower commodity costs compared to the same time a year ago. "Same-store sales benefited from the continued rollout of our primary store initiatives," said Myers. "We are optimistic about the future growth in this category especially as we complete the implementation of online ordering later this month in all of our stores. The online ordering service will give our customers the ability to conveniently order pizza, made-to-order sub sandwiches, and appetizers." Year to date, total sales were up 14.4% to $452.8 million compared to the first six months last year, and gross profit dollars were up 20.9% to $285.2 million. Year to date, same-store sales were up 9.8%.

Operating Expenses - Year to date, operating expenses increased 8.7% to $531.6 million. For the quarter, operating expenses were up 9.5%. "The increase was primarily due to operating 48 more stores this year compared to a year ago in the same period and the continued rollout of various operational initiatives," said Myers. "These increases were offset by a $1.3 million decrease in the quarter for transportation costs due to lower fuel prices."

Expansion - The Company's annual goal is to build or acquire 75 to 113 stores, replace 10 existing locations and perform 100 major remodels. At the mid-year point, the Company had acquired 1 store and completed 25 new-store constructions. The Company has also completed 11 replacements and 24 major remodels. "We are on pace to build approximately 50 stores and remodel 100 stores by the end of the fiscal year," said Myers. "We will continue to remain patient with acquisitions and remain optimistic about our long-term growth opportunities as our second distribution center becomes operational in February 2016."

Dividend - At its December meeting, the Board of Directors declared a quarterly dividend of $0.22 per share. The dividend is payable February 15, 2016 to shareholders of record on February 1, 2016.
   

Casey's General Stores, Inc.

Condensed Consolidated

Statements of Income

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

(Unaudited)
 
Three Months EndedOctober 31, Six Months EndedOctober 31,
2015   2014 2015   2014
Total revenue $ 1,924,600 $ 2,150,211 $ 3,973,192 $ 4,441,397
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)   1,481,610   1,778,929   3,118,960   3,699,201
Gross profit 442,990 371,282 854,232 742,196
Operating expenses 267,978 244,781 531,560 489,099
Depreciation and amortization 41,807 37,275 81,206 73,524
Interest, net   10,009   10,360   20,093   20,866
Income before income taxes 123,196 78,866 221,373 158,707
Federal and state income taxes   44,163   28,997   80,534   58,741
Net income $ 79,033 $ 49,869 $ 140,839 $ 99,966
Net income per common share
Basic $ 2.03 $ 1.29 $ 3.61 $ 2.59
Diluted $ 2.00 $ 1.28 $ 3.57 $ 2.56
Basic weighted average shares 39,002,546 38,706,611 38,987,530 38,668,453
Plus effect of stock compensation   423,747   352,056   419,687   348,522
Diluted weighted average shares   39,426,293   39,058,667   39,407,217   39,016,975

The previously announced revisions to our financial results regarding an immaterial correction of an error for the fiscal 2015 first quarter are reflected in prior period year-to-date results.
   

Casey's General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)
 
October 31, 2015 April 30, 2015
Assets
Current assets
Cash and cash equivalents $ 65,580 $ 48,541
Receivables 31,925 22,609
Inventories 204,277 197,331
Prepaid expenses 2,863 2,025
Deferred income taxes 17,704 15,531
Income tax receivable     19,223
Total current assets   322,349   305,260
Other assets, net of amortization 18,549 18,295
Goodwill 127,046 127,046
Property and equipment, net of accumulated depreciation of $1,255,658 at October 31, 2015 and $1,185,246 at April 30, 2015   2,162,869   2,019,364
Total assets $ 2,630,813 $ 2,469,965
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank $ $
Current maturities of long-term debt 15,393 15,398
Accounts payable 246,055 226,577
Accrued expenses 125,207 122,914
Income taxes payable   12,721  
Total current liabilities   399,376   364,889
Long-term debt, net of current maturities 830,553 838,245
Deferred income taxes 353,955 354,973
Deferred compensation 17,639 17,645
Other long-term liabilities   19,882   18,984
Total liabilities   1,621,405   1,594,736
Total shareholders' equity   1,009,408   875,229
Total liabilities and shareholders' equity $ 2,630,813 $ 2,469,965

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.
 
