Casey’s Completes Strong 2019 with 33% Growth in 4th Quarter Diluted Earnings Per Share

June 10, 2019

ANKENY, Iowa--(BUSINESS WIRE)-- Casey’s General Stores, Inc. ("Casey's", or the "Company") (Nasdaq symbol CASY) today reported diluted earnings per share of $0.68 for the fourth quarter of its fiscal year ended April 30, 2019, compared to $0.51 for the same period a year ago. Diluted earnings per share was $5.51 for the year, compared to $3.81 last year, or $8.34 when including the one-time benefit of the adoption of the Tax Cuts and Jobs Act. Income before income taxes grew nearly 58% and 23% for the fourth quarter and fiscal year, respectively. “The combination of gross profit dollar margin expansion, a focus on controlling operating expense growth, and opening more stores were the primary drivers of that growth,” stated Terry Handley, President and Chief Executive Officer. “We are pleased with our fiscal 2019 results. The entire team demonstrated a focused effort to drive the business forward while working diligently to build out new capabilities that will support future earnings growth, including completing several value creation plan milestones in the fourth quarter.”

Value Creation Plan Update - The Company has completed or made progress on the following value creation plan activities:

  • Successfully launched the new Caseys.com e-commerce website
  • Launched fuel price optimization platform in all stores
  • At fiscal year end, the new fleet card program has over 2,000 active cards and 500 new accounts
  • Completed inside price optimization store test with planned rollout in fiscal 2020
  • Piloting new in-store order management system with expected launch in first half of fiscal 2020
  • Expecting launch of enhanced mobile app in first quarter of fiscal 2020

Fuel - For the quarter, the average margin was 18.6 cents per gallon, compared to 16.3 cents per gallon for the same quarter a year ago. Same-store gallons sold in the quarter decreased 2.8%. “The Company experienced a challenging wholesale cost environment throughout the quarter,” stated Handley. “However, our balanced approach to retail fuel pricing resulted in a considerable increase in gross profit when compared to the fourth quarter a year ago.” Total gross profit dollars for the quarter increased over 17% to $101.4 million, while total gallons sold for the quarter increased 2.6% to 546.0 million. For fiscal 2019, total gross profit dollars were up 14.6% to $466.1 million, while total gallons sold were up 4.4% to 2.3 billion. For the year, same-store gallons sold were down 1.7% with an average margin of 20.3 cents per gallon. “Moving forward, we remain confident the newly-implemented capabilities in retail fuel pricing and fuel procurement will further enhance fuel profitability,” added Handley.

Grocery and Other Merchandise - For the fourth quarter, same-store sales were up 5.7% with an average margin of 31.5%. Same-store sales for the fiscal year were up 3.6% with an average margin of 32.1%. “Refinements in product offerings and promotional strategies in higher margin items contributed to increased same-store sales growth and margin expansion comparatively for the fourth quarter and fiscal year,” said Handley. Total sales for the quarter were up nearly 10% to $562.7 million while total gross profit dollars increased 10.8% to $177.2 million. For the year, total sales were up 8.5% to $2.4 billion and gross profit dollars increased 9.6% to $759.8 million. “The successful inside price optimization store test and eminent rollout will provide our diverse store base dynamic pricing capabilities to meet today’s ever-changing competitive landscape, and will further support ongoing growth in gross profit dollars to the category,” said Handley.

Prepared Food and Fountain - For the fourth quarter, same-store sales were up 2.0% with an average margin of 62.2%. “Continued benefits from strategic price increases, favorable commodity costs and changes in promotional campaigns resulted in considerable margin expansion in the fourth quarter compared to the same time period a year ago,” said Handley. Total gross profit dollars for the quarter were up nearly 10% to $158.1 million while total sales increased 5.4% to $254.1 million. For fiscal 2019, total gross profit dollars rose 8.9% to $668.6 million, and total sales increased 6.8% to $1.1 billion. Same-store sales for fiscal 2019 were up 1.9% with an average margin of 62.2%. “The recent launch of the new Caseys.com e-commerce website marked a key milestone in our digital transformation journey,” said Handley. “We are confident these digital capabilities, combined with our new price optimization platform, will improve our competitive position and increase gross profit dollars to the category.”

