March 13, 2024
(press release)
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ANKENY, Iowa--(BUSINESS WIRE)-- 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 and nine months ended January 31, 2024. Third Quarter Key Highlights "Casey's delivered another solid quarter highlighted by inside gross profit growth,” said Darren Rebelez, Chairman, President and CEO. “Inside same-store sales were driven by prepared food and dispensed beverage, with whole pies and hot sandwiches performing exceptionally well. Our fuel team navigated a rising cost environment and delivered nearly flat gallon volume and a 37.3 cents per gallon fuel margin. The operations team performed exceptionally well this quarter integrating multiple acquisitions, reducing same-store labor hours while growing sales and driving positive guest satisfaction scores." Earnings Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Net income (in thousands) $ 86,933 $ 100,112 $ 414,952 $ 390,599 Diluted earnings per share $ 2.33 $ 2.67 $ 11.09 $ 10.42 EBITDA (in thousands) $ 217,615 $ 221,727 $ 840,372 $ 786,441 For the quarter, net income, diluted EPS, and EBITDA were down compared to the same period a year ago primarily due to a strong fuel margin comparison in the prior year, lapping the one-time operating expense benefit noted above, and higher operating expenses due to operating 167 additional stores. This was partially offset by higher profitability inside the store. 1 EBITDA is reconciled to net income below. Inside Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Inside sales (in thousands) $ 1,214,959 $ 1,109,223 $ 3,931,619 $ 3,644,277 Inside same-store sales 4.1 % 5.6 % 4.1 % 6.6 % Grocery and general merchandise same-store sales 2.8 % 5.8 % 3.3 % 6.0 % Prepared food and dispensed beverage same-store sales 7.5 % 5.0 % 6.2 % 7.9 % Inside gross profit (in thousands) $ 501,511 $ 450,572 $ 1,611,209 $ 1,459,307 Inside margin 41.3 % 40.6 % 41.0 % 40.0 % Grocery and general merchandise margin 33.9 % 34.0 % 34.0 % 33.7 % Prepared food and dispensed beverage margin 59.6 % 57.3 % 58.9 % 56.5 % Total inside sales were up 9.5% for the quarter driven by strong performance in the prepared food and dispensed beverage category, including whole pizza pies, hot sandwiches, and dispensed beverages as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise category. Inside margin was up 70 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 modest retail price adjustments. Fuel 2 Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Fuel gallons sold (in thousands) 689,251 644,940 2,133,680 2,036,450 Same-store gallons sold (0.4 )% (0.5 )% — % (0.9 )% Fuel gross profit (in thousands) $ 257,246 $ 262,573 $ 863,059 $ 855,167 Fuel margin (cents per gallon, excluding credit card fees) 37.3 ¢ 40.7 ¢ 40.4 ¢ 42.0 ¢ For the quarter, total fuel gallons sold increased 6.9% compared to the prior year primarily due to the store count increase, while same-store gallons were nearly flat versus the prior year. The Company’s total fuel gross profit was down 2.0% versus the prior year. The Company sold $3.4 million in renewable fuel credits (RINs) in the third quarter, an increase of $0.5 million from the same quarter in the prior year. Operating Expenses Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Operating expenses (in thousands) $ 568,908 $ 515,735 $ 1,709,466 $ 1,598,213 Credit card fees (in thousands) $ 51,977 $ 54,032 $ 175,879 $ 181,727 Same-store operating expenses excluding credit card fees 2.5 % 4.6 % 2.5 % 2.8 % Operating expenses increased approximately 10% during the third quarter. Approximately 3% of the increase is due to lapping a $15 million one-time benefit to operating expenses last year from the resolution of a legal matter. Operating 167 more stores than prior year accounted for approximately 6% of the increase. Total same-store employee expense contributed to approximately 1% of the increase, as the increases in labor rates were partially offset by a reduction in same-store labor 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 23 Acquisitions 105 Acquisitions not opened (1) Prior acquisitions opened 6 Closed (15) January 31, 2024 2,639 Liquidity At January 31, 2024, the Company had approximately $1.1 billion in available