EX-99.1 2 q2fy2019earningspressrelea.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
caseyscolorlogoa11.jpg
 
 
 
NEWS RELEASE FOR IMMEDIATE RELEASE
  
 
Casey’s General Stores, Inc.
One SE Convenience Blvd.
Ankeny, IA 50021
  
Nasdaq Symbol CASY
CONTACT Bill Walljasper
(515) 965-6505

Casey's Reports 41% Growth in Diluted Earnings Per Share in Second Quarter
Ankeny, IA, December 10, 2018 - Casey’s General Stores, Inc. (“Casey’s” or the “Company”) (Nasdaq symbol CASY) today reported diluted earnings per share of $1.80 for the second quarter of fiscal 2019 ended October 31, 2018, compared to $1.28 per share for the same quarter a year ago. "We're moving the Company forward on multiple fronts," said Terry Handley, President and Chief Executive Officer. "The ongoing efforts around operating expense control, combined with a continued focus on strategic pricing, new store openings, and the favorable impact of tax reform produced strong diluted earnings per share growth."
Value Creation Plan Update - The Company has completed or made progress on the following value creation plan activities:
Launched the Fleet Card program in late October
Continued emphasis on product optimization in fuel program
Finalized search for a Director of Fuel Procurement
Piloting the fuel price optimization software October through December
Optimized merchandise promotions to improve inside margins
Onboarded both a Vice President of Digital Customer Experience and a Director of Digital Marketing

Fuel - For the quarter, same-store gallons sold were down 1.1% with an average margin of 20.0 cents per gallon. "With the expanded resources in our fuel team, we have become more proactive at managing retail fuel pricing," said Handley. "Gross profit dollar growth was strong despite same-store gallon movement being under our annual guidance range for the second quarter, due mainly to softer consumer demand. We remain excited about this category moving forward, with product and price optimization, procurement opportunities, and the fleet card program expected to drive future benefits." Total gallons sold for the quarter were up 5.7% to 593.8 million gallons while gross profit dollars increased 7.2% to $118.7 million. Year to date, same-store gallons sold were down 0.3% with an average margin of 20.3 cents per gallon. Year to date, gross profit dollars increased 10.1% to $242.1 million.
Grocery and Other Merchandise - For the quarter, same-store sales were up 2.7% with an average margin of 32.4%. "The grocery and other merchandise category continues to perform well," said Handley. "For the second straight quarter, we realized stronger margins at the high end of our guidance range, which drove gross profit dollar growth. The packaged beverage and other tobacco subcategories led the way in contributing to that growth." For the second quarter, total grocery and other merchandise revenue increased 8.1% to $618.3 million, and gross profit dollars were up 9.3% to $200.2 million. Total revenue for the first six months was up 8.0% to $1.3 billion. Same-store sales year to date were up 2.9% with an average margin of 32.4%.
Prepared Food and Fountain - Same-store sales for the quarter were up 2.2% with an average margin of 62.4%. "Strategic price increases helped expand margin in the quarter in a competitive environment," said Handley. "Our breakfast daypart continues to be a strong contributor to overall results." Total prepared food and fountain revenue increased 8.0% to $283.1 million in the second quarter while gross profit dollars grew 10.1% to $176.7 million. For the first six months, total revenue increased 7.7% to $564.1 million. Year to date, same-store sales were up 2.0% with an average margin of 62.2%.
Operating Expenses - For the second quarter, total operating expenses increased 6.6% to $344.2 million. Year to date, operating expenses are up 9.2%. Same-store operating expenses excluding credit card fees were down 0.1% for the quarter. The increase in total operating expenses was primarily attributable to operating 94 more stores than the same quarter in the prior year. "Our second quarter results demonstrated our commitment to effectively controlling operating expenses," noted Handley. "Despite higher credit card fees and fleet fuel expenses, our team was able to continue to drive same-store operating





expenses down in the second quarter as compared to prior year. The largest contributor to that success was the continued efforts around managing the hours worked at our stores."
Expansion - The following table represents the roll forward of store growth through the second quarter of fiscal 2019:
 
Store Count
Stores at 4/30/18
2,073
New Store Construction
25
Acquisitions
3
Acquisitions not opened
(2)
Prior Acquisitions opened
4
Closed
(6)
Stores at 10/31/18
2,097
The Company had 23 acquisition stores under agreement to purchase and a land bank of 95 sites (in addition to 36 that were under construction) as of October 31, 2018. "We are pleased with our current growth opportunities," said Handley. "We remain encouraged with the acquisition environment and will continue to be a disciplined buyer. Combining acquisitions with our organic growth pipeline gives us the agility to pull multiple levers to drive further expansion."
Share Repurchase Program- The Company has $300 million remaining on its authorization from March 2018. There were no repurchases made against that authorization in the second quarter.
Dividend - At its December meeting, the Board of Directors declared a quarterly dividend of $0.29 per share. The dividend is payable February 15, 2019 to shareholders of record on February 1, 2019.
Fiscal 2019 Guidance -Below is a summary of the current fiscal 2019 guidance:
 