Operating Expenses - For the fourth quarter, operating expenses were up 9.6% to $346.2 million. For the fiscal year, operating expenses increased 8.4% to $1.4 billion. “Both the quarter and full year increase in operating expenses was primarily due to operating more stores than the same time a year ago offset by a reduction in employee costs at same-stores,” said Handley. Fourth quarter operating expenses were also impacted by lapping the reduction in 24-hour and pizza delivery formats from prior year, along with increases in technology expenses and credit card fees. Same-store operating expenses excluding credit card fees were down 1.1% and 0.6% for the quarter and full year, respectively. “A focus on aligning labor with customer trends throughout the fiscal year contributed to the Company’s strong earnings growth,” added Handley. “Process improvements and new capabilities are under way across the business focused on driving efficiencies and enhancing future earnings growth.”

Expansion - The following table represents the roll forward of store growth through the fourth quarter of fiscal 2019:

   
Store Count
Stores at 4/30/18 2,073
New Store Construction 56
Acquisitions 24
Acquisitions not opened (2)
Prior Acquisitions opened 5
Closed (10)
Stores at 4/30/19 2,146
 

As of April 30, 2019, the Company had 8 acquisition stores under agreement to purchase and a new store pipeline of 81 sites, including 41 under construction.

Share Repurchase Program - The Company has $300 million remaining on its authorization from March 2018. There were no repurchases made against that authorization in the fourth quarter.

Fiscal 2020 Guidance - The corporate performance guidance for fiscal 2020 is as follows:

   

 

Same-store Sales

Average Margin
Fuel (Gallons and CPG) (.5%) - 1.0% 20.5 - 22.5
Grocery and Other Merchandise 2.5 - 4.0% 32.0 - 33.0%
Prepared Food and Fountain 3.0 - 6.0% 61.0 - 63.0%
 
Other Guidance
Operating Expenses (including expenses from value creation plan) 7.0 - 9.0%
Depreciation and Amortization 11.0 - 13.0%
New Store Construction 60 stores
Acquisitions 25 stores
 

Dividend - For the last 19 years, the Company has increased its annual dividend to shareholders. At its June meeting, the Board of Directors increased the quarterly dividend from $0.29 to $0.32 per share. The dividend is payable August 15, 2019 to shareholders of record on August 1, 2019.

   

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

 
Three Months Ended April 30, Twelve Months Ended April 30,
2019   2018 2019   2018
Total revenue $ 2,178,397 2,089,037 $ 9,352,910 8,391,124
Cost of goods sold (exclusive of depreciation and amortization, shown separately below) 1,726,027 1,683,922 7,398,186 6,621,731
Operating expenses 346,165 315,809 1,391,279 1,283,046
Depreciation and amortization 62,867 57,402 244,387 220,970
Interest, net   13,749   13,119     55,656   50,940  
Income before income taxes 29,589 18,785 263,402 214,437
Federal and state income taxes   4,377   (477 )   59,516   (103,466 )
Net income $ 25,212   19,262   $ 203,886   317,903  
Net income per common share
Basic $ 0.69   0.52   $ 5.55   8.41  
Diluted $ 0.68   0.51   $ 5.51   8.34  
Basic weighted average shares 36,752,152 37,298,281 36,709,940 37,778,304
Plus effect of stock compensation   268,779   353,010     265,447   353,795  
Diluted weighted average shares   37,020,931   37,651,291     36,975,387   38,132,099  
 
   

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

 
April 30, 2019 April 30, 2018
Assets
Current assets
Cash and cash equivalents $ 63,296 $ 53,679
Receivables 37,856 45,045
Inventories 273,040 241,668
Prepaid expenses 7,493 5,766
Income tax receivable   28,895     50,682  
Total current assets   410,580     396,840  
Other assets, net of amortization 52,947 29,909
Goodwill 157,223 140,258
Property and equipment, net of accumulated depreciation   3,110,626     2,902,920  
Total assets $ 3,731,376   $ 3,469,927  
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable to bank $ 75,000 $ 39,600
Current maturities of long-term debt 17,205 15,374
Accounts payable 335,240 321,419
Accrued expenses   163,487     131,457  
Total current liabilities   590,932     507,850  
Long-term debt, net of current maturities 1,283,275 1,291,725
Deferred income taxes 385,788 341,946
Deferred compensation 15,881 15,928
Insurance accruals, net of current portion 22,663 19,748
Other long-term liabilities   24,068     21,589  
Total liabilities   2,322,607     2,198,786  
Total shareholders’ equity   1,408,769     1,271,141  
Total liabilities and shareholders’ equity $ 3,731,376   $ 3,469,927  
 
