Casey's General Stores' fiscal Q2 earnings rose 73% to US$37.6M as revenue climbed to US$1.78B from US$1.35B; CEO credits favorable gas margin, strong inside sales
Cindy Allen
ANKENY, Iowa
,
December 7, 2011
(Casey's General Stores)
–
Casey’s General Stores, Inc. (Nasdaq: CASY) today reported $0.99 in basic earnings per share for the second quarter of fiscal 2012 ended October 31, 2011 compared to $0.51 for the same period a year ago. Year to date, basic earnings per share were $2.02 versus $1.27 for the same period last year. After adjusting for costs associated with the hostile takeover attempt by Alimentation Couche-Tard, Inc., basic earnings per share last year would have been $0.81 for the quarter and $1.62 year to date. We are pleased with the second quarter results, despite the continued challenges impacting our industry,” stated President and CEO Robert J. Myers. “We experienced a favorable gas margin and strong inside sales, resulting in a 15.6% increase in total gross profit.”
Casey’s General Stores, Inc. Condensed Consolidated Statements of Earnings (Dollars in thousands, except share and per share amounts) (Unaudited) 2011 2010 Gross profit 46,327 Plus effect of stock options
Gasoline—The Company’s annual goal is to increase same-store gasoline gallons sold 1% with an average margin of 13.5 cents per gallon. For the second quarter, same-store gallons sold were down 2.9%, adversely impacted by a 30.9% increase in retail gas prices from the same period a year ago. The favorable gasoline margin environment continued in the second quarter resulting in an average margin of 16.7 cents per gallon. “The average gasoline margin for the trailing four years is 14.2 cents per gallon,” said Myers. For the year, total gallons sold were up 6.1% to 755.9 million with an average margin of 16.9 cents, while gross profit rose 14.6%. Same-store gallons for the year were down 2.8%.
Grocery & Other Merchandise—Casey’s annual goal is to increase same-store sales 5.8% with an average margin of 32.8%. For the quarter, same-store sales rose 5.8% with an average margin of 32.5%. For the fourth consecutive quarter, the Company experienced double digit sales increases across all major areas of this category. As a result, total sales were up 15.8%. “Competitive cigarette pricing continued to impact the margin in the second quarter compared to the second quarter a year ago,” stated Myers. “However, our cigarette margin began to stabilize in the second quarter as we start to cycle against the more competitive landscape that began about a year ago.” Despite the margin pressure from cigarettes, gross profit dollars increased 14.3% for the quarter. For the six months ended October 31, 2011, same-store sales were up 6.0% with an average margin of 32.5%. Total sales for the year are up 15.5% to $723 million.
Prepared Food & Fountain—The goal for fiscal 2012 is to increase same-store sales 7.7% with an average margin of 61.8%. Same-store sales were up 14.2% for the quarter and 14.8% year to date. The average margin for the quarter was 59.5%, down from the same period a year ago, primarily due to a rise in commodity prices. “It is essential to have high quality prepared food offerings at competitive prices to meet the needs of our value oriented customer base,” said Myers. “This focus on our customers enabled us to increase sales by 20.2% and gross profit by 14.1% for the quarter, despite a decline in the margin,” said Myers. Year to date, total sales were up 20.6% to $252.7 million compared to the first six months last year, with an average margin of 60.4%.
Operating Expenses—Year to date, operating expenses increased 12.3% to $343.2 million. For the quarter, operating expenses were up 12.1%. After adjusting for the expenses associated with the unsolicited offer by Couche-Tard in the prior year, expenses increased 18.4% in the quarter and 17.8% at the six month mark. “The increase was driven primarily by operating 128 more stores this quarter and a $5.2 million increase in credit card fees compared to the same period a year ago,” stated Myers.
Expansion—The annual goal is to increase the total number of stores 4-6%. At the mid-year point, the Company had acquired 33 stores and completed 8 new-store constructions. “We are on pace to build approximately 30 stores by the end of the fiscal year,” said Myers. “The acquisition environment continues to be active, and we remain optimistic about our long-term opportunities.”
Dividend—At its December meeting, the Board of Directors declared a quarterly dividend of $0.15 per share. The dividend is payable February 15, 2012 to shareholders of record on February 1, 2012.
Three months ended October 31,
Six months ended October 31,
2011
2010
Total revenue
$
1,782,518
1,349,519
$
3,656,350
2,711,546
Cost of goods sold (exclusive of
depreciation and amortization,
shown separately below)
1,519,600
1,122,142
3,126,650
2,250,198
262,918
227,377
529,700
461,348
Operating expenses
171,832
153,263
343,248
305,649
Depreciation and amortization
23,432
20,041
39,604
Interest, net
8,777
8,195
17,711
10,722
Loss on early retirement of debt
-----------
11,350
-----------
11,350
Earnings before income taxes
58,877
34,528
122,414
94,023
Federal and state income taxes
21,245
12,836
45,391
35,045
Net earnings
$
37,632
21,692
$
77,023
58,978
Earnings per common share
Basic
$
.99
.51
$
2.02
1.27
Diluted
$
.98
.51
$
2.01
1.26
Basic weighted average shares
outstanding
38,055,909
42,283,525
38,040,142
46,622,176
342,934
287,678
328,239
263,899
Diluted weighted average shares
outstanding
38,398,843
42,571,203
38,368,381
46,886,075
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