Casey's Announces First Quarter Results

Sample article from our Retail & Omnichannel

September 14, 2023 (press release) –

September 11, 2023

Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq: CASY) one of the leading convenience store chains in the United States, today announced financial results for the three months ended July 31, 2023.

First Quarter Key Highlights

  • Diluted EPS of $4.52, up 11% from the same period a year ago.
  • Inside same-store sales increased 5.4% compared to prior year, and 12.1% on a two-year stack basis, with an inside margin of 40.6%. Total inside gross profit increased 10.3% to $556.4 million compared to the prior year.
  • Same-store fuel gallons were up 0.4% compared to prior year with a fuel margin of 41.6 cents per gallon. Total fuel gross profit decreased 3.6% to $297.0 million compared to the prior year.
  • Same-store operating expense excluding credit card fees were up 3.4%, favorably impacted by a 3% reduction in same-store labor hours.
  • Casey's currently has 125 stores under agreement to acquire, including 63 stores previously announced from EG Group Ltd.

“Our team is off to a great start on our three-year strategic plan, highlighted by an 11% increase in diluted EPS,” said Darren Rebelez, Chairman, President and CEO. “With a more normalized macro operating environment in the quarter, the strength of Casey's unique business model was on full display. Inside same-store sales were strong, driven by whole pizza pies and the successful launch of Casey's Thin Crust Pizza. The fuel team continues to do an excellent job striking the right balance between gallon growth and gross profit margin, as evidenced by fuel margin of 41.6 cents per gallon while growing same-store gallons. Finally, I am very proud of our team's ability to effectively manage operating expenses as we continue to prioritize simplification and efficiency inside our stores.”

Earnings

 

Three Months Ended July 31,

 

2023

 

2022

Net income (in thousands)

$

169,237

 

$

152,932

Diluted earnings per share

$

4.52

 

$

4.09

Adjusted EBITDA (in thousands)1

$

315,451

 

$

293,209

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document), were up compared to the same period a year ago primarily due to higher profitability inside the store partially offset by lower fuel margin and higher operating expenses due to operating 82 additional stores.

_______________

1 EBITDA and Adjusted EBITDA are reconciled later in the document

Inside

 

Three Months Ended July 31,

 

2023

 

2022

Inside sales (in thousands)

$

1,369,749

 

 

$

1,266,617

 

Inside same-store sales

 

5.4

%

 

 

6.3

%

Grocery and general merchandise same-store sales

 

5.2

%

 

 

5.5

%

Prepared food and dispensed beverage same-store sales

 

5.9

%

 

 

8.4

%

Inside gross profit (in thousands)

$

556,434

 

 

$

504,260

 

Inside margin

 

40.6

%

 

 

39.8

%

Grocery and general merchandise margin

 

34.1

%

 

 

33.9

%

Prepared food and dispensed beverage margin

 

58.2

%

 

 

55.6

%

Total inside sales were up 8.1% for the quarter driven by strong performance in the prepared food and dispensed beverage category, including whole pizza pies, hot sandwiches and donuts as well as non-alcoholic and alcoholic beverages, snacks and candy in the grocery and general merchandise category. Inside margin was up 80 basis points compared to the same quarter a year ago, primarily due to softening of prepared food and dispensed beverage ingredient costs as well as increased penetration of private label products.

Fuel 2

 

Three Months Ended July 31,

 

2023

 

2022

Fuel gallons sold (in thousands)

 

713,991

 

 

 

689,467

 

Same-store gallons sold

 

0.4

%

 

 

(2.3

)%

Fuel gross profit (in thousands)

$

296,978

 

 

$

308,188

 

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

41.6

¢

 

44.7

¢

Total fuel gallons sold increased 3.6% compared to the prior year primarily due to the store count increase; also contributing were same-store gallons sold 0.4% versus the prior year. The Company’s total fuel gross profit was down 3.6% versus the prior year, as we lapped record high fuel margins last year. The Company sold $20.2 million in renewable fuel credits (RINs) in the first quarter, an increase of $2.5 million from the same quarter in the prior year.

Operating Expenses

 

Three Months Ended July 31,

 

2023

 

2022

Operating expenses (in thousands)

$

560,855

 

 

$

543,271

 

Credit card fees (in thousands)

$

60,985

 

 

$

67,277

 

Same-store operating expense excluding credit card fees

 

3.4

%

 

 

2.6

%

Operating expenses increased 3.2% during the first quarter. Nearly 3% of the increase is due to operating 82 more stores than prior year. Credit card fees decreased approximately $6 million due to lower retail fuel price which offset all remaining operating expense increases. Same-store employee expense was approximately flat, as the increase in wage rate was nearly offset by the reduction in same-store hours.