 

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, including our ability to execute our value creation plan or to realize benefits therefrom. 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.

 
Summary by Category (Amounts in thousands)
Three months ended 4/30/2019   Fuel  

Grocery & Other
Merchandise

 

Prepared Food
& Fountain

  Other   Total
Revenue $ 1,345,866 $ 562,699 $ 254,086 $ 15,746 $ 2,178,397
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 101,417 $ 177,188 $ 158,057 $ 15,708 $ 452,370
Margin 7.5 % 31.5 % 62.2 % 99.8 % 20.8 %
Fuel gallons 546,006
Three months ended 4/30/2018
Revenue $ 1,321,417 $ 511,834 $ 241,163 $ 14,623 $ 2,089,037
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 86,640 $ 159,929 $ 143,949 $ 14,597 $ 405,115
Margin 6.6 % 31.2 % 59.7 % 99.8 % 19.4 %
Fuel gallons 532,196
 
Summary by Category (Amounts in thousands)
Twelve months ended 4/30/2019 Fuel

Grocery & Other
Merchandise

Prepared Food
& Fountain

Other Total
Revenue $ 5,848,770 $ 2,369,521 $ 1,074,294 $ 60,325 $ 9,352,910
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 466,107 $ 759,817 $ 668,598 $ 60,202 $ 1,954,724
Margin 8.0 % 32.1 % 62.2 % 99.8 % 20.9 %
Fuel gallons 2,296,030
Twelve months ended 4/30/2018
Revenue $ 5,145,988 $ 2,184,147 $ 1,005,621 $ 55,368 $ 8,391,124
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 406,811 $ 693,576 $ 613,736 $ 55,270 $ 1,769,393
Margin 7.9 % 31.8 % 61.0 % 99.8 % 21.1 %
Fuel gallons 2,198,600
 
   
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

F2019 0.5 % (1.1 )% (3.4 )% (2.8 )% (1.7 )% F2019

20.5

¢

20.0

¢

22.1

¢

18.6

¢

20.3

¢

F2018 1.7 1.9 3.8 2.0 2.3 F2018 19.3 19.7 18.6 16.3 18.5
F2017 3.1 3.7 2.6 (0.5 ) 2.1 F2017 19.5 18.6 17.9 17.2 18.4
 
Grocery & Other Merchandise Grocery & Other Merchandise
Same-store Sales Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2019 3.2 % 2.7 % 3.4 % 5.7 %

3.6

%

F2019 32.4 % 32.4 % 31.9 % 31.5 % 32.1 %
F2018 3.1 2.5 2.5 (0.4 ) 1.9 F2018 31.9 32.0 31.9 31.2 31.8
F2017 4.7 3.1 3.0 1.5 2.9 F2017 31.6 32.0 31.1 31.1 31.5
 
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2019 1.7 % 2.2 % 1.5 % 2.0 %

1.9

%

F2019 62.0 % 62.4 % 62.3 % 62.2 % 62.2 %
F2018 3.7 2.1 1.7 (1.3 ) 1.7 F2018 62.5 61.3 60.5 59.7 61.0
F2017 5.1 5.1 5.8 3.2 4.8 F2017 62.8 62.9 61.7 61.7 62.3
 

Corporate information is available at this website: https://www.caseys.com . Earnings will be reported during a conference call on June 11, 2019. The call will be broadcast live over the Internet at 9:30 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 Press Releases and Webcasts section of our website at https://investor.caseys.com/events-and-presentations/default.aspx for one year after the call.

Bill Walljasper
(515) 965-6505

Source: Casey’s General Stores, Inc.

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