Casey's Strong Prepared Food Performance Offsets Cigarette Challenges

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Casey's Strong Prepared Food Performance Offsets Cigarette Challenges

ANKENY, Iowa--(BUSINESS WIRE)-- Casey's General Stores, Inc. (NAS: CASY) today reported $0.85 in diluted earnings per share for the second quarter of fiscal 2013 ended October 31, 2012 compared to $0.98 for the same period a year ago. Year to date, diluted earnings per share were $1.86 versus $2.01 for the same period last year. Both the quarter and year-to-date earnings were impacted by lower gas margins when compared to the all-time high gas margins from the same periods a year ago. "Our prepared food program is doing exceptionally well, but the cigarette environment remains very challenging for retailers," said Chairman and CEO Robert J. Myers. "We are diligently evaluating the competitive landscape and will maintain a disciplined approach when making cigarette price adjustments."

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 second quarter, same-store gallons sold were down 0.4% with an average margin of 14.9 cents per gallon. "We believe higher retail prices had an adverse impact to sales, however the gas margin environment has been favorable when compared to our annual goal." said Myers. Total gallons sold for the year were up 3.2% with an average margin of 14.9 cents per gallon. Year-to-date same store gallons sold were down 0.3%.


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 second quarter, same-store sales were down 0.7% with an average margin of 33.4%. "Cigarettes have been adversely impacted by competitive pricing as well as an Illinois state excise tax increase," stated Myers. "However, the grocery & other merchandise margin is above goal primarily due to a more favorable product mix within the category." For the six months ended October 31, 2012, same-store sales were up 0.7% with an average margin of 33.4%. Total sales for the year were up 3.6% and gross profit increased 6.4% to $250 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 10.1% with an average margin of 62.5%. "This category continues to benefit from three primary operating initiatives: expanded hours, pizza delivery, and major store remodels," said Myers. "The margin continues to exceed our annual goal primarily due to an increase in pizza sales." Year to date, total sales were up 14.5% and gross profit rose 19.4% to $182.1 million.

Operating Expenses—Year to date, operating expenses increased 10.5% to $379.4 million. For the second quarter, operating expenses were up 10.6%. Expenses were impacted by the operating initiatives mentioned above, operating 27 more stores than a year ago, and the completion of 20 replacement stores in the last 12 months. "So far this fiscal year we have converted 150 stores to 24-hour operation, added pizza delivery to 103 stores, and completed 51 major remodels," stated Myers. "We will continue to implement these initiatives where we believe we can drive cash flow." Store-level operating expenses for locations not impacted by the initiatives were up approximately 3.5% for the quarter.

Expansion—The annual goal is to increase the total number of stores 4-6%. At the mid-year point, the Company opened 8 new store constructions and completed the acquisition of 3 stores. The Company has also replaced 13 stores. "In November we completed the acquisition of 22 Kum and Go locations and opened our first stores in Tennessee and North Dakota," stated Myers. "We are on pace to build 30 new stores this fiscal year and continue to be optimistic with the acquisition environment." Casey's currently has 13 stores under construction and has 8 stores under written agreement to acquire.

Dividend—At its December meeting, the Board of Directors declared a quarterly dividend of $0.165 per share. The dividend is payable February 15, 2013 to shareholders of record on February 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 October 31, Six months ended October 31,
 2012 20112012 2011
Total revenue$1,911,6441,782,518$3,779,9463,656,350
Cost of goods sold (exclusive of
depreciation and amortization,
shown separately below)1,632,3311,519,6003,213,6593,126,650
Gross profit279,313262,918566,287529,700
Operating expenses190,040171,832379,439343,248
Depreciation and amortization27,14823,43253,68446,327
Interest, net8,6378,77717,54117,711
Income before income taxes53,48858,877115,623122,414
Federal and state income taxes20,62921,24543,73345,391
Net Income32,85937,63271,89077,023
Other comprehensive income--------------------
Comprehensive income$32,85937,632$71,89077,023
 
Net income per common share
Basic$.86.99$1.882.02
Diluted$.85.98$1.862.01
Basic weighted average shares
outstanding38,304,84038,055,90938,264,72438,040,142
Plus effect of stock compensation353,690342,934354,434328,239
Diluted weighted average shares
outstanding38,658,53038,398,84338,619,15838,368,381
 

Casey's General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

  

October 31,

April 30,

20122012
Assets
Current assets
Cash and cash equivalents$39,327$55,919
Receivables21,28421,700
Inventories178,298170,794
Prepaid expenses2,0321,298
Deferred income taxes10,60413,143
Income tax receivable8,28616,424
Total current assets  259,831  279,278
Other assets, net of amortization13,38512,403
Goodwill104,686104,385
Property and equipment, net of
accumulated depreciation of $901,517 at
October 31, 2012, and of $860,998 at April 30, 20121,483,6591,378,749
Total assets $1,861,561 $1,774,815
 
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt$13,244$10,737
Accounts payable215,213211,165
Accrued expenses86,27284,739
Total current liabilities  314,729  306,641
Long-term debt, net of current maturities660,055667,930
Deferred income taxes278,092260,405
Deferred compensation15,04414,698
Other long-term liabilities21,12819,100
Total liabilities1,289,0481,268,774
 
Total shareholders' equity572,513506,041
  
Total liabilities and shareholders' equity $1,861,561 $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)

     
Six months endedGrocery & OtherPrepared Food
10/31/12GasolineMerchandise& FountainOtherTotal
 
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
Margin4.3%33.4%62.9%99.9%15.0%
 
Gasoline gallons780,268
 
Six months ended
10/31/11
 
Sales$2,666,412$722,987$252,681$14,270$3,656,350
Gross profit$128,009$234,950$152,501$14,240$529,700
Margin4.8%32.5%60.4%99.8%14.5%
 
Gasoline gallons  755,911        
 
                 
Gasoline GallonsGasoline 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%F2013

14.9

¢

14.9

¢

F2012-2.7-2.9-2.4%2.5%-1.5%F201217.216.7

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 MerchandiseGrocery & Other Merchandise
Same-store Sales GrowthMargin
FiscalFiscal

Q1

Q2

Q3

Q4

Year

Q1

Q2

Q3

Q4

Year

F20132.6%-0.7%F201333.4%33.4%
F20126.25.86.3%8.5%6.7% Read Full Story

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