_______________

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

Expansion

 

Store Count

April 30, 2023

2,521

 

New store construction

10

 

Acquisitions

4

 

Acquisitions not opened

(2

)

Prior acquisitions opened

4

 

Closed

(1

)

July 31, 2023

2,536

 

Liquidity

At July 31, 2023, the Company had approximately $1.3 billion in available liquidity, consisting of approximately $439 million in cash and cash equivalents on hand and $900 million in available borrowing capacity on existing lines of credit.

Share Repurchase

During the first quarter, the Company repurchased shares for approximately $30 million. The Company has $370 million remaining under its existing share repurchase authorization.

Dividend

At its September meeting, the Board of Directors voted to pay a quarterly dividend of $0.43 per share. The dividend is payable November 15, 2023 to shareholders of record on November 1, 2023.

Fiscal 2024 Outlook

Casey's is updating its fiscal 2024 outlook as a result of the pending transactions and now expects to add at least 150 stores in fiscal 2024.

The Company is not updating its outlook for the following metrics. Casey’s currently expects inside same-store sales to increase 3% to 5%. We expect inside margin improvement to approximately 40% to 41%. The Company expects same-store fuel gallons sold to be between negative 1% to positive 1%. Total operating expenses are expected to increase approximately 5% to 7%. Net interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $340 million and the purchase of property and equipment is expected to be $500 to $550 million 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,

 

2023

 

2022

Total revenue

$

3,869,251

 

$

4,454,644

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

 

2,991,497

 

 

3,618,394

Operating expenses

 

560,855

 

 

543,271

Depreciation and amortization

 

82,905

 

 

76,295

Interest, net

 

12,495

 

 

13,816

Income before income taxes

 

221,499

 

 

202,868

Federal and state income taxes

 

52,262

 

 

49,936

Net income

$

169,237

 

$

152,932

Net income per common share

 

 

 

Basic

$

4.54

 

$

4.11

Diluted

$

4.52

 

$

4.09

Basic weighted average shares

 

37,300,952

 

 

37,222,943

Plus effect of stock compensation

 

155,187

 

 

186,762

Diluted weighted average shares

 

37,456,139

 

 

37,409,705

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

       

 

July 31, 2023

 

April 30, 2023

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

439,112

 

$

378,869

Receivables

 

133,726

 

 

120,547

Inventories

 

424,728

 

 

376,085

Prepaid expenses

 

24,625

 

 

22,107

Income taxes receivable

 

 

 

23,347

Total current assets

 

1,022,191

 

 

920,955

Other assets, net of amortization

 

191,900

 

 

192,153

Goodwill

 

618,477

 

 

615,342

Property and equipment, net of accumulated depreciation of $2,694,571 at July 31, 2023 and $2,620,149 at April 30, 2023

 

4,229,784

 

 

4,214,820

Total assets

$

6,062,352

 

$

5,943,270

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt and finance lease obligations

$

53,640

 

$

52,861

Accounts payable

 

570,485

 

 

560,546

Accrued expenses

 

294,873

 

 

313,718

Income taxes payable

 

15,001

 

 

Total current liabilities

 

933,999

 

 

927,125

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

 

1,598,524

 

 

1,620,513

Deferred income taxes

 

559,493

 

 

543,598

Insurance accruals, net of current portion

 

32,070

 

 

32,312

Other long-term liabilities

 

161,971

 

 

159,056

Total liabilities

 

3,286,057

 

 

3,282,604

Total shareholders’ equity

 

2,776,295

 

 

2,660,666

Total liabilities and shareholders’ equity

$

6,062,352

 

$

5,943,270

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

   

 

Three months ended July 31,

 

2023

 

2022

Cash flows from operating activities:

 

 

 

Net income

$

169,237

 

 

$

152,932

 

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

 

 

 

Depreciation and amortization

 

82,905

 

 

 

76,295

 

Amortization of debt issuance costs

 

278

 

 

 

345

 

Share-based compensation

 

10,468

 

 

 

16,185

 

(Gain) loss on disposal of assets and impairment charges

 

(1,448

)

 

 

230

 

Deferred income taxes

 

15,895

 

 

 

24,727

 

Changes in assets and liabilities:

 

 

 

Receivables

 

(13,179

)

 

 

(37,859

)

Inventories

 

(48,256

)

 

 

(2,899

)

Prepaid expenses

 

(2,518

)

 

 

(6,504

)

Accounts payable

 

(4,344

)

 

 

34,799

 

Accrued expenses

 

(20,150

)

 

 

(7,865

)

Income taxes

 

39,139

 

 

 

23,953

 

Other, net

 

1,104

 

 

 

1,867

 

Net cash provided by operating activities

 

229,131

 

 

 

276,206

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(68,903

)

 

 

(82,070

)

