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Casey's Announces First Quarter Results

Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq: CASY) a leading convenience store chain in the United States, today announced financial results for the three months ended July 31, 2022.

First Quarter Key Highlights

  • Diluted EPS of $4.09, up 28% from the same period a year ago.
  • Inside same-store sales increased 6.3% compared to prior year with a margin of 39.8%. Total inside gross profit increased 8.8% to $504.3 million compared to the prior year.
  • Fuel gallons decreased 2.3% on a same-store basis compared to prior year with a fuel margin of 44.7 cents per gallon. Total fuel gross profit increased 31.4% to $308.2 million compared to the prior year.
  • Same-store operating expense excluding credit card fees were up 2.6%, favorably impacted by a 2% reduction in same-store labor hours.

“Casey's delivered another strong quarter to its shareholders due to strong inside sales and robust fuel margin,” said Darren Rebelez, President and CEO. “Inside same-store sales were driven by prepared food and dispensed beverages, most notably pizza slices, our refreshed breakfast menu, as well as cold dispensed beverages. Alcoholic beverage sales remain strong as our team continues to leverage our approximately 1,500 liquor licenses throughout our store base. The fuel margin environment was especially favorable in the second half of the quarter as wholesale costs declined from record highs. Our differentiated business model enables us to perform well in a variety of economic conditions, and we are confident in our ability to execute on our long-term strategic plan.”

Earnings

 

Three Months Ended July 31,

 

2022

 

2021

Net income (in thousands)

$

152,932

 

$

119,159

Diluted earnings per share

$

4.09

 

$

3.19

Adjusted EBITDA (in thousands)

$

293,209

 

$

243,189

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document), were up compared to the same period a year ago as higher profitability both inside the store and in fuel was partially offset by higher operating expenses due to operating 74 additional stores as well as increased credit card fees resulting from the record high retail price of fuel.

Inside

 

Three Months Ended July 31,

 

2022

 

2021

Inside sales (in thousands)

$

1,266,617

 

 

$

1,143,925

 

Inside same-store sales

 

6.3

%

 

 

8.0

%

Grocery and general merchandise same-store sales

 

5.5

%

 

 

7.0

%

Prepared food and dispensed beverage same-store sales

 

8.4

%

 

 

10.8

%

Inside gross profit (in thousands)

$

504,260

 

 

$

463,514

 

Inside margin

 

39.8

%

 

 

40.5

%

Grocery and general merchandise margin

 

33.9

%

 

 

33.0

%

Prepared food and dispensed beverage margin

 

55.6

%

 

 

61.0

%

Total inside sales were up 10.7% for the quarter driven by strong performance in prepared food items including pizza slices, hot breakfast sandwiches and burritos, as well as non-alcoholic and alcoholic beverages, salty snacks and candy from the grocery and general merchandise category. Inside margin was down 70 basis points compared to the same quarter a year ago. Grocery and general merchandise margin was positively impacted by joint business planning with our vendor partners and strategic retail price adjustments, offset by higher prepared food and dispensed beverage ingredient costs, notably cheese.

Fuel1

 

Three Months Ended July 31,

 

2022

 

2021

Fuel gallons sold (in thousands)

 

689,467

 

 

 

667,534

 

Same-store gallons sold

 

(2.3

) %

 

 

9.0

%

Fuel gross profit (in thousands)

$

308,188

 

 

$

234,474

 

Fuel margin (cents per gallon, excluding credit card fees)

 

44.7

¢

 

 

35.1

¢

Total gallons increased 3.3% compared to the prior year due to the store count increase while same-store gallons sold were down 2.3% versus the prior year, as volumes were impacted by high retail fuel prices. The Company’s total fuel gross profit was up 31.4% versus the prior first quarter given the favorable environment due to falling wholesale costs. The Company sold $17.7 million in renewable fuel credits (RINs) in the first quarter, a decrease of $1.0 million from the same quarter in the prior year.