liquidity, consisting of approximately $178 million in cash and cash equivalents on hand and approximately $899 million in available borrowing capacity on existing lines of credit. Share Repurchase During the third quarter, the Company repurchased approximately $30 million of shares. The Company has approximately $310 million remaining under its existing share repurchase authorization. Dividend At its March meeting, the Board of Directors approved a quarterly dividend of $0.43 per share. The dividend is payable May 15, 2024, to shareholders of record on May 1, 2024. Fiscal 2024 Outlook The Company is reaffirming its annual outlook. Same-store inside sales is expected to increase 3.5% 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 6% to 8%, though same-store operating expenses excluding credit card fees are expected to only increase approximately 3% for the year. Fiscal 2024 EBITDA growth is expected to be in-line with the long-term strategic plan's goal of 8% to 10%. The Company expects to add at least 150 stores in fiscal 2024. Net interest expense is expected to be approximately $53 million. Depreciation and amortization is expected to be approximately $350 million for the year and the purchase of property and equipment is expected to be between $500 to $550 million. The tax rate is expected to be approximately 23% to 25% for the year. The Company expects to repurchase at least $100 million in shares throughout the fiscal year. Casey’s General Stores, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Amounts in thousands, except share and per share amounts) (Unaudited) Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Total revenue $ 3,329,247 $ 3,332,555 $ 11,262,898 $ 11,765,774 Cost of goods sold (exclusive of depreciation and amortization, shown separately below) 2,542,724 2,595,093 8,713,060 9,381,120 Operating expenses 568,908 515,735 1,709,466 1,598,213 Depreciation and amortization 88,950 78,088 257,453 232,500 Interest, net 14,146 11,697 38,947 39,015 Income before income taxes 114,519 131,942 543,972 514,926 Federal and state income taxes 27,586 31,830 129,020 124,327 Net income $ 86,933 $ 100,112 $ 414,952 $ 390,599 Net income per common share Basic $ 2.34 $ 2.69 $ 11.15 $ 10.48 Diluted $ 2.33 $ 2.67 $ 11.09 $ 10.42 Basic weighted average shares 37,100,143 37,281,103 37,210,007 37,261,049 Plus effect of stock compensation 235,940 283,448 199,531 240,459 Diluted weighted average shares 37,336,083 37,564,551 37,409,538 37,501,508 Casey’s General Stores, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Dollars in thousands) (Unaudited) January 31, 2024 April 30, 2023 Assets Current assets Cash and cash equivalents $ 177,881 $ 378,869 Receivables 136,691 120,547 Inventories 414,721 376,085 Prepaid expenses 29,946 22,107 Income taxes receivable 21,765 23,347 Total current assets 781,004 920,955 Other assets, net of amortization 197,780 192,153 Goodwill 647,125 615,342 Property and equipment, net of accumulated depreciation of $2,836,219 at January 31, 2024 and $2,620,149 at April 30, 2023 4,581,105 4,214,820 Total assets $ 6,207,014 $ 5,943,270 Liabilities and Shareholders’ Equity Current liabilities Current maturities of long-term debt and finance lease obligations $ 53,250 $ 52,861 Accounts payable 521,948 560,546 Accrued expenses 305,708 313,718 Total current liabilities 880,906 927,125 Long-term debt and finance lease obligations, net of current maturities 1,583,613 1,620,513 Deferred income taxes 591,811 543,598 Insurance accruals, net of current portion 33,114 32,312 Other long-term liabilities 170,109 159,056 Total liabilities 3,259,553 3,282,604 Total shareholders’ equity 2,947,461 2,660,666 Total liabilities and shareholders’ equity $ 6,207,014 $ 5,943,270 Casey’s General Stores, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) Nine months ended January 31, 2024 2023 Cash flows from operating activities: Net income $ 414,952 $ 390,599 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 257,453 232,500 Amortization of debt issuance costs 833 1,036 Change in excess replacement cost over LIFO inventory valuation 7,786 20,329 Share-based compensation 29,349 34,741 Loss on disposal of assets and impairment charges 892 5,977 Deferred income taxes 48,213 24,516 Changes in