EX-99.1 2 q2fy2023earningspressrelea.htm EX-99.1 Document

Exhibit 99.1
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FOR IMMEDIATE RELEASE
Casey’s General Stores, Inc.
One SE Convenience Blvd
Ankeny, IA 50021
Casey's Announces Second Quarter Results; Updates Fiscal 2023 Outlook
Ankeny, IA, December 6, 2022 - Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq: CASY) a leading convenience store chain in the United States, today announced financial results for the three and six months ended October 31, 2022.

Second Quarter Key Highlights

•Diluted EPS of $3.67, up 42% from the same period a year ago.
•Inside same-store sales increased 7.9% compared to prior year, and 14.4% on a two-year stack basis, with an inside margin of 39.8%. Total inside gross profit increased 8.9% to $504.5 million compared to the prior year.
•Same-store fuel gallons were up 0.3% compared to prior year with a fuel margin of 40.5 cents per gallon. Total fuel gross profit increased 22.7% to $284.4 million compared to the prior year.
•Same-store operating expense excluding credit card fees were up 1.3%, favorably impacted by a 3% reduction in same-store labor hours.
•The Company is updating its Fiscal 2023 Outlook due to improved inside sales and operating expense performance.

“Thanks to our entire team, Casey's delivered another excellent quarter by growing inside sales while driving efficiency throughout the business,” said Darren Rebelez, President and CEO. “Inside same-store sales were driven by prepared food and dispensed beverages, most notably pizza and fountain sales. Grocery and general merchandise achieved impressive results in both alcoholic and non-alcoholic beverages. The fuel gross profit dollars remained strong as our fuel team executed at a high level again and struck the right balance between sales volume and gross profit margin. The resiliency of our business model along with the ability to effectively execute on our long-term strategic plan continues to drive shareholder value.”

Earnings
Three Months Ended October 31,Six Months Ended October 31,
2022202120222021
Net income (in thousands)$137,555 $96,831 $290,487 $215,990 
Diluted earnings per share$3.67 $2.59 $7.75 $5.78 
Adjusted EBITDA (in thousands)$276,296 $217,009 $569,505 $460,198 

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document), were up compared to the same period a year ago as higher profitability both inside the store and in fuel was partially offset by higher operating expenses due to operating 83 additional stores, as well as increased credit card fees resulting from the higher retail price of fuel.




Inside
Three Months Ended October 31,Six Months Ended October 31,
2022202120222021
Inside sales (in thousands)$1,268,436 $1,138,988 $2,535,053 $2,282,913 
Inside same-store sales7.9 %6.0 %7.0 %7.0 %
Grocery and general merchandise same-store sales6.9 %6.8 %6.1 %6.9 %
Prepared food and dispensed beverage same-store sales10.5 %4.1 %9.4 %7.3 %
Inside gross profit (in thousands)$504,474 $463,438 $1,008,734 $926,952 
Inside margin39.8 %40.7 %39.8 %40.6 %
Grocery and general merchandise margin33.3 %33.3 %33.6 %33.1 %
Prepared food and dispensed beverage margin56.7 %60.6 %56.2 %60.8 %

Total inside sales were up 11.4% for the quarter driven by strong performance in prepared food items including both pizza slices and whole pies, as well as non-alcoholic and alcoholic beverages, snacks and candy from the grocery and general merchandise category. Inside margin was down 90 basis points compared to the same quarter a year ago. Grocery and general merchandise margin was consistent with the prior year, while higher prepared food and dispensed beverage ingredient costs, notably cheese, partially offset by price adjustments, continued to pressure gross profit margin relative to the prior year.

Fuel1
Three Months Ended October 31,Six Months Ended October 31,
2022202120222021
Fuel gallons sold (in thousands)702,043 668,757 1,391,510 1,336,291 
Same-store gallons sold0.3 %2.5 %(1.2)%5.6 %
Fuel gross profit (in thousands)$284,407 $231,883 $592,595 $466,358 
Fuel margin (cents per gallon, excluding credit card fees)40.5 ¢34.7 ¢42.6 ¢34.9 ¢

Total gallons increased 5.0% compared to the prior year due to the store count increase while same-store gallons sold were up 0.3% versus the prior year. The Company’s total fuel gross profit was up 22.7% versus the prior year, favorably impacted by higher cents per gallon. The Company sold $11.1 million in renewable fuel credits (RINs) in the second quarter, an increase of $4.8 million from the same quarter in the prior year.

Operating Expenses
Three Months Ended October 31,Six Months Ended October 31,
2022202120222021
Operating expenses (in thousands)$539,207 $500,644 $1,082,478 $979,572 
Credit card fees (in thousands)$60,469 $52,072 $127,696 $101,515 
Same-store operating expense excluding credit card fees1.3 %8.3 %1.9 %12.7 %

Operating expenses increased 7.7% during the second quarter. Over 2% of the increase is due to operating 83 more stores than prior year and over 1% of the change is related to an increase in same-store credit card fees from higher retail fuel prices. Approximately 1% of the increase was due to a non-cash impairment charge and approximately 1% of the increase is from internal fuel expense related to grocery self-distribution. Same-store operating expense excluding credit card fees was also up 1.3%, benefited by a 3% reduction in same-store hours.
1 Fuel category does not include wholesale fuel activity, which is included in Other.