___________________________
1 Fuel category does not include wholesale fuel activity, which is included in Other.

Operating Expenses

 

Three Months Ended July 31,

 

2022

 

2021

Operating expenses (in thousands)

$

543,271

 

 

$

478,928

 

Credit card fees (in thousands)

$

67,277

 

 

$

49,443

 

Same-store operating expense excluding credit card fees

 

2.6

%

 

 

17.6

%

Operating expenses increased 13.4% during the first quarter. Approximately 4% of the increase is due to operating 74 more stores than prior year. Approximately 3% of the change is due to an increase in same-store credit card fees from higher retail fuel prices and 2% is due to higher long-term incentive compensation. Same-store operating expense excluding credit card fees was up 2.6% aided in part by a 2% reduction in same-store labor hours.

Expansion

 

Store Count

Stores at 4/30/2022

2,452

New store construction

2

Acquisitions

1

Acquisitions not opened

(1)

Prior acquisitions opened

1

Closed

(1)

Stores at 7/31/2022

2,454

Liquidity

At July 31, 2022, the Company had approximately $781 million in available liquidity, consisting of approximately $312 million in cash and cash equivalents on hand and $469 million in undrawn borrowing capacity on existing lines of credit.

Share Repurchase

The Company has $400 million remaining under its existing share repurchase authorization. There were no repurchases made against that authorization in the first quarter.

Dividend

At its August meeting, the Board of Directors voted to pay a quarterly dividend of $0.38 per share. The dividend is payable November 15, 2022 to shareholders of record on November 1, 2022.

Fiscal 2023 Outlook

The Company's fiscal 2023 outlook previously disclosed remains unchanged. The Company expects same-store inside sales to increase 4% to 6% and maintain an inside margin of approximately 40%. The Company expects same-store fuel gallons to be flat to 2% higher. Total operating expenses are expected to increase approximately 9% to 10%. The Company expects to add approximately 80 stores in fiscal 2023, and expects to exceed our stated three year commitment of 345 units. Interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $320 million and the purchase of property plant and equipment is expected to be approximately $450 to $500 million, including approximately $135 million in one-time store remodel costs for recently acquired stores. The tax rate is expected to be approximately 24% to 26% for the year.

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

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

(Unaudited)

 

 

Three Months Ended July 31,

 

2022

 

2021

Total revenue

$

4,454,644

 

$

3,181,994

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

 

3,618,394

 

 

2,458,107

Operating expenses

 

543,271

 

 

478,928

Depreciation and amortization

 

76,295

 

 

75,888

Interest, net

 

13,816

 

 

13,730

Income before income taxes

 

202,868

 

 

155,341

Federal and state income taxes

 

49,936

 

 

36,182

Net income

$

152,932

 

$

119,159

Net income per common share

 

 

 

Basic

$

4.11

 

$

3.21

Diluted

$

4.09

 

$

3.19

Basic weighted average shares

 

37,222,943

 

 

37,126,060

Plus effect of stock compensation

 

186,762

 

 

209,377

Diluted weighted average shares

 

37,409,705

 

 

37,335,437

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

July 31, 2022

 

April 30, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

312,364

 

$

158,878

Receivables

 

145,887

 

 

108,028

Inventories

 

399,138

 

 

396,199

Prepaid expenses

 

24,363

 

 

17,859

Income taxes receivable

 

21,102

 

 

44,071

Total current assets

 

902,854

 

 

725,035

Other assets, net of amortization

 

184,606

 

 

187,219

Goodwill

 

612,934

 

 

612,934

Property and equipment, net of accumulated depreciation of $2,497,846 at July 31, 2022 and $2,425,709 at April 30, 2022

 

3,978,747

 

 

3,980,542

Total assets

$

5,679,141

 

$

5,505,730

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt and finance lease obligations

$

33,562

 

$

24,466

Accounts payable

 

618,931

 

 

588,783

Accrued expenses

 

284,890

 

 

291,429

Total current liabilities

 

937,383

 

 

904,678

Long-term debt and finance lease obligations, net of current maturities

 

1,639,177

 

 

1,663,403

Deferred income taxes

 

545,199

 

 

520,472

Deferred compensation

 

12,674

 

 

12,746

Insurance accruals, net of current portion

 

28,475

 

 

27,957

Other long-term liabilities

 

136,187

 

 

135,636

Total liabilities

 

3,299,095

 

 

3,264,892

Total shareholders’ equity

 

