EX-99.1 4 q2fy2021earningspressr.htm EX-99.1
Exhibit 99.1

FOR IMMEDIATE RELEASE
Casey’s General Stores, Inc.
One SE Convenience Blvd
Ankeny, IA 50021

Casey's Posts Record Second Quarter Results and Raises Dividend
Ankeny, IA, December 7, 2020 - Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq symbol 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, 2020.
Second Quarter Key Highlights
•Diluted earnings per share of $3.00 compared to $2.21 for the same period a year ago, an increase of 36%.
•Fuel gross profit increased 45% with a fuel margin of 35.3 cents per gallon. Same-store gallons sold decreased 8.6% compared to prior year but improved sequentially from first quarter.
•Inside same-store sales increased 3.5% with a margin of 41.0%, inside gross profit increased 2.8%.
•Digital sales increased 127% compared to prior year. Casey’s Rewards recently exceeded 3 million members.
•The Board of Directors increased the dividend to $0.34 per share, an increase of 6%.
•Buchanan Energy acquisition expected to close in December.
“Casey’s had a remarkable second quarter and is well on our way to executing our long-term strategic plan.” said President and CEO Darren Rebelez. “The Company delivered well-balanced financial results, with contributions from both ongoing strong fuel profitability and inside sales volume and profit improvements. Casey’s also recently announced an agreement for the largest acquisition in the Company’s history, the 94-store Bucky’s chain located primarily in Illinois and Nebraska. Finally, the Board's decision to raise the dividend is a sign of continuing confidence in the Company’s ability to achieve strong financial results and maintain our already excellent financial flexibility in both the short and long term.”
Earnings

| Three Months Ended October 31, |  | Six Months Ended October 31,
| 2020 |  | 2019 |  | 2020 |  | 2019
Net income (in thousands) | $ | 111,983 |  |  | $ | 81,981 |  |  | $ | 232,575 |  |  | $ | 167,796 |
Diluted earnings per share | $ | 3.00 |  |  | $ | 2.21 |  |  | $ | 6.24 |  |  | $ | 4.52 |
Adjusted EBITDA (in thousands) | $ | 223,231 |  |  | $ | 184,412 |  |  | $ | 460,986 |  |  | $ | 370,784 |

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document) in the second quarter were significantly greater than prior year due to higher fuel margin and inside gross profit, as well as operating 38 more stores than this time last year.
Fuel

| Three Months Ended October 31, |  | Six Months Ended October 31,
| 2020 |  | 2019 |  | 2020 |  | 2019
Fuel gallons sold (in thousands) | 577,581 |  |  | 614,071 |  |  | 1,127,089 |  |  | 1,233,155 |
Same-store gallons sold decrease | (8.6) | % |  | (1.8) | % |  | (11.7) | % |  | (2.0) | %
Fuel gross profit (in thousands) | $ | 204,154 |  |  | $ | 140,798 |  |  | $ | 414,184 |  |  | $ | 291,787 |
Fuel margin (cents per gallon, excluding credit card fees) | 35.3 | ¢ |  | 22.9 | ¢ |  | 36.7 | ¢ |  | 23.7 | ¢

Same-store gallons sold were adversely impacted by lower guest traffic due to the COVID-19 pandemic, though volumes improved from first quarter. Fuel gross profit benefited from a higher fuel margin driven in part by the Company's centralized retail pricing capability and procurement initiatives. The Company sold $3.8 million in renewable fuel credits in the second quarter, comparable to the prior year.

Inside

| Three Months Ended October 31, | Six Months Ended October 31,
| 2020 |  | 2019 | 2020 |  | 2019
Inside sales (in thousands) | $ | 1,007,048 |  |  | $ | 958,408 |  | $ | 2,009,675 |  |  | $ | 1,942,203 |
Inside same-store sales increase | 3.5 | % |  | 2.8 | % | 1.5 | % |  | 2.7 | %
Grocery and other merchandise same-store sales increase | 6.6 | % |  | 3.2 | % | 5.0 | % |  | 3.1 | %
Prepared food and fountain same-store sales (decrease) increase | (3.6) | % |  | 1.9 | % | (6.6) | % |  | 1.8 | %
Inside gross profit (in thousands) | $ | 412,653 |  |  | $ | 401,586 |  | $ | 809,900 |  |  | $ | 801,051 |
Inside margin | 41.0 | % |  | 41.9 | % | 40.3 | % |  | 41.2 | %
Grocery and other merchandise margin | 33.3 | % |  | 33.3 | % | 32.7 | % |  | 32.3 | %
Prepared food and fountain margin | 60.1 | % |  | 60.9 | % | 59.9 | % |  | 61.6 | %