Revenue and Gross Profit by Product (Amounts in thousands)
         
Three months ended 10/31/2015 Fuel

Grocery & OtherMerchandise
Prepared Food

& Fountain
Other Total
Revenue $ 1,166,736 $ 516,578 $ 229,388 $ 11,898 $ 1,924,600
Gross profit $ 122,690 $ 162,904 $ 145,513 $ 11,883 $ 442,990
Margin 10.5 % 31.5 % 63.4 % 99.9 % 23.0 %
Fuel gallons 496,226

Three months ended 10/31/2014
Revenue $ 1,470,768 $ 466,934 $ 201,196 $ 11,313 $ 2,150,211
Gross profit $ 89,637 $ 151,025 $ 119,322 $ 11,298 $ 371,282
Margin 6.1 % 32.3 % 59.3 % 99.9 % 17.3 %
Fuel gallons 460,740
 
Revenue and Gross Profit by Product (Amounts in thousands)
 
Six months ended 10/31/2015 Fuel Grocery & Other

Merchandise
Prepared Food

& Fountain
Other Total
Revenue $ 2,452,977 $ 1,043,198 $ 452,770 $ 24,247 $ 3,973,192
Gross profit $ 210,371 $ 334,453 $ 285,193 $ 24,215 $ 854,232
Margin 8.6 % 32.1 % 63.0 % 99.9 % 21.5 %
Fuel gallons 997,395
Six months ended 10/31/2014
Revenue $ 3,077,895 $ 945,520 $ 395,807 $ 22,175 $ 4,441,397
Gross profit $ 177,506 $ 306,710 $ 235,834 $ 22,146 $ 742,196
Margin 5.8 % 32.4 % 59.6 % 99.9 % 16.7 %
Fuel gallons 924,954
 
     
Fuel Gallons Fuel Margin
Same-store Sales Growth (Cents per gallon, excluding credit card fees)
    Q1   Q2   Q3   Q4   Fiscal

Year
    Q1   Q2   Q3   Q4   Fiscal

Year
F2016 3.4 % 3.3 % F2016

17.5

¢

24.7

¢
F2015 3.0 2.3 2.2 % 3.5 % 2.6 % F2015 18.9 19.5

22.0

¢

16.9

¢

19.3

¢
F2014 3.2 4.2 3.8 1.8 3.1 F2014 21.4 16.0 13.6 13.1 16.1
 
Grocery & Other Merchandise Grocery & Other Merchandise
Same-store Sales Growth Margin
Q1 Q2 Q3 Q4 Fiscal

Year
Q1 Q2 Q3 Q4 Fiscal

Year
F2016 7.0 % 7.5 % F2016 32.6 % 31.5 %
F2015 7.7 6.6 7.7 % 9.7 % 7.8 % F2015 32.5 32.3 31.2 % 32.1 % 32.1 %
F2014 6.1 10.2 6.5 7.2 7.4 F2014 32.7 32.3 31.1 32.1 32.1
 
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Growth Margin
Q1 Q2 Q3 Q4 Fiscal

Year
Q1 Q2 Q3 Q4 Fiscal

Year
F2016 10.3 % 9.4 % F2016 62.5 % 63.4 %
F2015 11.1 11.1 14.1 % 13.5 % 12.4 % F2015 59.9 59.3 58.7 % 60.9 % 59.7 %
F2014 11.9 12.3 10.7 12.1 11.8 F2014 61.8 61.8 60.8 60.1 61.1

Corporate information is available at this Web site: http://www.caseys.com . Earnings will be reported during a conference call on December 8, 2015. 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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