Payments for acquisition of businesses, net of cash acquired

 

(13,297

)

 

 

(1,065

)

Proceeds from sales of assets

 

5,784

 

 

 

5,019

 

Net cash used in investing activities

 

(76,416

)

 

 

(78,116

)

Cash flows from financing activities:

 

 

 

Payments of long-term debt

 

(29,665

)

 

 

(15,998

)

Payments of cash dividends

 

(14,945

)

 

 

(13,128

)

Repurchase of common stock

 

(29,893

)

 

 

 

Tax withholdings on employee share-based awards

 

(17,969

)

 

 

(15,478

)

Net cash used in financing activities

 

(92,472

)

 

 

(44,604

)

Net increase in cash and cash equivalents

 

60,243

 

 

 

153,486

 

Cash and cash equivalents at beginning of the period

 

378,869

 

 

 

158,878

 

Cash and cash equivalents at end of the period

$

439,112

 

 

$

312,364

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

 

Three months ended July 31,

 

2023

 

2022

Cash paid during the period for:

 

 

 

Interest, net of amount capitalized

$

10,701

 

 

$

8,689

 

Income taxes, net

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

Purchased property and equipment in accounts payable

 

42,188

 

 

 

42,008

 

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

 

8,345

 

 

 

736

 

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

 

2,214

 

 

 

 

Summary by Category (Amounts in thousands)

Three months ended July 31, 2023

Fuel

 

Grocery & General

Merchandise

 

Prepared Food & Dispensed Beverage

 

Other

 

Total

Revenue

$

2,427,333

 

 

$

996,936

 

 

$

372,813

 

 

$

72,169

 

 

$

3,869,251

 

Gross profit

$

296,978

 

 

$

339,573

 

 

$

216,861

 

 

$

24,342

 

 

$

877,754

 

 

 

12.2

%

 

 

34.1

%

 

 

58.2

%

 

 

33.7

%

 

 

22.7

%

Fuel gallons sold

 

713,991

 

 

 

 

 

 

 

 

 

Three months ended July 31, 2022

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

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

F2024

0.4

%

 

 

 

 

 

 

 

 

F2024

41.6

¢

 

 

 

 

 

 

 

 

 

 

 

 

F2023

(2.3

)

 

0.3

%

 

(0.5

)%

 

%

 

(0.8

)%

F2023

44.7

 

 

40.5

¢

 

40.7

¢

 

34.6

¢

 

40.2

¢

F2022

9.0

 

 

2.5

 

 

5.7

 

 

1.5

 

 

4.4

 

F2022

35.1

 

 

34.7

 

 

38.3

 

 

36.2

 

 

36.0

 

Grocery & General Merchandise

 

Grocery & General Merchandise

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2024

5.2

%

 

 

 

 

 

 

 

 

F2024

34.1

%

 

 

 

 

 

 

 

 

F2023

5.5

 

 

6.9

%

 

5.8

%

 

7.1

%

 

6.3

%

F2023

33.9

 

 

33.3

%

 

34.0

%

 

33.0

%

 

33.6

%

F2022

7.0

 

 

6.8

 

 

7.7

 

 

4.3

 

 

6.3

 

F2022

33.0

 

 

33.3

 

 

32.0

 

 

32.5

 

 

32.7

 

Prepared Food & Dispensed Beverage

 

Prepared Food & Dispensed Beverage

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2024

5.9

%

 

 

 

 

 

 

 

 

F2024

58.2

%

 

 

 

 

 

 

 

 

F2023

8.4

 

 

10.5

%

 

5.0

%

 

4.9

%

 

7.1

%

F2023

55.6

 

 

56.7

%

 

57.3

%

 

56.8

%

 

56.6

%

F2022

10.8

 

 

4.1

 

 

7.4

 

 

7.6

 

 

7.4

 

F2022

61.0

 

 

60.6

 

 

58.0

 

 

56.9

 

 

59.2

 

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, 2023 and 2022:

(in thousands)

Three Months Ended July 31,

 

2023

 

2022

Net income

$

169,237

 

 

$

152,932

Interest, net

 

12,495

 

 

 

13,816

Federal and state income taxes

 

52,262

 

 

 

49,936

Depreciation and amortization

 

82,905

 

 

 

76,295

EBITDA

 

316,899

 

 

 

292,979

(Gain) loss on disposal of assets and impairment charges

 

(1,448

)

 

 

230

Adjusted EBITDA

$

315,451

 

 

$

293,209

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 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 12, 2023. The call will be broadcast live over the Internet at 7:30 a.m. CST. 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.

Investor Relations Contact:
Brian Johnson (515) 965-6587

Media Relations Contact:
Katie Petru (515) 446-6772

Source: Casey’s General Stores
Categories: Press Releases

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