Inside same-store sales were driven by strong performance in alcohol, packaged beverage and tobacco, along with continued strength in whole pizza pie sales. This was offset by pressure in the dispensed beverage and bakery categories, though these categories experienced improvements in volume compared to first quarter. Inside sales margin was adversely impacted by the product mix shift from the sales performance noted, but improved sequentially versus first quarter.
Operating Expenses

| Three Months Ended October 31, | Six Months Ended October 31,
| 2020 |  | 2019 | 2020 |  | 2019
Operating expenses (in thousands) | $ | 410,348 |  |  | $ | 373,383 |  | $ | 796,436 |  |  | $ | 753,224 |
Credit card fees (in thousands) | $ | 38,529 |  |  | $ | 38,705 |  | $ | 74,020 |  |  | $ | 79,087 |
Same-store operating expense excluding credit card fees increase (decrease) | 5.4 | % |  | 3.4 | % | (0.1) | % |  | 3.0 | %

Operating expenses for the quarter were up primarily due to operating 38 more stores than this time last year, as well as incurring $5 million in COVID-related expenses and over $9 million in incremental short and long-term incentive compensation costs due to the strong performance of the Company. Store operating hours were nearly in-line with pre-COVID levels at quarter end.
Expansion

| Store Count
Stores at 4/30/2020 | 2,207
New store construction | 14
Prior acquisitions opened | 1
Closed | (3)
Stores at 10/31/2020 | 2,219

Casey’s is on track to close on the previously disclosed 94-store Bucky’s acquisition by the end of the calendar year. The acquisition is a strong strategic fit and is expected to be accretive to earnings in fiscal 2022. In addition, the Company expects to complete the construction of approximately 40 new stores this fiscal year.
Liquidity
At October 31, the Company had approximately $730 million in available liquidity, consisting of approximately $405 million in cash and cash equivalents on hand and $325 million in borrowing capacity on existing lines of credit. The Company intends to finance the Bucky’s acquisition with existing cash on hand, a new bank term loan with a 5-year maturity, and a temporary draw on its line of credit.
Share Repurchase
The Company has $300 million remaining under its existing share repurchase program. There were no repurchases made against that authorization in the second quarter.
Dividend
At its December meeting, the Board of Directors voted to increase the quarterly dividend 6% to $0.34 per share. The dividend is payable February 15, 2021 to shareholders of record on February 1, 2021.

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, |  |
| 2020 |  | 2019 | 2020 |  | 2019 |  |  |  |
Total revenue | $ | 2,215,905 |  |  | $ | 2,487,586 |  | $ | 4,320,926 |  |  | $ | 5,114,215 |  |  |  |  |
Cost of goods sold (exclusive of depreciation and amortization, shown separately below) | 1,584,145 |  |  | 1,930,521 |  | 3,065,663 |  |  | 3,991,464 |  |  |  |  |
Operating expenses | 410,348 |  |  | 373,383 |  | 796,436 |  |  | 753,224 |  |  |  |  |
Depreciation and amortization | 64,294 |  |  | 62,888 |  | 130,114 |  |  | 122,696 |  |  |  |  |
Interest, net | 10,634 |  |  | 12,683 |  | 24,041 |  |  | 26,404 |  |  |  |  |
Income before income taxes | 146,484 |  |  | 108,111 |  | 304,672 |  |  | 220,427 |  |  |  |  |
Federal and state income taxes | 34,501 |  |  | 26,130 |  | 72,097 |  |  | 52,631 |  |  |  |  |
Net income | $ | 111,983 |  |  | $ | 81,981 |  | $ | 232,575 |  |  | $ | 167,796 |  |  |  |  |
Net income per common share |  |  |  |  |  |  |  |  |  |
Basic | $ | 3.02 |  |  | $ | 2.22 |  | $ | 6.29 |  |  | $ | 4.55 |  |  |  |  |
Diluted | $ | 3.00 |  |  | $ | 2.21 |  | $ | 6.24 |  |  | $ | 4.52 |  |  |  |  |
Basic weighted average shares | 37,030,921 |  |  | 36,916,937 |  | 37,002,901 |  |  | 36,891,324 |  |  |  |  |
Plus effect of stock compensation | 245,962 |  |  | 219,248 |  | 245,749 |  |  | 218,189 |  |  |  |  |
Diluted weighted average shares | 37,276,883 |  |  | 37,136,185 |  | 37,248,650 |  |  | 37,109,513 |  |  |  |  |

Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

| October 31, 2020 |  | April 30, 2020
Assets |  |  |
Current assets |  |  |
Cash and cash equivalents | $ | 404,685 |  |  | $ | 78,275 |
Receivables | 56,109 |  |  | 48,500 |
Inventories | 249,842 |  |  | 236,007 |
Prepaid expenses | 18,182 |  |  | 9,801 |
Income taxes receivable | — |  |  | 14,667 |
Total current assets | 728,818 |  |  | 387,250 |
Other assets, net of amortization | 72,198 |  |  | 71,766 |
Goodwill | 161,075 |  |  | 161,075 |
Property and equipment, net of accumulated depreciation of $2,104,012 at October 31, 2020 and $2,037,708 at April 30, 2020 | 3,361,577 |  |  | 3,323,801 |
Total assets | $ | 4,323,668 |  |  | $ | 3,943,892 |
Liabilities and Shareholders’ Equity |  |  |
Current liabilities |  |  |
Lines of credit | $ | — |  |  | $ | 120,000 |
Current maturities of long-term debt and finance lease obligations | 2,297 |  |  | 570,280 |
Accounts payable | 323,662 |  |  | 184,800 |
Accrued expenses | 229,311 |  |  | 188,348 |
Income taxes payable | 6,739 |  |  | — |
Total current liabilities | 562,009 |  |  | 1,063,428 |
Long-term debt and finance lease obligations, net of current maturities | 1,361,925 |  |  | 714,502 |
Deferred income taxes | 451,205 |  |  | 435,598 |
Deferred compensation | 14,365 |  |  | 13,604 |
Insurance accruals, net of current portion | 20,924 |  |  | 22,862 |
Other long-term liabilities | 53,389 |  |  | 50,693 |
Total liabilities | 2,463,817 |  |  | 2,300,687 |
Total shareholders’ equity | 1,859,851 |  |  | 1,643,205 |
Total liabilities and shareholders’ equity | $ | 4,323,668 |  |  | $ | 3,943,892 |

Casey’s General Stores, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

| Six months ended October 31,
| 2020 |  | 2019
Cash flows from operating activities: |  |  |
Net income | $ | 232,575 |  |  | $ | 167,796 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 130,114 |  |  | 122,696 |
Share-based compensation | 14,492 |  |  | 9,922 |
Loss on disposal of assets and impairment charges | 2,159 |  |  | 1,257 |
Deferred income taxes | 15,607 |  |  | 31,483 |
Changes in assets and liabilities: |  |  |
Receivables | (7,609) |  |  | (6,919) |
Inventories | (13,835) |  |  | 1,912 |
Prepaid expenses | (8,381) |  |  | (6,290) |
Accounts payable | 125,719 |  |  | (9,577) |
Accrued expenses | 39,177 |  |  | (8,706) |
Income taxes | 22,924 |  |  | 9,475 |
Other, net | (985) |  |  | (1,640) |
Net cash provided by operating activities | 551,957 |  |  | 311,409 |
Cash flows from investing activities: |  |  |
Purchase of property and equipment | (158,815) |  |  | (242,173) |
Payments for acquisition of businesses, net of cash acquired | — |  |  | (6,191) |
Proceeds from sales of property and equipment | 2,667 |  |  | 2,940 |
Net cash used in investing activities | (156,148) |  |  | (245,424) |
Cash flows from financing activities: |  |  |
Proceeds from long-term debt | 650,000 |  |  | — |
Repayments of long-term debt | (570,738) |  |  | (8,682) |
Net payments of short-term debt | (120,000) |  |  | (50,000) |
Proceeds from exercise of stock options | 1,253 |  |  | 2,307 |
Proceeds from capital grant | 1,594 |  |  | — |
Payments of cash dividends | (23,591) |  |  | (22,405) |
Tax withholdings on employee share-based awards | (7,917) |  |  | (6,525) |
Net cash used in financing activities | (69,399) |  |  | (85,305) |

