Strong Sales Drive Casey's First Quarter Results

ANKENY, Iowa--()--Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported diluted earnings per share of $1.34 for the first quarter of fiscal 2015 ended July 31, 2014, compared to $1.43 for the same quarter a year ago. “Strong sales helped offset a $7.2 million reduction in renewable fuel credit values, which impacted diluted earnings per share by almost 12 cents,” said Chairman and CEO Robert J. Myers. “We are off to a great start on our annual goals, and we were able to grow inside gross profit dollars by 12.9% compared to the first quarter of last year.”

Fuel – The Company’s annual goal is to increase same-store gallons sold 1% with an average margin of 15.3 cents per gallon. For the first quarter, same-store gallons sold were up 3% with an average margin of 19.6 cents per gallon. “We continue to experience a lift in gallons sold due to the fuel saver program,” said Myers. “Despite the reduction in renewal credit values, fuel margins are ahead of our expectations so far this year.” The Company sold 12.5 million renewable fuel credits for $5.7 million during the first three months of the year. Total gallons sold for the quarter were up 8.8% to 464.2 million gallons.

Grocery and Other Merchandise – Casey’s annual goal is to increase same-store sales 5.3% with an average margin of 32.1%. For the quarter, same-store sales were up 7.7% with an average margin of 32.5%. “Sales were strong throughout the entire category during the first quarter,” stated Myers. “We experienced slight margin pressure compared to the prior year due to cigarettes, but still grew gross profit dollars by 12.5%.” Gross profit for the quarter was $155.7 million and total sales were $478.6 million.

Prepared Food & Fountain – The goal for fiscal 2015 is to increase same-store sales 9.5% with an average margin of 60%. For the first quarter, same-store sales were up 11.1% with an average margin of 59.9%. “The strategic price increases we implemented at the start of the fiscal year, along with various operational initiatives, are having a positive impact on sales,” said Myers. “Commodity cost pressures, such as cheese and meat, pulled down margin relative to last year, but overall, we are pleased with the gross profit dollar gains made in this category.” Gross profit increased 13.4% to $116.5 million, and total sales for the category were up 17.1% to $194.6 million.

Operating Expenses – For the first quarter, operating expenses were $244.3 million compared to $216 million for the first quarter a year ago, up 13.1%. “The majority of the operating expense increase is related to new and replaced stores, recent store acquisitions, and the various initiatives the Company continues to roll out to drive inside sales,” said Myers.

Expansion – The Company’s annual goal is to build or acquire 72 to 108 stores and replace 25 existing stores. As of the end of the quarter, the Company had opened 7 new stores and acquired 25 stores. The Company also completed 4 replacements. “We completed the Stop-N-Go transaction in May and the integration of that chain is going very well,” said Myers. “We will continue our disciplined approach to acquisitions as the industry continues to consolidate.” The Company currently has 35 new and 17 replacement stores under construction. Additionally, the Company has 8 store acquisitions, 35 new sites, and 35 replacement sites under contract to purchase. Casey’s recently broke ground on the construction of the second distribution center in Terre Haute, Indiana. It is expected to be operational by the end of fiscal 2016.

Dividend – At its September meeting, the Board of Directors declared a quarterly dividend of $0.20 per share. The dividend is payable November 17, 2014 to shareholders of record on November 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 July 31,

2014     2013
Total revenue $ 2,291,186 $ 2,114,749

Cost of goods sold (exclusive of depreciation and amortization, shown separately below)

 

1,917,010

 

1,769,239

Gross profit 374,176 345,510
Operating expenses 244,318 215,974
Depreciation and amortization 36,249 30,501
Interest, net   10,257   9,456
Income before income taxes 83,352 89,579
Federal and state income taxes   31,062   33,869
Net income $ 52,290 $ 55,710
 
Net income per common share
 
Basic $ 1.35 $ 1.45
 
Diluted $ 1.34 $ 1.43
 
 
Basic weighted average shares outstanding 38,616,340 38,393,076
Plus effect of stock options and restricted stock   390,121   434,809
Diluted weighted average shares outstanding   39,006,461   38,827,885
 
 
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 
   

July 31,

   

April 30,

2014 2014
Assets
Current assets
Cash and cash equivalents $ 116,747 $ 121,641
Receivables 30,331 25,841
Inventories 218,403 204,833
Prepaid expenses 2,748 1,478
Deferred income taxes 12,225 11,878
Income taxes receivable   --------   12,473
Total current assets       380,454       378,144
Other assets, net of amortization 16,395 15,947
Goodwill 126,931 120,406

Property and equipment, net of accumulated depreciation of $1,093,305 at July 31, 2014, and of $1,062,278 at April 30, 2014

  1,852,807   1,778,965
Total assets     $ 2,376,587     $ 2,293,462
 
Liabilities and Shareholders' Equity
Current liabilities
Notes payable to bank $ -------- $ --------
Current maturities of long-term debt 427 553
Accounts payable 255,767 250,807
Accrued expenses 119,887 111,583
Income taxes payable   19,900   --------
Total current liabilities       395,981       362,943
Long-term debt, net of current maturities 853,545 853,642
Deferred income taxes 320,136 317,953
Deferred compensation 16,938 16,558
Other long-term liabilities   19,033   22,500
Total liabilities   1,605,633   1,573,596
 
Total shareholders' equity 770,954 719,866
   
Total liabilities and shareholders' equity     $ 2,376,587     $ 2,293,462
 

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
7/31/14 Fuel Merchandise & Fountain Other Total
 
Sales $ 1,607,126 $ 478,586 $ 194,610 $ 10,864 $ 2,291,186
Gross profit $ 91,134 $ 155,683 $ 116,511 $ 10,848 $ 374,176
Margin 5.7 % 32.5 % 59.9 % 99.9 % 16.3 %
 
Fuel gallons 464,214
 
Three months ended
7/31/13
 
Sales $ 1,514,874 $ 423,585 $ 166,248 $ 10,042 $ 2,114,749
Gross profit $ 94,316 $ 138,412 $ 102,754 $ 10,028 $ 345,510
Margin 6.2 % 32.7 % 61.8 % 99.9 % 16.3 %
 
Fuel gallons       426,549                          
 
       
Fuel Gallons Fuel Margin
Same-store Sales Growth (Cents per gallon, excluding credit card fees)
          Fiscal           Fiscal
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
F2015 3.0 % F2015 19.6¢
F2014 3.2 4.2 % 3.8 % 1.8 % 3.1 % F2014 22.1 16.7¢ 14.4¢ 13.8¢ 16.8¢
F2013   -0.2     -0.4     0.6     1.0     0.1   F2013   14.9     14.9     13.8     17.0     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
F2015 7.7 % F2015 32.5 %
F2014 6.1 10.2 % 6.5 % 7.2 % 7.4 % F2014 32.7 32.3 % 31.1 % 32.1 % 32.1 %
F2013   2.6     -0.7     3.2     -0.2     0.8   F2013   33.4     33.4     31.7     31.7     32.6  
 
   
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Growth Margin
Fiscal Fiscal
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
F2015 11.1 % F2015 59.9 %
F2014 11.9 12.3 % 10.7 % 12.1 % 11.8 % F2014 61.8 61.8 % 60.8 % 60.1 % 61.1 %
F2013   10.6     10.1     11.6     4.4     8.6   F2013   63.5     62.5     60.6     60.5     61.8  
 

Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on September 9, 2014. 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.

Contacts

Casey's General Stores, Inc.
Bill Walljasper, 515-965-6505

Contacts

Casey's General Stores, Inc.
Bill Walljasper, 515-965-6505