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Casey's Announces Third Quarter Results

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 nine months ended January 31, 2024.

Third Quarter Key Highlights

  • Diluted EPS of $2.33, down 13% from the same period a year ago. Net income was $87 million, down 13%, and EBITDA1 was $218 million, down 2%, from the same period a year ago. In the prior year, net income, EBITDA and diluted EPS benefited from a one-time operating expense reduction of approximately $15 million, or $0.31 a share, from the resolution of a legal matter.
  • Inside same-store sales increased 4.1% compared to prior year, and 9.9% on a two-year stack basis, with an inside margin of 41.3%. Total inside gross profit increased 11.3% to $501.5 million compared to the prior year.
  • Same-store fuel gallons were down 0.4% compared to prior year with a fuel margin of 37.3 cents per gallon. Total fuel gross profit decreased 2.0% to $257.2 million compared to the prior year.
  • Same-store operating expenses excluding credit card fees were up 2.5%, favorably impacted by a 1% reduction in same-store labor hours.

"Casey's delivered another solid quarter highlighted by inside 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 hot sandwiches performing exceptionally well. Our fuel team navigated a rising cost environment and delivered nearly flat gallon volume and a 37.3 cents per gallon fuel margin. The operations team performed exceptionally well this quarter integrating multiple acquisitions, reducing same-store labor hours while growing sales and driving positive guest satisfaction scores."

 

Earnings

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Net income (in thousands)

$

86,933

 

$

100,112

 

$

414,952

 

$

390,599

Diluted earnings per share

$

2.33

 

$

2.67

 

$

11.09

 

$

10.42

EBITDA (in thousands)

$

217,615

 

$

221,727

 

$

840,372

 

$

786,441

 

For the quarter, net income, diluted EPS, and EBITDA were down compared to the same period a year ago primarily due to a strong fuel margin comparison in the prior year, lapping the one-time operating expense benefit noted above, and higher operating expenses due to operating 167 additional stores. This was partially offset by higher profitability inside the store.

__________________________

1 EBITDA is reconciled to net income below.

 

Inside

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Inside sales (in thousands)

$

1,214,959

 

 

$

1,109,223

 

 

$

3,931,619

 

 

$

3,644,277

 

Inside same-store sales

 

4.1

%

 

 

5.6

%

 

 

4.1

%

 

 

6.6

%

Grocery and general merchandise same-store sales

 

2.8

%

 

 

5.8

%

 

 

3.3

%

 

 

6.0

%

Prepared food and dispensed beverage same-store sales

 

7.5

%

 

 

5.0

%

 

 

6.2

%

 

 

7.9

%

Inside gross profit (in thousands)

$

501,511

 

 

$

450,572

 

 

$

1,611,209

 

 

$

1,459,307

 

Inside margin

 

41.3

%

 

 

40.6

%

 

 

41.0

%

 

 

40.0

%

Grocery and general merchandise margin

 

33.9

%

 

 

34.0

%

 

 

34.0

%

 

 

33.7

%

Prepared food and dispensed beverage margin

 

59.6

%

 

 

57.3

%

 

 

58.9

%

 

 

56.5

%

 

Total inside sales were up 9.5% for the quarter driven by strong performance in the prepared food and dispensed beverage category, including whole pizza pies, hot sandwiches, and dispensed beverages as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise category. Inside margin was up 70 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 modest retail price adjustments.

 

Fuel2

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Fuel gallons sold (in thousands)

 

689,251

 

 

 

644,940

 

 

 

2,133,680

 

 

 

2,036,450

 

Same-store gallons sold

 

(0.4

)%

 

 

(0.5

)%

 

 

%

 

 

(0.9

)%

Fuel gross profit (in thousands)

$

257,246

 

 

$

262,573

 

 

$

863,059

 

 

$

855,167

 

Fuel margin (cents per gallon, excluding credit card fees)

37.3 ¢

 

40.7 ¢

 

40.4 ¢

 

42.0 ¢

 

For the quarter, total fuel gallons sold increased 6.9% compared to the prior year primarily due to the store count increase, while same-store gallons were nearly flat versus the prior year. The Company’s total fuel gross profit was down 2.0% versus the prior year. The Company sold $3.4 million in renewable fuel credits (RINs) in the third quarter, an increase of $0.5 million from the same quarter in the prior year.