Net increase (decrease) in cash and cash equivalents | 326,410 |  |  | (19,320) |
Cash and cash equivalents at beginning of the period | 78,275 |  |  | 63,296 |
Cash and cash equivalents at end of the period | $ | 404,685 |  |  | $ | 43,976 |

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

| Six months ended October 31,
| 2020 |  | 2019
Cash paid during the period for: |  |  |
Interest, net of amount capitalized | $ | 26,535 |  |  | $ | 26,997 |
Income taxes, net | 31,956 |  |  | 10,000 |
Noncash investing and financing activities: |  |  |
Purchased property and equipment in accounts payable | 18,471 |  |  | 17,067 |
Right-of-use assets obtained in exchange for new finance lease liabilities | — |  |  | 831 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,109 |  |  | — |
Non-cash additions from adoption of ASC 842 | — |  |  | 22,635 |

Summary by Category (Amounts in thousands)
Three months ended 10/31/2020 | Fuel |  | Grocery & Other Merchandise |  | Prepared Food & Fountain |  | Other |  | Total
Revenue | $ | 1,193,491 |  |  | $ | 718,226 |  |  | $ | 288,822 |  |  | $ | 15,366 |  |  | $ | 2,215,905 |
Gross profit | $ | 204,154 |  |  | $ | 238,992 |  |  | $ | 173,661 |  |  | $ | 14,953 |  |  | $ | 631,760 |
| 17.1 | % |  | 33.3 | % |  | 60.1 | % |  | 97.3 | % |  | 28.5 | %
Fuel gallons sold | 577,581 |  |  |  |  |  |  |  |  |
Three months ended 10/31/2019 |  |  |  |  |  |  |  |  |
Revenue | $ | 1,514,474 |  |  | $ | 660,562 |  |  | $ | 297,846 |  |  | $ | 14,704 |  |  | $ | 2,487,586 |
Gross profit | $ | 140,798 |  |  | $ | 220,134 |  |  | $ | 181,452 |  |  | $ | 14,681 |  |  | $ | 557,065 |
| 9.3 | % |  | 33.3 | % |  | 60.9 | % |  | 99.8 | % |  | 22.4 | %
Fuel gallons sold | 614,071 |  |  |  |  |  |  |  |  |

Summary by Category (Amounts in thousands)
Six months ended 10/31/2020 | Fuel |  | Grocery & Other Merchandise |  | Prepared Food & Fountain |  | Other |  | Total
Revenue | $ | 2,279,472 |  |  | $ | 1,450,087 |  |  | $ | 559,588 |  |  | $ | 31,779 |  |  | $ | 4,320,926 |
Gross profit | $ | 414,184 |  |  | $ | 474,591 |  |  | $ | 335,309 |  |  | $ | 31,179 |  |  | $ | 1,255,263 |
| 18.2 | % |  | 32.7 | % |  | 59.9 | % |  | 98.1 | % |  | 29.1 | %
Fuel gallons sold | 1,127,089 |  |  |  |  |  |  |  |  |
Six months ended 10/31/2019 |  |  |  |  |  |  |  |  |
Revenue | $ | 3,142,042 |  |  | $ | 1,348,480 |  |  | $ | 593,723 |  |  | $ | 29,970 |  |  | $ | 5,114,215 |
Gross profit | $ | 291,787 |  |  | $ | 435,587 |  |  | $ | 365,464 |  |  | $ | 29,913 |  |  | $ | 1,122,751 |
| 9.3 | % |  | 32.3 | % |  | 61.6 | % |  | 99.8 | % |  | 22.0 | %
Fuel gallons sold | 1,233,155 |  |  |  |  |  |  |  |  |

