Casey's General Stores' fiscal Q3 earnings fell 5.1% versus a year ago to US$14.7M as revenue climbed 7.7% to US$1.79B; Q3 sales strong across all categories despite severe winter weather, CEO says

ANKENY, Iowa , March 11, 2014 (press release) –

Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported diluted earnings per share of $0.38 for the third quarter of fiscal 2014 ended January 31, 2014, compared to $0.40 for the same quarter a year ago. Year to date, diluted earnings per share were $2.87 compared to $2.26 a year ago. “Third quarter sales were strong throughout all of our categories despite challenging weather during the quarter,” stated Chairman and CEO Robert J. Myers. “Our same-store fuel sales are exceeding industry-wide trends and gross profit from inside the store was up over 11% for both the quarter and year.”

Gasoline – The goal for fiscal 2014 is to increase same-store gallons sold 1.5% with an average margin of 15 cents per gallon. For the third quarter, same-store gallons sold were up 3.8% with an average margin of 14.4 cents per gallon. The Company sold 12.2 million renewable fuel credits for $3.4 million in the quarter. “The fuel saver program is in its second year and continues to significantly impact our fuel sales,” said Myers. “Fuel margins dipped below goal in the third quarter due to a less volatile wholesale cost environment as well as the seasonal decline we usually experience this time of year.” Total gallons sold for the year were up 9.1% with an average margin of 17.8 cents per gallon. Year to date, same-store gallons were up 3.7%.

Grocery and Other Merchandise – The Company’s annual goal is to increase same-store sales 5% with an average margin of 32.3%. For the quarter, same-store sales were up 6.5% with an average margin of 31.1%. “Sales were strong throughout the entire grocery and other merchandise category during the third quarter,” said Myers. “Beer and beverages are performing especially well due predominately to our increased cooler capacity in our newer store designs.” For the nine months ended January 31, 2014, same-store sales were up 7.5% with an average margin of 32.1%. Total sales for the year were up 11.7% and gross profit increased 9% to $386.5 million.

Prepared Food and Fountain – Casey’s annual goal is to increase same-store sales 9% with an average margin of 62%. For the third quarter, same-store sales were up 10.7% with an average margin of 60.8%. “In addition to the operating initiatives such as 24-hour expansion, pizza delivery, and major remodels contributing to sales, we also experienced strong prepared food sales in our unchanged group of stores,” said Myers. “Our margin benefited from a favorable product mix shift, as pizza sales increased as a percentage of the total category. This offset higher input costs of meat, cheese and supplies when compared to prior year’s third quarter.” Total sales for the category were up 16.4% year to date, and gross profit increased 15.1% to $305.1 million.

Operating Expenses – Year to date, operating expenses increased 13.7% to $647.2 million. For the third quarter, operating expenses were up 13.1%. “The majority of the operating expense increase for both the quarter and year was due to new, acquired, and replaced stores, along with the various operating initiatives that have been rolled out to existing stores,” stated Myers. “Included in the results was approximately $1.6 million combined for additional snow removal and a loss from a store that was destroyed by a fire.”

Expansion – The annual goal is to build or acquire 70 to 105 (4-6%) stores and replace 20 existing locations. Through the first nine months, the Company has built 26 new stores and acquired an additional 24. The Company also completed 19 replacement stores as well as 25 major remodels. “Casey’s recently announced it signed a purchase agreement to acquire 24 Stop-n-Go stores located in North Dakota and Minnesota,” said Myers. “Although this transaction is expected to close in the next fiscal year, we believe it is indicative of an active acquisition environment right now, and we are excited about the opportunities to build and buy new stores.” The Company currently has 25 new stores and 15 replacement stores under construction, as well as 32 stores under contract to acquire, including the Stop-n-Go chain. The Company also has 43 new sites and 33 replacement sites under contract to purchase.

Dividend – At its March meeting, the Board of Directors declared a quarterly dividend of $0.18 per share. The dividend is payable May 15th, 2014 to shareholders of record on May 1st, 2014.

 
Casey’s General Stores, Inc.
Condensed Consolidated
Statements of Income

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

(Unaudited)

 
     

 

Three months ended January 31,

     

Nine months ended January 31,

        2014       2013       2014       2013
Total revenue     $ 1,790,055     $

1,662,365

    $ 5,920,689     $ 5,442,311

Cost of goods sold (exclusive of

depreciation and amortization,

shown separately below)

     

 

1,510,182

     

 

1,412,679

     

 

4,973,005

     

 

4,626,338

Gross profit       279,873       249,686       947,684       815,973
Operating expenses       214,671       189,872       647,174       569,311
Depreciation and amortization       32,687       28,229       95,604       81,913
Interest, net       9,947       8,764       29,151       26,305
Income before income taxes       22,568       22,821       175,755       138,444
Federal and state income taxes       7,899       7,358       64,057       51,091
Net Income     $ 14,669     $ 15,463     $ 111,698     $ 87,353
                                 
Net income per common share                                
Basic     $ 0.38     $ 0.40     $ 2.91     $ 2.28
Diluted     $ 0.38     $ 0.40     $ 2.87     $ 2.26
Basic weighted average shares       38,482,970       38,317,140       38,443,816       38,282,196
Plus effect of stock compensation       444,061       304,948       418,025       331,934
Diluted weighted average shares       38,927,031       38,622,088       38,861,841       38,614,130
                                 