 

Operating Expenses

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Operating expenses (in thousands)

$

568,908

 

 

$

515,735

 

 

$

1,709,466

 

 

$

1,598,213

 

Credit card fees (in thousands)

$

51,977

 

 

$

54,032

 

 

$

175,879

 

 

$

181,727

 

Same-store operating expenses excluding credit card fees

 

2.5

%

 

 

4.6

%

 

 

2.5

%

 

 

2.8

%

 

Operating expenses increased approximately 10% during the third quarter. Approximately 3% of the increase is due to lapping a $15 million one-time benefit to operating expenses last year from the resolution of a legal matter. Operating 167 more stores than prior year accounted for approximately 6% of the increase. Total same-store employee expense contributed to approximately 1% of the increase, as the increases in labor rates were partially offset by a reduction in same-store labor hours.

_____________________________

2 Fuel category does not include wholesale fuel activity, which is included in Other.

 

Expansion

 

Store Count

April 30, 2023

2,521

New store construction

23

Acquisitions

105

Acquisitions not opened

(1)

Prior acquisitions opened

6

Closed

(15)

January 31, 2024

2,639

 

Liquidity

At January 31, 2024, the Company had approximately $1.1 billion in available liquidity, consisting of approximately $178 million in cash and cash equivalents on hand and approximately $899 million in available borrowing capacity on existing lines of credit.

Share Repurchase

During the third quarter, the Company repurchased approximately $30 million of shares. The Company has approximately $310 million remaining under its existing share repurchase authorization.

Dividend

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

Fiscal 2024 Outlook

The Company is reaffirming its annual outlook. Same-store inside sales is expected to increase 3.5% to 5%. 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%. Total operating expenses are 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. Fiscal 2024 EBITDA growth is expected to be in-line with the long-term strategic plan's goal of 8% to 10%. The Company expects to add at least 150 stores in fiscal 2024. Net interest expense is expected to be approximately $53 million. Depreciation and amortization is expected to be approximately $350 million for the year and the purchase of property and equipment is expected to be between $500 to $550 million. The tax rate is expected to be approximately 23% to 25% for the year. The Company expects to repurchase at least $100 million in shares throughout the fiscal year.

 

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Total revenue

$

3,329,247

 

$

3,332,555

 

$

11,262,898

 

$

11,765,774

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

 

2,542,724

 

 

2,595,093

 

 

8,713,060

 

 

9,381,120

Operating expenses

 

568,908

 

 

515,735

 

 

1,709,466

 

 

1,598,213

Depreciation and amortization

 

88,950

 

 

78,088

 

 

257,453

 

 

232,500

Interest, net

 

14,146

 

 

11,697

 

 

38,947

 

 

39,015

Income before income taxes

 

114,519

 

 

131,942

 

 

543,972

 

 

514,926

Federal and state income taxes

 

27,586

 

 

31,830

 

 

129,020

 

 

124,327

Net income

$

86,933

 

$

100,112

 

$

414,952

 

$

390,599

Net income per common share

 

 

 

 

 

 

 

Basic

$

2.34

 

$

2.69

 

$

11.15

 

$

10.48

Diluted

$

2.33

 

$

2.67

 

$

11.09

 

$

10.42

Basic weighted average shares

 

37,100,143

 

 

37,281,103

 

 

37,210,007

 

 

37,261,049

Plus effect of stock compensation

 

235,940

 

 

283,448

 

 

199,531

 

 

240,459

Diluted weighted average shares

 

37,336,083

 

 

37,564,551

 

 

37,409,538

 

 

37,501,508

 

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

January 31, 2024

 

April 30, 2023

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

177,881

 

$

378,869

Receivables

 

136,691

 

 

120,547

Inventories

 

414,721

 

 

376,085

Prepaid expenses

 

29,946

 

 

22,107

Income taxes receivable

 

21,765

 

 

23,347

Total current assets

 

781,004

 

 

920,955

Other assets, net of amortization

 

197,780

 

 

192,153

Goodwill

 

647,125

 

 

615,342

Property and equipment, net of accumulated depreciation of $2,836,219 at January 31, 2024 and $2,620,149 at April 30, 2023

 

4,581,105

 

 

4,214,820

Total assets

$

6,207,014

 

$

5,943,270

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt and finance lease obligations

$

53,250

 

$

52,861

Accounts payable

 

521,948

 

 

560,546

Accrued expenses

 

305,708

 

 

313,718

Total current liabilities

 