2,380,046

 

 

2,240,838

Total liabilities and shareholders’ equity

$

5,679,141

 

$

5,505,730

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

 

Three months ended July 31,

 

2022

 

2021

Cash flows from operating activities:

 

 

 

Net income

$

152,932

 

 

$

119,159

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

76,295

 

 

 

75,888

 

Amortization of debt issuance costs

 

345

 

 

 

359

 

Share-based compensation

 

16,185

 

 

 

8,623

 

Loss (gain) on disposal of assets and impairment charges

 

230

 

 

 

(1,770

)

Deferred income taxes

 

24,727

 

 

 

33,460

 

Changes in assets and liabilities:

 

 

 

Receivables

 

(37,859

)

 

 

(18,511

)

Inventories

 

(2,899

)

 

 

(26,624

)

Prepaid expenses

 

(6,504

)

 

 

(5,264

)

Accounts payable

 

34,799

 

 

 

65,727

 

Accrued expenses

 

(7,865

)

 

 

(12,035

)

Income taxes

 

23,953

 

 

 

1,531

 

Other, net

 

1,867

 

 

 

1,016

 

Net cash provided by operating activities

 

276,206

 

 

 

241,559

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(82,070

)

 

 

(45,045

)

Payments for acquisition of businesses, net of cash acquired

 

(1,065

)

 

 

(617,291

)

Proceeds from sales of assets

 

5,019

 

 

 

18,001

 

Net cash used in investing activities

 

(78,116

)

 

 

(644,335

)

Cash flows from financing activities:

 

 

 

Proceeds from long-term debt

 

 

 

 

300,000

 

Payments of long-term debt

 

(15,998

)

 

 

(4,867

)

Payments of debt issuance costs

 

 

 

 

(249

)

Proceeds from exercise of stock options

 

 

 

 

133

 

Payments of cash dividends

 

(13,128

)

 

 

(12,609

)

Tax withholdings on employee share-based awards

 

(15,478

)

 

 

(17,249

)

Net cash (used in) provided by financing activities

 

(44,604

)

 

 

265,159

 

Net increase (decrease) in cash and cash equivalents

 

153,486

 

 

 

(137,617

)

Cash and cash equivalents at beginning of the period

 

158,878

 

 

 

336,545

 

Cash and cash equivalents at end of the period

$

312,364

 

 

$

198,928

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

 

Three months ended July 31,

 

2022

 

2021

Cash paid during the period for:

 

 

 

Interest, net of amount capitalized

$

8,689

 

$

7,914

Income taxes, net

 

 

 

Noncash investing and financing activities:

 

 

 

Purchased property and equipment in accounts payable

 

42,008

 

 

22,007

Right-of-use assets obtained in exchange for new finance lease liabilities

 

736

 

 

47,775

Right-of-use assets obtained in exchange for new operating lease liabilities

 

 

 

39,021

Summary by Category (Amounts in thousands)

Three months ended July 31, 2022

Fuel

 

Grocery &

General

Merchandise

 

Prepared Food

& Dispensed

Beverage

 

Other

 

Total

Revenue

$

3,096,342

 

 

$

923,064

 

 

$

343,553

 

 

$

91,685

 

 

$

4,454,644

 

Gross profit

$

308,188

 

 

$

313,307

 

 

$

190,953

 

 

$

23,802

 

 

$

836,250

 

 

 

10.0

%

 

 

33.9

%

 

 

55.6

%

 

 

26.0

%

 

 

18.8

%

Fuel gallons sold

 

689,467

 

 

 

 

 

 

 

 

 

Three months ended July 31, 2021

 

 

 

 

 

 

 

 

 

Revenue

$

1,967,155

 

 

$

835,485

 

 

$

308,440

 

 

$

70,914

 

 

$

3,181,994

 

Gross profit

$

234,474

 

 

$

275,408

 

 

$

188,106

 

 

$

25,899

 

 

$

723,887

 

 

 

11.9

%

 

 

33.0

%

 

 

61.0

%

 

 

36.5

%

 

 

22.7

%

Fuel gallons sold

 

667,534

 

 

 

 

 

 

 

 

 

Fuel Gallons

 