Same-store Sales
 
Margin
 
Previous
 
Current
 
Previous
 
Current
Fuel (Gallons and CPG)
1.5 - 3.0%
 
(1.0%) - 0.5%
 
18.5 - 20.5
 
19.0 - 21.0
Grocery and Other Merchandise
1.5 - 3.0%
 
1.5 - 3.0%
 
31.5 - 32.5%
 
31.5 - 32.5%
Prepared Food and Fountain
1.5 - 3.5%
 
1.5 - 3.5%
 
60.0 - 62.0%
 
60.0 - 62.0%
 
 
 
 
 
 
 
 
 
Previous
 
Current
 
 
 
 
Operating Expenses
8.5 - 10.5%
 
8.5 - 10.5%
 
 
 
 
Depreciation and Amortization
14.0 - 16.0%
 
13.0 - 15.0%
 
 
 
 
New Store Construction
60 stores
 
60 stores
 
 
 
 
Acquisitions
20+ stores
 
20+ stores
 
 
 
 
****





Casey’s General Stores, Inc.
Condensed Consolidated
Statements of Income
(Dollars in thousands, except share and per share amounts) (Unaudited)
 
Three Months Ended
October 31,
 
Six Months Ended
October 31,
 
2018
 
2017
 
2018
 
2017
Total revenue
$
2,538,005

 
$
2,153,745

 
$
5,126,437

 
$
4,247,484

Cost of goods sold (exclusive of depreciation and amortization, shown separately below)
2,027,684

 
1,686,088

 
4,094,348

 
3,303,130

Operating expenses
344,186

 
322,949

 
703,578

 
644,196

Depreciation and amortization
61,356

 
54,157

 
120,196

 
106,526

Interest, net
14,191

 
12,976

 
28,597

 
24,351

Income before income taxes
90,588

 
77,575

 
179,718

 
169,281

Federal and state income taxes
23,973

 
28,657

 
42,879

 
63,605

Net income
$
66,615

 
$
48,918

 
$
136,839

 
$
105,676

Net income per common share
 
 
 
 
 
 
 
Basic
$
1.82

 
$
1.29

 
$
3.73

 
$
2.77

Diluted
$
1.80

 
$
1.28

 
$
3.70

 
$
2.75

Basic weighted average shares
36,698,528

 
37,804,649

 
36,683,450

 
38,108,105

Plus effect of stock compensation
318,943

 
378,950

 
314,181

 
379,802

Diluted weighted average shares
37,017,471

 
38,183,599

 
36,997,631

 
38,487,907






Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
 
 
October 31, 2018
 
April 30, 2018
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
51,887

 
$
53,679

Receivables
46,875

 
45,045

Inventories
258,644

 
241,668

Prepaid expenses
7,923

 
5,766

Income tax receivable
16,849

 
50,682

Total current assets
382,178

 
396,840

Other assets, net of amortization
39,813

 
29,909

Goodwill
140,623

 
140,258

Property and equipment, net of accumulated depreciation of $1,715,433 at October 31, 2018 and $1,611,177 at April 30, 2018
2,983,043

 
2,902,920

Total assets
$
3,545,657

 
$
3,469,927

Liabilities and Shareholders’ Equity
 
 
 
Current liabilities
 
 
 
Notes payable to bank
$

 
$
39,600

Current maturities of long-term debt
15,384

 
15,374

Accounts payable
324,806

 
321,419

Accrued expenses
130,786

 
131,457

Total current liabilities
470,976

 
507,850

Long-term debt, net of current maturities
1,283,992

 
1,291,725

Deferred income taxes
374,665

 
341,946

Deferred compensation
15,584

 
15,928

       Insurance accruals, net of current portion
20,155

 
19,748

Other long-term liabilities
23,206

 
21,589

Total liabilities
2,188,578

 
2,198,786

Total shareholders’ equity
1,357,079

 
1,271,141

Total liabilities and shareholders’ equity
$
3,545,657

 
$
3,469,927

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, including our ability to execute our value creation plan or to realize benefits therefrom. 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.