assets and liabilities: Receivables (15,146 ) (19,300 ) Inventories (33,762 ) (10,433 ) Prepaid expenses (7,839 ) (6,571 ) Accounts payable (93,480 ) (100,714 ) Accrued expenses (10,905 ) 20,869 Income taxes 2,335 39,548 Other, net 3,919 3,496 Net cash provided by operating activities 604,600 636,593 Cash flows from investing activities: Purchase of property and equipment (325,726 ) (301,298 ) Payments for acquisition of businesses, net of cash acquired (296,809 ) (13,202 ) Proceeds from sales of assets 20,351 13,551 Net cash used in investing activities (602,184 ) (300,949 ) Cash flows from financing activities: Payments of long-term debt and finance lease obligations (48,364 ) (23,563 ) Payments of cash dividends (46,975 ) (41,456 ) Repurchase of common stock (89,768 ) — Tax withholdings on employee share-based awards (18,297 ) (16,304 ) Net cash used in financing activities (203,404 ) (81,323 ) Net (decrease) increase in cash and cash equivalents (200,988 ) 254,321 Cash and cash equivalents at beginning of the period 378,869 158,878 Cash and cash equivalents at end of the period $ 177,881 $ 413,199 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION Nine months ended January 31, 2024 2023 Cash paid during the period for: Interest, net of amount capitalized $ 43,316 $ 37,765 Income taxes, net 72,037 56,289 Noncash investing and financing activities: Purchased property and equipment in accounts payable 82,785 76,840 Right-of-use assets obtained in exchange for new finance lease liabilities 14,035 6,909 Right-of-use assets obtained in exchange for new operating lease liabilities 12,613 13,485 Summary by Category (Amounts in thousands) Three months ended January 31, 2024 Prepared Food Grocery & General Fuel Other Total Revenue $ 349,411 $ 865,548 $ 2,051,674 $ 62,614 $ 3,329,247 Gross profit $ 208,327 $ 293,184 $ 257,246 $ 27,766 $ 786,523 59.6 % 33.9 % 12.5 % 44.3 % 23.6 % Fuel gallons sold 689,251 Three months ended January 31, 2023 Revenue $ 313,524 $ 795,699 $ 2,157,233 $ 66,099 $ 3,332,555 Gross profit $ 179,647 $ 270,925 $ 262,573 $ 24,317 $ 737,462 57.3 % 34.0 % 12.2 % 36.8 % 22.1 % Fuel gallons sold 644,940 Summary by Category (Amounts in thousands) Nine months ended January 31, 2024 Prepared Food Grocery & General Fuel Other Total Revenue $ 1,104,705 $ 2,826,914 $ 7,125,485 $ 205,794 $ 11,262,898 Gross profit $ 650,852 $ 960,357 $ 863,059 $ 75,570 $ 2,549,838 58.9 % 34.0 % 12.1 % 36.7 % 22.6 % Fuel gallons sold 2,133,680 Nine months ended January 31, 2023 Revenue $ 1,008,338 $ 2,635,939 $ 7,889,495 $ 232,002 $ 11,765,774 Gross profit $ 569,825 $ 889,482 $ 855,167 $ 70,180 $ 2,384,654 56.5 % 33.7 % 10.8 % 30.2 % 20.3 % Fuel gallons sold 2,036,450 Prepared Food & Dispensed Beverage Prepared Food & Dispensed Beverage Same-store Sales Margin Q1 Q2 Q3 Q4 Fiscal Q1 Q2 Q3 Q4 Fiscal F2024 5.9 % 6.1 % 7.5 % F2024 58.2 % 59.0 % 59.6 % 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 Grocery & General Merchandise Grocery & General Merchandise Same-store Sales Margin Q1 Q2 Q3 Q4 Fiscal Q1 Q2 Q3 Q4 Fiscal F2024 5.2 % 1.7 % 2.8 % F2024 34.1 % 34.0 % 33.9 % 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 Fuel Gallons Fuel Margin Same-store Sales (Cents per gallon, excluding credit card fees) Q1 Q2 Q3 Q4 Fiscal Q1 Q2 Q3 Q4 Fiscal F2024 0.4 % — % (0.4 )% F2024 41.6 ¢ 42.3 ¢ 37.3 ¢ 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 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 and nine months ended January 31, 2024 and 2023: (in thousands) Three Months Ended January 31, Nine Months Ended January 31, 2024 2023 2024 2023 Net income $ 86,933 $ 100,112 $ 414,952 $ 390,599 Interest, net 14,146 11,697 38,947 39,015 Federal and state income taxes 27,586 31,830 129,020 124,327 Depreciation and amortization 88,950 78,088 257,453 232,500 EBITDA 217,615 221,727 840,372 786,441 Loss on disposal of assets and impairment charges 1,124 1,186 892 5,977 Adjusted EBITDA $ 218,739 $ 222,913 $ 841,264 $ 792,418 NOTES: 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 March 12, 2024. 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. Investor Relations Contact:
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Brian Johnson, (515) 446-6587
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