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
F2021 | (14.6) | % |  | (8.6) | % |  | — |  |  | — |  |  | — |  | F2021 | 38.2 | ¢ |  | 35.3 | ¢ |  | — |  |  | — |  |  | — |
F2020 | (2.0) |  |  | (1.8) |  |  | (2.0) |  |  | (14.7) |  |  | (5.1) | % | F2020 | 24.4 |  |  | 22.9 |  |  | 21.7 |  |  | 40.8 |  |  | 26.8 | ¢
F2019 | 0.5 |  |  | (1.1) |  |  | (3.4) |  |  | (2.8) |  |  | (1.7) |  | F2019 | 20.5 |  |  | 20.0 |  |  | 22.1 |  |  | 18.6 |  |  | 20.3 |

Grocery & Other Merchandise |  | Grocery & Other Merchandise
Same-store Sales | Margin
| Q1 |  | Q2 |  | Q3 |  | Q4 |  | Fiscal Year |  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | Fiscal Year
F2021 | 3.6 | % |  | 6.6 | % |  | — |  |  | — |  |  | — |  | F2021 | 32.2 | % |  | 33.3 | % |  | — |  |  | — |  |  | — |
F2020 | 3.2 |  |  | 3.2 |  |  | 3.5 |  |  | (2.0) |  |  | 1.9 | % | F2020 | 31.3 |  |  | 33.3 |  |  | 32.9 |  |  | 30.4 |  |  | 32.0 | %
F2019 | 3.2 |  |  | 2.7 |  |  | 3.4 |  |  | 5.7 |  |  | 3.6 |  | F2019 | 32.4 |  |  | 32.4 |  |  | 31.9 |  |  | 31.5 |  |  | 32.1 |

Prepared Food & Fountain |  | Prepared Food & Fountain
Same-store Sales | Margin
| Q1 |  | Q2 |  | Q3 |  | Q4 |  | Fiscal Year |  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | Fiscal Year
F2021 | (9.8) | % |  | (3.6) | % |  | — |  |  | — |  |  | — |  | F2021 | 59.7 | % |  | 60.1 | % |  | — |  |  | — |  |  | — |
F2020 | 1.6 |  |  | 1.9 |  |  | 2.8 |  |  | (13.5) |  |  | (1.5) | % | F2020 | 62.2 |  |  | 60.9 |  |  | 60.2 |  |  | 60.0 |  |  | 60.9 | %
F2019 | 1.7 |  |  | 2.2 |  |  | 1.5 |  |  | 2.0 |  |  | 1.9 |  | F2019 | 62.0 |  |  | 62.4 |  |  | 62.3 |  |  | 62.2 |  |  | 62.2 |

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 management for internal purposes including our capital budgeting process, evaluating acquisition targets, and assessing performance.
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, 2020 and 2019:

(In thousands) | Three Months Ended October 31, | Six Months Ended October 31, |  |
| 2020 |  | 2019 | 2020 |  | 2019 |  |  |  |
Net income | $ | 111,983 |  |  | $ | 81,981 |  | $ | 232,575 |  |  | $ | 167,796 |  |  |  |  |
Interest, net | 10,634 |  |  | 12,683 |  | 24,041 |  |  | 26,404 |  |  |  |  |
Depreciation and amortization | 64,294 |  |  | 62,888 |  | 130,114 |  |  | 122,696 |  |  |  |  |
Federal and state income taxes | 34,501 |  |  | 26,130 |  | 72,097 |  |  | 52,631 |  |  |  |  |
EBITDA | $ | 221,412 |  |  | $ | 183,682 |  | $ | 458,827 |  |  | $ | 369,527 |  |  |  |  |
Loss on disposal of assets and impairment charges | 1,819 |  |  | 730 |  | 2,159 |  |  | 1,257 |  |  |  |  |
Adjusted EBITDA | $ | 223,231 |  |  | $ | 184,412 |  | $ | 460,986 |  |  | $ | 370,784 |  |  |  |  |

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 Other Merchandise and Prepared Food and Fountain
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 the acquisition, 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, and the potential effect of COVID-19. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward-looking statements, including but not limited to integration of the acquisition, executing our strategic plan, the impact and duration of COVID-19 and related governmental actions, 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 8, 2020. 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) 965-6587 | Katie Petru (515) 446-6772