Summary by Category (Amounts in thousands)
Three months ended 10/31/2018
Fuel
 
Grocery & Other
Merchandise
 
Prepared Food
& Fountain
 
Other
 
Total
Revenue
$
1,621,868

 
$
618,250

 
$
283,062

 
$
14,825

 
$
2,538,005

Revenue less cost of goods sold (exclusive of depreciation and amortization)
$
118,656

 
$
200,193

 
$
176,675

 
$
14,797

 
$
510,321

 
7.3
%
 
32.4
%
 
62.4
%
 
99.8
%
 
20.1
%
Fuel gallons
593,750

 
 
 
 
 
 
 
 
Three months ended 10/31/2017
 
 
 
 
 
 
 
 
 
Revenue
$
1,306,246

 
$
572,151

 
$
261,998

 
$
13,350

 
$
2,153,745

Revenue less cost of goods sold (exclusive of depreciation and amortization)
$
110,686

 
$
183,133

 
$
160,510

 
$
13,328

 
$
467,657

 
8.5
%
 
32.0
%
 
61.3
%
 
99.8
%
 
21.7
%
Fuel gallons
561,692

 
 
 
 
 
 
 
 
 
Summary by Category (Amounts in thousands)
Six months ended 10/31/2018
Fuel
 
Grocery & Other
Merchandise
 
Prepared Food
& Fountain
 
Other
 
Total
Revenue
$
3,269,285

 
$
1,263,050

 
$
564,065

 
$
30,037

 
$
5,126,437

Revenue less cost of goods sold (exclusive of depreciation and amortization)
$
242,132

 
$
409,119

 
$
350,859

 
$
29,979

 
$
1,032,089

 
7.4
%
 
32.4
%
 
62.2
%
 
99.8
%
 
20.1
%
Fuel gallons
1,195,545

 
 
 
 
 
 
 
 
Six months ended 10/31/2017
 
 
 
 
 
 
 
 
 
Revenue
$
2,527,231

 
$
1,169,565

 
$
523,838

 
$
26,850

 
$
4,247,484

Revenue less cost of goods sold (exclusive of depreciation and amortization)
$
219,898

 
$
373,497

 
$
324,155

 
$
26,804

 
$
944,354

 
8.7
%
 
31.9
%
 
61.9
%
 
99.8
%
 
22.2
%
Fuel gallons
1,126,739

 
 
 
 
 
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
F2019
0.5
%
 
(1.1
)%
 


 

 


F2019

20.5
¢
 

20.0
¢
 


 


 

F2018
1.7

 
1.9

 
3.8
%
 
2.0
 %
 
2.3
%
F2018
19.3

 
19.7

 

18.6
¢
 

16.3
¢
 

18.5
¢
F2017
3.1

 
3.7

 
2.6

 
(0.5
)
 
2.1

F2017
19.5

 
18.6

 
17.9

 
17.2

 
18.4

Grocery & Other Merchandise
 
Grocery & Other Merchandise
Same-store Sales
Margin
 
Q1
 
Q2
 
Q3
 
Q4
 
Fiscal
Year
 
Q1
 
Q2
 
Q3
 
Q4
 
Fiscal
Year
F2019
3.2
%
 
2.7
%
 


 


 


F2019
32.4
%
 
32.4
%
 


 


 


F2018
3.1

 
2.5

 
2.5
%
 
(0.4
)%
 
1.9
%
F2018
31.9

 
32.0

 
31.9
%
 
31.2
%
 
31.8
%
F2017
4.7

 
3.1

 
3.0

 
1.5

 
2.9

F2017
31.6

 
32.0

 
31.1

 
31.1

 
31.5

Prepared Food & Fountain
 
Prepared Food & Fountain
Same-store Sales
Margin
 
Q1
 
Q2
 
Q3
 
Q4
 
Fiscal
Year
 
Q1
 
Q2
 
Q3
 
Q4
 
Fiscal
Year
F2019
1.7
%
 
2.2
%
 


 


 


F2019
62.0
%
 
62.4
%
 


 


 


F2018
3.7

 
2.1

 
1.7
%
 
(1.3
)%
 
1.7
%
F2018
62.5

 
61.3

 
60.5
%
 
59.7
%
 
61.0
%
F2017
5.1

 
5.1

 
5.8

 
3.2

 
4.8

F2017
62.8

 
62.9

 
61.7

 
61.7

 
62.3







Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on December 11, 2018. The call will be broadcast live over the Internet at 9:30 a.m. CST. To access the call, go to the Press Releases and Webcasts section of our Web site at https://www.caseys.com/investor-relations/press-releases-and-webcasts. No access code is required. A webcast replay of the call will remain available in an archived format, on the Press Releases and Webcasts section of our Web site at https://www.caseys.com/investor-relations/press-releases-and-webcasts until December 11, 2022.