880,906

 

 

927,125

Long-term debt and finance lease obligations, net of current maturities

 

1,583,613

 

 

1,620,513

Deferred income taxes

 

591,811

 

 

543,598

Insurance accruals, net of current portion

 

33,114

 

 

32,312

Other long-term liabilities

 

170,109

 

 

159,056

Total liabilities

 

3,259,553

 

 

3,282,604

Total shareholders’ equity

 

2,947,461

 

 

2,660,666

Total liabilities and shareholders’ equity

$

6,207,014

 

$

5,943,270

 

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

 

Nine months ended January 31,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income

$

414,952

 

 

$

390,599

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

257,453

 

 

 

232,500

 

Amortization of debt issuance costs

 

833

 

 

 

1,036

 

Change in excess replacement cost over LIFO inventory valuation

 

7,786

 

 

 

20,329

 

Share-based compensation

 

29,349

 

 

 

34,741

 

Loss on disposal of assets and impairment charges

 

892

 

 

 

5,977

 

Deferred income taxes

 

48,213

 

 

 

24,516

 

Changes in assets and liabilities:

 

 

 

Receivables

 

(15,146

)

 

 

(19,300

)

Inventories

 

(33,762

)

 

 

(10,433

)

Prepaid expenses

 

(7,839

)

 

 

(6,571

)

Accounts payable

 

(93,480

)

 

 

(100,714

)

Accrued expenses

 

(10,905

)

 

 

20,869

 

Income taxes

 

2,335

 

 

 

39,548

 

Other, net

 

3,919

 

 

 

3,496

 

Net cash provided by operating activities

 

604,600

 

 

 

636,593

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(325,726

)

 

 

(301,298

)

Payments for acquisition of businesses, net of cash acquired

 

(296,809

)

 

 

(13,202

)

Proceeds from sales of assets

 

20,351

 

 

 

13,551

 

Net cash used in investing activities

 

(602,184

)

 

 

(300,949

)

Cash flows from financing activities:

 

 

 

Payments of long-term debt and finance lease obligations

 

(48,364

)

 

 

(23,563

)

Payments of cash dividends

 

(46,975

)

 

 

(41,456

)

Repurchase of common stock

 

(89,768

)

 

 

 

Tax withholdings on employee share-based awards

 

(18,297

)

 

 

(16,304

)

Net cash used in financing activities

 

(203,404

)

 

 

(81,323

)

Net (decrease) increase in cash and cash equivalents

 

(200,988

)

 

 

254,321

 

Cash and cash equivalents at beginning of the period

 

378,869

 

 

 

158,878

 

Cash and cash equivalents at end of the period

$

177,881

 

 

$

413,199

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

 

Nine months ended January 31,

 

2024

 

2023

Cash paid during the period for:

 

 

 

Interest, net of amount capitalized

$

43,316

 

$

37,765

Income taxes, net

 

72,037

 

 

56,289

Noncash investing and financing activities:

 

 

 

Purchased property and equipment in accounts payable

 

82,785

 

 

76,840

Right-of-use assets obtained in exchange for new finance lease liabilities

 

14,035

 

 

6,909

Right-of-use assets obtained in exchange for new operating lease liabilities

 

12,613

 

 

13,485

 

Summary by Category (Amounts in thousands)

Three months ended January 31, 2024

Prepared Food

& Dispensed

Beverage

 

Grocery & General

Merchandise

 

Fuel

 

Other

 

Total

Revenue

$

349,411

 

 

$

865,548

 

 

$

2,051,674

 

 

$

62,614

 

 

$

3,329,247

 

Gross profit

$

208,327

 

 

$

293,184

 

 

$

257,246

 

 

$

27,766

 

 

$

786,523

 

 

 

59.6

%

 

 

33.9

%

 

 

12.5

%

 

 

44.3

%

 

 

23.6

%

Fuel gallons sold

 

 

 

 

 

689,251

 

 

 

 

 

Three months ended January 31, 2023

 

 

 

 

 

 

 

 

 

Revenue

$

313,524

 

 

$

795,699

 

 

$

2,157,233

 

 

$

66,099

 

 

$

3,332,555

 

Gross profit

$

179,647

 

 

$

270,925

 

 

$

262,573

 

 

$

24,317

 

 

$

737,462

 

 

 

57.3

%

 

 

34.0

%

 

 

12.2

%

 

 

