EX-99.1 2 dex991.htm PRESS RELEASE

Press Release

Exhibit 99.1

NEWS RELEASE FOR IMMEDIATE RELEASE
Casey’s General Stores, Inc. One S.E. Convenience Blvd. Ankeny, IA 50021				Nasdaq Symbol: CASY                     CONTACT: Bill Walljasper                     (515) 965-6505

Casey’s Acquires 64 Stores in the Third Quarter;

Positioned Well for Future Growth

Ankeny, IA, March 7, 2011 – Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported $0.34 in basic earnings per share for the third quarter of fiscal 2011 ended January 31, 2011, compared to $0.34 for the same quarter a year ago. Year to date, basic earnings per share were $1.64 versus $1.87 for the same period last year. The results include approximately $27.4 million in expenses pertaining to the Company’s recapitalization plan completed in the second quarter, as well as the unsolicited hostile offer and related actions by Alimentation Couche-Tard Inc., of which $1.7 million was recorded in the third quarter. Without those expenses, basic earnings per share would have been $0.37 for the quarter and $2.06 year to date. Earnings in the quarter were impacted by compressed margins due to a competitive cigarette environment, rising commodity costs and increased operating expenses related to store openings. “Although rebranding a large number of stores in such a short period of time put a temporary strain on our operations, we are encouraged with our ability to drive same store customer traffic nearly 5%, resulting in double digit sales increases across all lines of our business,” stated President and CEO Robert J Myers. “We believe we are gaining market share and the Company is positioned well for future revenue and earnings growth.”

Gasoline – The Company’s annual goal is to increase same-store gasoline gallons sold 1% with an average margin of 13.5 cents per gallon. For the third quarter, same-store gallons sold were up 3.5% with an average margin of 13.9 cents per gallon. “This category has exceeded our expectations in both gallon growth and margin throughout the first nine months of the fiscal year,” said Myers. Same-store gallons sold for the year increased 2.8% with an average margin of 15.1 cents, while gross profit rose 16.5%. For the year, total gallons sold were up 9.3% to 1.1 billion.

Grocery & Other Merchandise – Casey’s annual goal is to increase same-store sales 6% with an average margin of 33.9%. For the nine months ended January 31, 2011, same-store sales were up 4.6% with an average margin of 32.3%. For the quarter, same-store sales rose 5.8% with an average margin of 30.9%. The Company experienced double digit sales growth across all major areas of this category in the third quarter, producing a 13.8% total increase in grocery and other merchandise revenue. The margin was affected by a competitive cigarette pricing environment, promotional activity in some beverage items and a larger LIFO charge primarily due to higher cigarette costs. The LIFO charge in the third quarter was approximately $1.1 million higher than the prior year’s third quarter. “Even though the cigarette environment continues to be challenging, we experienced same store unit movement increases during the third quarter despite a national average decline,” said Myers. “Cigarettes are an important destination item in the convenience store industry. Being competitive and maintaining market share is imperative for long-term sales growth for other products.” Despite these items along with commodity pressures, gross profit in the third quarter was up 7.7%. Total sales for the year are up 10.6% to $902.2 million.

Prepared Food & Fountain – The goal for fiscal 2011 is to increase same-store sales 8% with an average margin of 63.1%. For the quarter, same-store sales were up 10.5% with an average margin of 62.1%, down from the same period a year ago primarily due to a rise in commodity prices. “Sales rose 16.5% during the quarter, which drove an increase in gross profit over 15%,” said Myers. “We are pleased with the gains we have been able to achieve in prepared foods despite escalating commodity pressures, and we remain optimistic

about the continued performance of this category.” For the nine months, same store sales were up 6.5% with an average margin of 62.9%. Year to date, total sales were up 12.2% to $309.8 million compared to $276 million.

Operating Expenses – At the nine month mark, operating expenses increased 16.8% to $457.2 million. Excluding $16 million of expenses related to the unsolicited hostile offer by Couche-Tard, expenses would have increased 12.7%. For the quarter, operating expenses were up 18.5%, driven by an increase in credit card fees, fuel expense and insurance. These three combined were up approximately $6.3 million. “We anticipated that the record number of stores acquired in the third quarter would impact operating expenses,” said Myers. “However, we still expect these stores to be highly accretive to earnings in their first full year of operation, and provide even further earnings enhancements long-term when we implement our food service program.”

Expansion – The annual goal is to increase the total number of stores 4-6%. Year to date, the Company acquired 74 stores and completed 14 new-store constructions. “We are pleased with the recent acquisition environment and we have written agreements for an additional 20 locations that we expect to complete in the next 6 months,” said Myers. The Company also replaced 9 locations during the first nine months of the year and completed 39 major remodels.

Dividend – At its March meeting, the Board of Directors declared a quarterly dividend of $0.135 per share. The dividend is payable May 16, 2011 to shareholders of record on May 2, 2011.