Expansion
Store Count
Stores at 4/30/20222,452
New store construction9
Acquisitions3
Acquisitions not opened(2)
Prior acquisitions opened2
Closed(1)
Stores at 10/31/20222,463

Liquidity
At October 31, 2022, the Company had approximately $884 million in available liquidity, consisting of approximately $415 million in cash and cash equivalents on hand and $469 million in undrawn borrowing capacity on existing lines of credit.

Share Repurchase
The Company has $400 million remaining under its existing share repurchase authorization. There were no repurchases made against that authorization in the second quarter.

Dividend
At its December meeting, the Board of Directors voted to pay a quarterly dividend of $0.38 per share. The dividend is payable February 15, 2023 to shareholders of record on February 1, 2023.

Fiscal 2023 Outlook
Due to the strong year-to-date performance the Company is modifying its fiscal 2023 outlook. The Company now expects same-store inside sales to be approximately 5% to 7%. Total operating expense increase is expected to be near the low end of the annual range which was approximately 9% to 10%. The tax rate is now expected to be between approximately 24% and 25% for the year.

The Company is not updating its outlook for the following metrics. Inside margin is expected to be approximately 40%. The Company expects same-store fuel gallons to be flat to 2% higher. The Company expects to add approximately 80 stores in fiscal 2023, and expects to exceed our stated three year commitment of 345 units. Interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $320 million and the purchase of property plant and equipment is expected to be approximately $450 to $500 million, including approximately $135 million in one-time store remodel costs for recently acquired stores.



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 October 31,Six Months Ended October 31,
 2022202120222021
Total revenue$3,978,575 $3,262,942 $8,433,219 $6,444,935 
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)3,167,633 2,545,352 6,786,027 5,003,458 
Operating expenses539,207 500,644 1,082,478 979,572 
Depreciation and amortization78,117 74,258 154,412 150,146 
Interest, net13,502 13,520 27,318 27,250 
Income before income taxes180,116 129,168 382,984 284,509 
Federal and state income taxes42,561 32,337 92,497 68,519 
Net income$137,555 $96,831 $290,487 $215,990 
Net income per common share
Basic$3.69 $2.61 $7.80 $5.81 
Diluted$3.67 $2.59 $7.75 $5.78 
Basic weighted average shares37,277,080 37,162,984 37,250,580 37,144,744 
Plus effect of stock compensation246,679 205,669 215,335 205,669 
Diluted weighted average shares37,523,759 37,368,653 37,465,915 37,350,413 


Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
 
October 31, 2022April 30, 2022
Assets
Current assets
Cash and cash equivalents$414,798 $158,878 
Receivables157,491 108,028 
Inventories393,320 396,199 
Prepaid expenses27,734 17,859 
Income taxes receivable— 44,071 
Total current assets993,343 725,035 
Other assets, net of amortization177,593 187,219 
Goodwill612,934 612,934 
Property and equipment, net of accumulated depreciation of $2,530,393 at October 31, 2022 and $2,425,709 at April 30, 20224,006,594 3,980,542 
Total assets$5,790,464 $5,505,730 
Liabilities and Shareholders’ Equity
Current liabilities
Current maturities of long-term debt and finance lease obligations$33,996 $24,466 
Accounts payable587,030 588,783 
Accrued expenses298,962 291,429 
Income taxes payable1,310 — 
Total current liabilities921,298 904,678 
Long-term debt and finance lease obligations, net of current maturities1,639,580 1,663,403 
Deferred income taxes545,756 520,472 
Deferred compensation11,668 12,746 
       Insurance accruals, net of current portion29,816 27,957 
Other long-term liabilities129,530 135,636 
Total liabilities3,277,648 3,264,892 
Total shareholders’ equity2,512,816 2,240,838 
Total liabilities and shareholders’ equity$5,790,464 $5,505,730 


Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 Six months ended October 31,
 20222021
Cash flows from operating activities:
Net income$290,487 $215,990 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization154,412 150,146 
Amortization of debt issuance costs691 717 
Share-based compensation25,875 17,500 
Loss (gain) on disposal of assets and impairment charges4,791 (1,707)
Deferred income taxes25,284 58,073 
Changes in assets and liabilities:
Receivables(49,463)(8,087)
Inventories3,023 (39,531)
Prepaid expenses(9,875)(13,698)
Accounts payable(14,330)87,831 
Accrued expenses6,224 (6,134)
Income taxes46,707 (6,898)
Other, net2,273 1,175 
Net cash provided by operating activities486,099 455,377 
Cash flows from investing activities:
Purchase of property and equipment(177,327)(123,518)
Payments for acquisition of businesses, net of cash acquired(2,692)(626,126)
Proceeds from sales of assets10,052 21,890 
Net cash used in investing activities(169,967)(727,754)
Cash flows from financing activities:
Proceeds from long-term debt— 300,000 
Payments of long-term debt(17,302)(9,750)
Payments of debt issuance costs— (249)
Proceeds from exercise of stock options— 133 
Payments of cash dividends(27,292)(25,234)
Tax withholdings on employee share-based awards(15,618)(17,370)
Net cash (used in) provided by financing activities(60,212)247,530 
Net increase (decrease) in cash and cash equivalents255,920 (24,847)
Cash and cash equivalents at beginning of the period158,878 336,545 
Cash and cash equivalents at end of the period$414,798 $311,698 
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
 Six months ended October 31,
 20222021
Cash paid during the period for:
Interest, net of amount capitalized$25,077 $25,076 
Income taxes, net17,696 14,937 
Noncash investing and financing activities:
       Purchased property and equipment in accounts payable59,236 50,713 
       Right-of-use assets obtained in exchange for new finance lease liabilities2,119 47,775 
       Right-of-use assets obtained in exchange for new operating lease liabilities1,163 40,944 


Summary by Category (Amounts in thousands)
Three months ended October 31, 2022FuelGrocery & General
Merchandise		Prepared Food & Dispensed BeverageOtherTotal
Revenue$2,635,920 $917,176 $351,260 $74,219 $3,978,575 
Gross profit$284,407 $305,250 $199,224 $22,061 $810,942 
10.8 %33.3 %56.7 %29.7 %20.4 %
Fuel gallons sold702,043 
Three months ended October 31, 2021
Revenue$2,048,831 $829,484 $309,504 $75,123 $3,262,942 
Gross profit$231,883 $275,940 $187,498 $22,269 $717,590 
11.3 %33.3 %60.6 %29.6 %22.0 %
Fuel gallons sold668,757 
Summary by Category (Amounts in thousands)
Six Months Ended October 31, 2022FuelGrocery & General
Merchandise		Prepared Food & Dispensed BeverageOtherTotal
Revenue$5,732,262 $1,840,240 $694,813 $165,904 $8,433,219 
Gross profit$592,595 $618,557 $390,177 $45,863 $1,647,192 
10.3 %33.6 %56.2 %27.6 %19.5 %
Fuel gallons sold1,391,510 
Six Months Ended October 31, 2021
Revenue$4,015,986 $1,664,969 $617,944 $146,036 $6,444,935 
Gross profit$466,358 $551,348 $375,604 $48,167 $1,441,477 
11.6 %33.1 %60.8 %33.0 %22.4 %
Fuel gallons sold1,336,291 
 


Fuel GallonsFuel Margin
Same-store Sales(Cents per gallon, excluding credit card fees)
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F2023(2.3)%0.3 %— — — F202344.7 ¢40.5 ¢— — — 
F20229.0 2.5 5.7 %1.5 %4.4 %F202235.1 34.7 38.3 ¢36.2 ¢36.0 ¢
F2021(14.6)(8.6)(12.1)6.4 (8.1)F202138.2 35.3 32.9 33.0 34.9 
Grocery & General MerchandiseGrocery & General Merchandise
Same-store SalesMargin
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F20235.5 %6.9 %— — — F202333.9 %33.3 %— — — 
F20227.0 6.8 7.7 %4.3 %6.3 %F202233.0 33.3 32.0 %32.5 %32.7 %
F20213.6 6.6 5.4 12.5 6.6 F202132.2 33.3 30.7 31.8 32.0 
Prepared Food & Dispensed BeveragePrepared Food & Dispensed Beverage
Same-store SalesMargin
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F20238.4 %10.5 %— — — F202355.6 %56.7 %— — — 
F202210.8 4.1 7.4 %7.6 %7.4 %F202261.0 60.6 58.0 %56.9 %59.2 %
F2021(9.8)(3.6)(5.0)13.4 (2.1)F202159.7 60.1 60.6 60.1 60.1 




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 six months ended October 31, 2022 and 2021:
(in thousands)Three Months Ended October 31,Six Months Ended October 31,
2022202120222021
Net income$137,555 $96,831 $290,487 $215,990 
Interest, net13,502 13,520 27,318 27,250 
Federal and state income taxes42,561 32,337 92,497 68,519 
Depreciation and amortization78,117 74,258 154,412 150,146 
EBITDA271,735 216,946 564,714 461,905 
Loss (gain) on disposal of assets and impairment charges4,561 63 4,791 (1,707)
Adjusted EBITDA$276,296 $217,009 $569,505 $460,198 
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 COVID-19 and related governmental actions, 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 December 7, 2022. 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:Media Relations Contact:
Brian Johnson (515) 965-6587Katie Petru (515) 446-6772