36.8

%

 

 

22.1

%

Fuel gallons sold

 

 

 

 

 

644,940

 

 

 

 

 

Summary by Category (Amounts in thousands)

Nine months ended January 31, 2024

Prepared Food

& Dispensed

Beverage

 

Grocery & General

Merchandise

 

Fuel

 

Other

 

Total

Revenue

$

1,104,705

 

 

$

2,826,914

 

 

$

7,125,485

 

 

$

205,794

 

 

$

11,262,898

 

Gross profit

$

650,852

 

 

$

960,357

 

 

$

863,059

 

 

$

75,570

 

 

$

2,549,838

 

 

 

58.9

%

 

 

34.0

%

 

 

12.1

%

 

 

36.7

%

 

 

22.6

%

Fuel gallons sold

 

 

 

 

 

2,133,680

 

 

 

 

 

Nine months ended January 31, 2023

 

 

 

 

 

 

 

 

 

Revenue

$

1,008,338

 

 

$

2,635,939

 

 

$

7,889,495

 

 

$

232,002

 

 

$

11,765,774

 

Gross profit

$

569,825

 

 

$

889,482

 

 

$

855,167

 

 

$

70,180

 

 

$

2,384,654

 

 

 

56.5

%

 

 

33.7

%

 

 

10.8

%

 

 

30.2

%

 

 

20.3

%

Fuel gallons sold

 

 

 

 

 

2,036,450

 

 

 

 

 

 

Prepared Food & Dispensed Beverage

 

Prepared Food & Dispensed Beverage

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2024

5.9

%

 

6.1

%

 

7.5

%

 

 

 

 

F2024

58.2

%

 

59.0

%

 

59.6

%

 

 

 

 

F2023

8.4

 

 

10.5

 

 

5.0

 

 

4.9

%

 

7.1

%

F2023

55.6

 

 

56.7

 

 

57.3

 

 

56.8

%

 

56.6

%

F2022

10.8

 

 

4.1

 

 

7.4

 

 

7.6

 

 

7.4

 

F2022

61.0

 

 

60.6

 

 

58.0

 

 

56.9

 

 

59.2

 

 

Grocery & General Merchandise

 

Grocery & General Merchandise

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2024

5.2

%

 

1.7

%

 

2.8

%

 

 

 

 

F2024

34.1

%

 

34.0

%

 

33.9

%

 

 

 

 

F2023

5.5

 

 

6.9

 

 

5.8

 

 

7.1

%

 

6.3

%

F2023

33.9

 

 

33.3

 

 

34.0

 

 

33.0

%

 

33.6

%

F2022

7.0

 

 

6.8

 

 

7.7

 

 

4.3

 

 

6.3

 

F2022

33.0

 

 

33.3

 

 

32.0

 

 

32.5

 

 

32.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

F2024

0.4

%

 

%

 

(0.4

)%

 

 

 

 

F2024

41.6 ¢

 

42.3 ¢

 

37.3 ¢

 

 

 

 

F2023

(2.3

)

 

0.3

 

 

(0.5

)

 

%

 

(0.8

)%

F2023

44.7

 

40.5

 

40.7

 

34.6 ¢

 

40.2 ¢

F2022

9.0

 

 

2.5

 

 

5.7

 

 

1.5

 

 

4.4

 

F2022

35.1

 

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 nine months ended January 31, 2024 and 2023:

 

(in thousands)

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2024

 

2023

 

2024

 

2023

Net income

$

86,933

 

$

100,112

 

$

414,952

 

$

390,599

Interest, net

 

14,146

 

 

11,697

 

 

38,947

 

 

39,015

Federal and state income taxes

 

27,586

 

 

31,830

 

 

129,020

 

 

124,327

Depreciation and amortization

 

88,950

 

 

78,088

 

 

257,453

 

 

232,500

EBITDA

 

217,615

 

 

221,727

 

 

840,372

 

 

786,441

Loss on disposal of assets and impairment charges

 

1,124

 

 

1,186

 

 

892

 

 

5,977

Adjusted EBITDA

$

218,739

 

$

222,913

 

$

841,264

 

$

792,418

 

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 March 12, 2024. The call will be broadcast live over the Internet at 7:30 a.m. CDT. 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.

Contacts

Investor Relations Contact:

Brian Johnson, (515) 446-6587



Media Relations Contact:

Katie Petru, (515) 446-6772

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