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Casey’s General Stores, Inc. Condensed Consolidated Statements of Earnings (Dollars in thousands, except share and per share amounts) (Unaudited)

		Three months ended January 31,								Nine months ended January 31,
		2011				2010				2011				2010
Total revenue		$	1,374,199			$	1,114,377			$	4,085,745			$	3,457,281
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)			1,171,668				937,777				3,421,866				2,854,192
Gross profit			202,531				176,600				663,879				603,089
Operating expenses			151,506				127,883				457,155				391,254
Depreciation and amortization			20,769				18,368				60,373				54,846
Interest, net			8,908				2,748				19,630				8,159
Loss on early retirement of debt			—				—				11,350				—
Earnings before income taxes			21,348				27,601				115,371				148,830
Federal and state income taxes			8,473				10,359				43,518				53,803
Net earnings		$	12,875			$	17,242			$	71,853			$	95,027
Earnings per common share
Basic		$	.34			$	.34			$	1.64			$	1.87
Diluted		$	.34			$	.34			$	1.63			$	1.86
Basic weighted average shares outstanding			37,938,394				50,914,462				43,727,582				50,892,629
Plus effect of stock options			305,056				185,024				272,828				146,903
Diluted weighted average shares outstanding			38,243,450				51,099,486				44,000,410				51,039,532

Casey’s General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

		January 31, 2011				April 30, 2010
Assets
Current assets
Cash and cash equivalents		$	64,446			$	151,676
Receivables			16,203				12,111
Inventories			134,721				124,951
Prepaid expenses			1,578				1,129
Deferred income taxes			11,062				9,417
Income taxes receivable			36,501				10,801
Total current assets			264,511				310,085
Other assets, net of amortization			11,736				10,232
Goodwill			86,422				57,547
Property and equipment, net of accumulated depreciation of $760,421 at January 31, 2011, and of $706,994 at April 30, 2010			1,171,586				1,010,911
Total assets		$	1,534,255			$	1,388,775
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable		$	9,000			$	—
Current maturities of long-term debt			1,319				24,577
Accounts payable			159,252				145,334
Accrued expenses			87,993				70,975
Total current liabilities			257,564				240,886
Long-term debt, net of current maturities			678,864				154,754
Deferred income taxes			182,595				141,229
Deferred compensation			13,555				12,788
Other long-term liabilities			16,508				14,799
Total liabilities			1,149,086				564,456
Total shareholders’ equity			385,169				824,319
Total liabilities and shareholders’ equity		$	1,534,255			$	1,388,775

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. 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.

Sales and Gross Profit by Product

(Amounts in thousands)

Nine months ended 1/31/11		Gasoline				Grocery & Other Merchandise				Prepared Food & Fountain				Other				Total
Sales		$	2,855,413			$	902,181			$	309,754			$	18,397			$	4,085,745
Gross profit		$	159,762			$	291,065			$	194,697			$	18,355			$	663,879
Margin			5.6	%			32.3	%			62.9	%			99.8	%			16.2	%
Gasoline gallons			1,059,146
Nine months ended 1/31/10
Sales		$	2,350,541			$	816,074			$	276,042			$	14,624			$	3,457,281
Gross profit		$	137,176			$	275,356			$	175,976			$	14,581			$	603,089
Margin			5.8	%			33.7	%			63.7	%			99.7	%			17.4	%
Gasoline gallons			969,268

Gasoline Gallons																						Gasoline Margin
Same-store Sales Growth																						(Cents per gallon, excluding credit card fees)
		Q1				Q2				Q3				Q4				Fiscal Year						Q1				Q2				Q3				Q4				Fiscal Year
F2011			1.5	%			3.6	%			3.5	%										F2011			16.4	¢			14.9	¢			13.9	¢
F2010			3.2				-0.7				-2.9				0.2	%			-0.1	%		F2010			15.7				14.3				12.4				13.1	¢			13.9	¢
F2009			0.5				0.2				2.1				1.2				1.0			F2009			15.6				13.7				9.9				12.1				12.9
Grocery & Other Merchandise																						Grocery & Other Merchandise
Same-store Sales Growth																						Margin
		Q1				Q2				Q3				Q4				Fiscal Year						Q1				Q2				Q3				Q4				Fiscal Year
F2011			2.0	%			6.9	%			5.8	%										F2011			32.8	%			32.9	%			30.9	%
F2010			6.4				1.9				1.7				3.1	%			3.3	%		F2010			34.3				34.1				32.7				33.1	%			33.6	%
F2009			4.7				4.9				6.5				8.0				5.9			F2009			34.0				33.9				32.9				33.7				33.7
Prepared Food & Fountain																						Prepared Food & Fountain
Same-store Sales Growth																						Margin
		Q1				Q2				Q3				Q4				Fiscal Year						Q1				Q2				Q3				Q4				Fiscal Year
F2011			2.4	%			7.2	%			10.5	%										F2010			63.8	%			62.7	%			62.1	%
F2010			6.6				3.4				1.4				5.3	%			4.2	%		F2010			63.8				64.6				62.8				64.1	%			63.8	%
F2009			12.3				9.3				8.1				7.2				9.1			F2009			60.5				60.6				61.8				62.7				61.4

Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during

a conference call on March 8, 2011. The call will be broadcast live over the Internet at 9:30 a.m. CST via the

Investor Relations section of our Web site and will be available in an archived format.