 
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 
       

January 31,

     

April 30,

        2014       2013
Assets                
Current assets                
Cash and cash equivalents     $ 102,160     $ 41,271
Receivables       25,067       20,900
Inventories       190,839       189,514
Prepaid expenses       2,092       1,396
Deferred income taxes       12,096       9,916
Income tax receivable       13,403       9,820
Total current assets       345,657       272,817
Other assets, net of amortization       15,453       14,485
Goodwill       120,081       114,791

Property and equipment, net of accumulated depreciation of $1,029,303 at January 31, 2014, and of $952,286 at April 30, 2013

      1,745,011       1,581,925
Total assets     $ 2,226,202     $ 1,984,018
                 
Liabilities and Shareholders' Equity                
Current liabilities                
Notes payable to bank     $ --------     $ 59,100
Current maturities of long-term debt       8,177       15,810
Accounts payable       201,812       232,913
Accrued expenses       109,568       89,925
Total current liabilities       319,557       397,748
Long-term debt, net of current maturities       853,739       653,081
Deferred income taxes       309,918       293,708
Deferred compensation       16,440       15,787
Other long-term liabilities       24,795       21,399
Total liabilities       1,524,449       1,381,723
                 
Total shareholders' equity       701,753       602,295
                 
Total liabilities and shareholders' equity     $ 2,226,202     $ 1,984,018
                 

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 01/31/14

   

Gasoline

   

Grocery & Other
Merchandise

   

Prepared Food
& Fountain

   

Other

   

Total

Sales     $ 1,255,774       $ 364,846       $ 158,200       $ 11,235       $ 1,790,055  
Gross profit     $ 59,075       $ 113,429       $ 96,147       $ 11,222       $ 279,873  
Margin       4.7 %       31.1 %       60.8 %       99.9 %       15.6 %
Gasoline gallons       411,389                          
                               
Three months ended 01/31/13                              
Sales     $ 1,185,640       $ 329,657       $ 137,033       $ 10,035       $ 1,662,365  
Gross profit     $ 52,002       $ 104,660       $ 83,011       $ 10,013       $ 249,686  
Margin       4.4 %       31.7 %       60.6 %       99.8 %       15.0 %
Gasoline gallons       376,809                          
                                   
 
Sales and Gross Profit by Product (Amounts in thousands)
 

Nine months ended 1/31/14

   

Gasoline

   

Grocery & Other
Merchandise

   

Prepared Food
& Fountain

   

Other

   

Total

Sales     $ 4,187,629       $ 1,204,983       $ 496,199       $ 31,878       $ 5,920,689  
Gross profit     $ 224,224       $ 386,548       $ 305,072       $ 31,840       $ 947,684  
Margin       5.4 %       32.1 %       61.5 %       99.9 %       16.0 %
Gasoline gallons       1,261,833                          
                               
Nine months ended 1/31/13                              
Sales     $ 3,909,787       $ 1,078,448       $ 426,282       $ 27,794       $ 5,442,311  
Gross profit     $ 168,431       $ 354,700       $ 265,091       $ 27,751       $ 815,973  
Margin       4.3 %       32.9 %       62.2 %       99.8 %       15.0 %
Gasoline gallons       1,157,077                          
                                   
       
Gasoline Gallons     Gasoline Margin
Same-store Sales Growth     (Cents per gallon, excluding credit card fees)
                                             
   

Q1

 

Q2

 

Q3

 

Q4

FY

       

Q1

 

Q2

 

Q3

 

Q4

 

FY

F2014   3.2 %   4.2 %   3.8 %     3.7 %     F2014   22.1¢   16.7¢   14.4¢       17.8¢
F2013   -0.2     -0.4     0.6     1.0 % 0.1       F2013   14.9     14.9     13.8     17.0¢   15.2  
F2012   -2.7     -2.9     -2.4     2.5   -1.5       F2012   17.2     16.7     13.6     13.7     15.3  
       
Grocery & Other Merchandise     Grocery & Other Merchandise
Same-store Sales Growth     Margin
                                               
   

Q1

 

Q2

 

Q3

 

Q4

 

FY

       

Q1

 

Q2

 

Q3

 

Q4

 

FY

F2014   6.1 %   10.2 %   6.5 %       7.5 %     F2014   32.7 %   32.3 %   31.1 %       32.1 %
F2013   2.6     -0.7     3.2     -0.2 %   0.8       F2013   33.4     33.4     31.7     31.7 %   32.6  
F2012   6.2     5.8     6.3     8.5     6.7       F2012   32.5     32.5     31.8     33.0     32.5  
       
Prepared Food & Fountain     Prepared Food & Fountain
Same-store Sales Growth     Margin
                                               
   

Q1

 

Q2

 

Q3

 

Q4

 

FY

       

Q1

 

Q2

 

Q3

 

Q4

 

FY

F2014   11.9 %   12.3 %   10.7 %       11.7 %     F2014   61.8 %   61.8 %   60.8 %       61.5 %
F2013   10.6     10.1     11.6     4.4 %   8.6       F2013   63.5     62.5     60.6     60.5 %   61.8  
F2012   15.3     14.2     12.6     16.8     14.3       F2012   61.2     59.5     61.2     60.8     60.7  
                                                                   

Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on March 11, 2014. 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.

 

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

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