Fuel Margin

Same-store Sales

(Cents per gallon, excluding credit card fees)

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2023

(2.3

) %

 

 

 

 

 

 

 

 

F2023

44.7

¢

 

 

 

 

 

 

 

 

F2022

9.0

 

 

2.5

%

 

5.7

%

 

1.5

%

 

4.4

%

F2022

35.1

 

 

34.7

¢

 

38.3

¢

 

36.2

 ¢

 

36.0

¢

F2021

(14.6

)

 

(8.6

)

 

(12.1

)

 

6.4

 

 

(8.1

)

F2021

38.2

 

 

35.3

 

 

32.9

 

 

33.0

 

 

34.9

 

Grocery & General Merchandise

 

Grocery & General Merchandise

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2023

5.5

%

 

 

 

 

 

 

 

 

F2023

33.9

%

 

 

 

 

 

 

 

 

F2022

7.0

 

 

6.8

%

 

7.7

%

 

4.3

%

 

6.3

%

F2022

33.0

 

 

33.3

%

 

32.0

%

 

32.5

%

 

32.7

%

F2021

3.6

 

 

6.6

 

 

5.4

 

 

12.5

 

 

6.6

 

F2021

32.2

 

 

33.3

 

 

30.7

 

 

31.8

 

 

32.0

 

Prepared Food & Dispensed Beverage

 

Prepared Food & Dispensed Beverage

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2023

8.4

%

 

 

 

 

 

 

 

 

F2023

55.6

%

 

 

 

 

 

 

 

 

F2022

10.8

 

 

4.1

%

 

7.4

%

 

7.6

%

 

7.4

%

F2022

61.0

 

 

60.6

%

 

58.0

%

 

56.9

%

 

59.2

%

F2021

(9.8

)

 

(3.6

)

 

(5.0

)

 

13.4

 

 

(2.1

)

F2021

59.7

 

 

60.1

 

 

60.6

 

 

60.1

 

 

60.1

 

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets as well as impairment charges. Neither EBITDA nor Adjusted EBITDA are considered GAAP measures, and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by the Company for internal purposes including our capital budgeting process, evaluating acquisition targets, assessing performance, and awarding incentive compensation.

Because non-GAAP financial measures are not standardized, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended July 31, 2022 and 2021:

(in thousands)

Three Months Ended July 31,

 

2022

 

2021

Net income

$

152,932

 

$

119,159

 

Interest, net

 

13,816

 

 

13,730

 

Federal and state income taxes

 

49,936

 

 

36,182

 

Depreciation and amortization

 

76,295

 

 

75,888

 

EBITDA

 

292,979

 

 

244,959

 

Loss (gain) on disposal of assets and impairment charges

 

230

 

 

(1,770

)

Adjusted EBITDA

$

293,209

 

$

243,189

 

NOTES:

  • Gross Profit is defined as revenue less cost of goods sold (exclusive of depreciation and amortization)
  • Inside is defined as the combination of Grocery and General Merchandise and Prepared Food and Dispensed Beverage

This release contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and related sources or needs, business and/or integration strategies, plans and synergies, supply chain, growth opportunities, performance at our stores. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any results expressed or implied by these forward-looking statements, including but not limited to the execution of our strategic plan, the integration and financial performance of acquired stores, wholesale fuel, inventory and ingredient costs, distribution challenges and disruptions, the impact and duration of COVID-19 and related governmental actions, the impact and duration of the conflict in Ukraine or other geopolitical disruptions, as well as other risks, uncertainties and factors which are described in the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission and available on our website. Any forward-looking statements contained in this release represent our current views as of the date of this release with respect to future events, and Casey’s disclaims any intention or obligation to update or revise any forward-looking statements in the release whether as a result of new information, future events, or otherwise.

Corporate information is available at this website: https://www.caseys.com. Earnings will be reported during a conference call on September 8, 2022. The call will be broadcast live over the Internet at 7:30 a.m. CDT. To access the call, go to the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx. No access code is required. A webcast replay of the call will remain available in an archived format on the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx for one year after the call.

Contacts

Investor Relations Contact:

Brian Johnson (515) 965-6587



Media Relations Contact:

Katie Petru (515) 446-6772

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