EX-99.1 2 q2fy2024earningspressrelea.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
Ankeny, IA, December 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 and six months ended October 31, 2023.

Second Quarter Key Highlights

•Diluted EPS of $4.24, up 16% from the same period a year ago. Net income was $159 million, up 15%, and EBITDA1 was $306 million, up 13%, from the same period a year ago.
•Inside same-store sales increased 2.9% compared to prior year, and 11.0% on a two-year stack basis, with an inside margin of 41.1%. Total inside gross profit increased 9.7% to $553.3 million compared to the prior year.
•Same-store fuel gallons were flat (0.0%) compared to prior year with a fuel margin of 42.3 cents per gallon. Total fuel gross profit increased 8.6% to $308.8 million compared to the prior year.
•Same-store operating expenses excluding credit card fees were up 2.1%, favorably impacted by a 2% reduction in same-store labor hours.
•Casey's built or acquired 59 stores in the quarter and recently entered Texas, its 17th state, with a 22-store acquisition that closed in November.

"Due to the hard work of our team, Casey's delivered an outstanding second quarter highlighted by strong inside and fuel 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 bakery performing exceptionally well. Our fuel team continues to do an excellent job finding the right balance between gallon growth and gross profit margin, as evidenced by another strong fuel margin quarter while same-store gallons were flat. The team continued to effectively manage the stores by reducing same-store labor hours while growing the business at the same time.”

Earnings
Three Months Ended October 31,Six Months Ended October 31,
2023202220232022
Net income (in thousands)$158,782 $137,555 $328,019 $290,487 
Diluted earnings per share$4.24 $3.67 $8.76 $7.75 
EBITDA (in thousands)$305,858 $271,735 $622,757 $564,714 

For the quarter, net income, diluted EPS, and EBITDA were up compared to the same period a year ago primarily due to higher profitability inside the store and higher fuel margin partially offset by higher operating expenses due to operating 129 additional stores.


1 EBITDA is reconciled to net income below.


Inside
Three Months Ended October 31,Six Months Ended October 31,
2023202220232022
Inside sales (in thousands)$1,346,911 $1,268,436 $2,716,660 $2,535,053 
Inside same-store sales2.9 %7.9 %4.2 %7.0 %
Grocery and general merchandise same-store sales1.7 %6.9 %3.5 %6.1 %
Prepared food and dispensed beverage same-store sales6.1 %10.5 %5.9 %9.4 %
Inside gross profit (in thousands)$553,264 $504,474 $1,109,698 $1,008,734 
Inside margin41.1 %39.8 %40.8 %39.8 %
Grocery and general merchandise margin34.0 %33.3 %34.0 %33.6 %
Prepared food and dispensed beverage margin59.0 %56.7 %58.6 %56.2 %

Total inside sales were up 6.2% for the quarter driven by strong performance in the prepared food and dispensed beverage category, including whole pizza pies, bakery, and dispensed beverages as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise category. Inside margin was up 130 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 sales of private label products.

Fuel2
Three Months Ended October 31,Six Months Ended October 31,
2023202220232022
Fuel gallons sold (in thousands)730,439 702,043 1,444,429 1,391,510 
Same-store gallons sold— %0.3 %0.2 %(1.2)%
Fuel gross profit (in thousands)$308,835 $284,407 $605,813 $592,595 
Fuel margin (cents per gallon, excluding credit card fees)42.3 ¢40.5 ¢41.9 ¢42.6 ¢

For the quarter, total fuel gallons sold increased 4.0% compared to the prior year primarily due to the store count increase, while same-store gallons were flat versus the prior year. The Company’s total fuel gross profit was up 8.6% versus the prior year. The Company sold $8.4 million in renewable fuel credits (RINs) in the second quarter, a decrease of $2.7 million from the same quarter in the prior year.

Operating Expenses
Three Months Ended October 31,Six Months Ended October 31,
2023202220232022
Operating expenses (in thousands)$579,703 $539,207 $1,140,558 $1,082,478 
Credit card fees (in thousands)$62,917 $60,469 $123,902 $127,696 
Same-store operating expenses excluding credit card fees2.1 %1.3 %2.6 %1.9 %

Operating expenses increased 7.5% during the second quarter. Over 3% of the increase is due to operating 129 more stores than prior year. Total same-store employee expense contributed to 1% of the increase, as the increase in labor rate was partially offset by a reduction in same-store labor hours. The Company also incurred higher variable incentive compensation, repair, maintenance, and insurance expense that composed 2% of the increase.
2 Fuel category does not include wholesale fuel activity, which is included in Other.


Expansion
Store Count
April 30, 20232,521 
New store construction13 
Acquisitions60
Acquisitions not opened(5)
Prior acquisitions opened5 
Closed(2)
October 31, 20232,592 

Liquidity
At October 31, 2023, the Company had approximately $1.3 billion in available liquidity, consisting of approximately $410 million in cash and cash equivalents on hand and $900 million in available borrowing capacity on existing lines of credit.

Share Repurchase
During the second quarter, the Company repurchased approximately $30 million of shares. The Company has approximately $340 million remaining under its existing share repurchase authorization.

Dividend
At its December meeting, the Board of Directors approved a quarterly dividend of $0.43 per share. The dividend is payable February 15, 2024, to shareholders of record on February 1, 2024.

Fiscal 2024 Outlook
As a result of the strong financial performance and unit growth year-to-date, fiscal 2024 EBITDA growth is expected to be in-line with the long-term strategic plan's goal of 8% to 10%. The Company also expects to repurchase at least $100 million in shares throughout the fiscal year. Same-store inside sales are expected to increase 3.5% to 5%. Net interest expense is expected to be approximately $53 million. The tax rate is now expected to be approximately 23% to 25% for the year.
As discussed in the first quarter, the Company now expects to add at least 150 stores in fiscal 2024, more than the originally planned 110. As a result of this, total operating expenses are now 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. Depreciation and amortization is now expected to be approximately $350 million for the year.

The Company is not updating its outlook for the following metrics. 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%. The purchase of property and equipment is expected to be $500 to $550 million.






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,
 2023202220232022
Total revenue$4,064,400 $3,978,575 $7,933,651 $8,433,219 
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)3,178,839 3,167,633 6,170,336 6,786,027 
Operating expenses579,703 539,207 1,140,558 1,082,478 
Depreciation and amortization85,598 78,117 168,503 154,412 
Interest, net12,306 13,502 24,801 27,318 
Income before income taxes207,954 180,116 429,453 382,984 
Federal and state income taxes49,172 42,561 101,434 92,497 
Net income$158,782 $137,555 $328,019 $290,487 
Net income per common share
Basic$4.27 $3.69 $8.80 $7.80 
Diluted$4.24 $3.67 $8.76 $7.75 
Basic weighted average shares37,227,932 37,277,080 37,264,442 37,250,580 
Plus effect of stock compensation203,143 246,679 187,811 215,335 
Diluted weighted average shares37,431,075 37,523,759 37,452,253 37,465,915 


Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
 
October 31, 2023April 30, 2023
Assets
Current assets
Cash and cash equivalents$409,891 $378,869 
Receivables146,976 120,547 
Inventories418,901 376,085 
Prepaid expenses32,800 22,107 
Income taxes receivable2,142 23,347 
Total current assets1,010,710 920,955 
Other assets, net of amortization204,458 192,153 
Goodwill619,667 615,342 
Property and equipment, net of accumulated depreciation of $2,762,677 at October 31, 2023 and $2,620,149 at April 30, 20234,392,626 4,214,820 
Total assets$6,227,461 $5,943,270 
Liabilities and Shareholders’ Equity
Current liabilities
Current maturities of long-term debt and finance lease obligations$53,166 $52,861 
Accounts payable601,310 560,546 
Accrued expenses295,350 313,718 
Total current liabilities949,826 927,125 
Long-term debt and finance lease obligations, net of current maturities1,596,786 1,620,513 
Deferred income taxes582,825 543,598 
       Insurance accruals, net of current portion34,064 32,312 
Other long-term liabilities166,569 159,056 
Total liabilities3,330,070 3,282,604 
Total shareholders’ equity2,897,391 2,660,666 
Total liabilities and shareholders’ equity$6,227,461 $5,943,270 


Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 Six months ended October 31,
 20232022
Cash flows from operating activities:
Net income$328,019 $290,487 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization168,503 154,412 
Amortization of debt issuance costs555 691 
Change in excess replacement cost over LIFO inventory valuation7,946 16,927 
Share-based compensation19,485 25,875 
(Gain) loss on disposal of assets and impairment charges(232)4,791 
Deferred income taxes39,353 25,284 
Changes in assets and liabilities:
Receivables(21,897)(49,463)
Inventories(44,714)(13,904)
Prepaid expenses(10,693)(9,875)
Accounts payable(10,400)(14,330)
Accrued expenses(20,925)6,224 
Income taxes21,992 46,707 
Other, net4,788 2,273 
Net cash provided by operating activities481,780 486,099 
Cash flows from investing activities:
Purchase of property and equipment(175,955)(177,327)
Payments for acquisition of businesses, net of cash acquired(139,359)(2,692)
Proceeds from sales of assets8,291 10,052 
Net cash used in investing activities(307,023)(169,967)
Cash flows from financing activities:
Payments of long-term debt and finance lease obligations(35,135)(17,302)
Payments of cash dividends(30,988)(27,292)
Repurchase of common stock(59,491)— 
Tax withholdings on employee share-based awards(18,121)(15,618)
Net cash used in financing activities(143,735)(60,212)
Net increase in cash and cash equivalents31,022 255,920 
Cash and cash equivalents at beginning of the period378,869 158,878 
Cash and cash equivalents at end of the period$409,891 $414,798 
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
 Six months ended October 31,
 20232022
Cash paid during the period for:
Interest, net of amount capitalized$31,429 $25,077 
Income taxes, net36,037 17,696 
Noncash investing and financing activities:
       Purchased property and equipment in accounts payable78,684 59,236 
       Right-of-use assets obtained in exchange for new finance lease liabilities11,216 2,119 
       Right-of-use assets obtained in exchange for new operating lease liabilities8,273 1,163 


Summary by Category (Amounts in thousands)
Three months ended October 31, 2023Prepared Food & Dispensed BeverageGrocery & General
Merchandise		FuelOtherTotal
Revenue$382,481 $964,430 $2,646,478 $71,011 $4,064,400 
Gross profit$225,664 $327,600 $308,835 $23,462 $885,561 
59.0 %34.0 %11.7 %33.0 %21.8 %
Fuel gallons sold730,439 
Three months ended October 31, 2022
Revenue$351,260 $917,176 $2,635,920 $74,219 $3,978,575 
Gross profit$199,224 $305,250 $284,407 $22,061 $810,942 
56.7 %33.3 %10.8 %29.7 %20.4 %
Fuel gallons sold702,043 
Summary by Category (Amounts in thousands)
Six months ended October 31, 2023Prepared Food & Dispensed BeverageGrocery & General
Merchandise		FuelOtherTotal
Revenue$755,294 $1,961,366 $5,073,811 $143,180 $7,933,651 
Gross profit$442,525 $667,173 $605,813 $47,804 $1,763,315 
58.6 %34.0 %11.9 %33.4 %22.2 %
Fuel gallons sold1,444,429 
Six months ended October 31, 2022
Revenue$694,813 $1,840,240 $5,732,262 $165,904 $8,433,219 
Gross profit$390,177 $618,557 $592,595 $45,863 $1,647,192 
56.2 %33.6 %10.3 %27.6 %19.5 %
Fuel gallons sold1,391,510 


Prepared Food & Dispensed BeveragePrepared Food & Dispensed Beverage
Same-store SalesMargin
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F20245.9 %6.1 %F202458.2 %59.0 %
F20238.4 10.5 5.0 %4.9 %7.1 %F202355.6 56.7 57.3 %56.8 %56.6 %
F202210.8 4.1 7.4 7.6 7.4 F202261.0 60.6 58.0 56.9 59.2 
Grocery & General MerchandiseGrocery & General Merchandise
Same-store SalesMargin
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F20245.2 %1.7 %F202434.1 %34.0 %
F20235.5 6.9 5.8 %7.1 %6.3 %F202333.9 33.3 34.0 %33.0 %33.6 %
F20227.0 6.8 7.7 4.3 6.3 F202233.0 33.3 32.0 32.5 32.7 
Fuel GallonsFuel Margin
Same-store Sales(Cents per gallon, excluding credit card fees)
 Q1Q2Q3Q4Fiscal
Year		 Q1Q2Q3Q4Fiscal
Year
F20240.4 %— %F202441.6 ¢42.3 ¢
F2023(2.3)0.3 (0.5)%— %(0.8)%F202344.7 40.5 40.7 ¢34.6 ¢40.2 ¢
F20229.0 2.5 5.7 1.5 4.4 F202235.1 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 six months ended October 31, 2023 and 2022:
(in thousands)Three Months Ended October 31,Six Months Ended October 31,
2023202220232022
Net income$158,782 $137,555 $328,019 $290,487 
Interest, net12,306 13,502 24,801 27,318 
Federal and state income taxes49,172 42,561 101,434 92,497 
Depreciation and amortization85,598 78,117 168,503 154,412 
EBITDA305,858 271,735 622,757 564,714 
Loss (gain) on disposal of assets and impairment charges1,216 4,561 (232)4,791 
Adjusted EBITDA$307,074 $276,296 $622,525 $569,505 
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 December 11, 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:Media Relations Contact:
Brian Johnson (515) 965-6587Katie Petru (515) 446-6772