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Press Release Details

Casey's Announces Third Quarter Results

March 8, 2022

Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq: CASY) a leading convenience store chain in the United States, today announced financial results for the three and nine months ended January 31, 2022.

Third Quarter Key Highlights

  • Diluted EPS of $1.71, up 64% from the same period a year ago.
  • Inside same-store sales increased 7.6% compared to prior year with a margin of 39.4%. Total inside gross profit increased 14.9% to $403.8 million compared to the prior year.
  • Fuel gallons increased 5.7% on a same-store basis compared to prior year with a fuel margin of 38.3 cents per gallon, up from 32.9 cents per gallon. Total fuel gross profit increased 39.6% to $237.9 million compared to the prior year.
  • The breakfast menu relaunch results exceeded initial expectations, with breakfast daypart same-store sales up 17% compared to the prior year.
  • Store count surpassed 2,400 units with the recently completed acquisition of 40 stores from Pilot Corporation.

“I am extremely proud of how the Casey’s team generated record third quarter earnings,” said Darren Rebelez, President and CEO. “Inside sales and fuel gallons sold were strong in the third quarter as our merchandising efforts inside the store gained momentum, driving improved guest traffic. Our fuel team continued to strike the appropriate balance between volume and margin during a volatile cost environment, driving a 39.6% increase in fuel gross profit. The results are impressive when taking into account macro conditions such as the Omicron wave, wage and merchandise inflation, and difficult weather. Underscoring our commitment to unit growth, we completed the acquisition of 40 stores from Pilot Corporation, which marks the third significant acquisition of this fiscal year. Overall the commitment to our strategy continues to deliver strong results and we look forward to continuing to drive long-term value for our shareholders.”

Earnings

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Net income (in thousands)

$

64,024

 

$

38,627

 

$

280,014

 

$

271,202

Diluted earnings per share

$

1.71

 

$

1.04

 

$

7.50

 

$

7.28

Adjusted EBITDA (in thousands)

$

174,336

 

$

127,382

 

$

634,534

 

$

588,368

Net income, diluted EPS, and Adjusted EBITDA (reconciled later in the document), were up compared to the same period a year ago as higher gross profit from inside the store and fuel (due to both strong same store volumes and new units) was partially offset by higher operating expenses due to operating 202 additional stores (an increase of 9% compared to a year ago), higher wage rates, as well as credit card fees due to the higher retail price of fuel.

Inside

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Inside sales (in thousands)

$

1,025,398

 

 

$

888,483

 

 

$

3,308,311

 

 

$

2,898,157

 

Inside same-store sales

 

7.6

%

 

 

2.1

%

 

 

7.1

%

 

 

1.6

%

Grocery and general merchandise same-store sales

 

7.7

%

 

 

5.4

%

 

 

7.1

%

 

 

5.1

%

Prepared food and dispensed beverage same-store sales

 

7.4

%

 

 

(5.0

) %

 

 

7.3

%

 

 

(6.1

) %

Inside gross profit (in thousands)

$

403,837

 

 

$

351,490

 

 

$

1,330,789

 

 

$

1,161,390

 

Inside margin

 

39.4

%

 

 

39.6

%

 

 

40.2

%

 

 

40.1

%

Grocery and general merchandise margin

 

32.0

%

 

 

30.7

%

 

 

32.8

%

 

 

32.1

%

Prepared food and dispensed beverage margin

 

58.0

%

 

 

60.6

%

 

 

59.9

%

 

 

60.1

%

Inside same-store sales were driven by strong performance in non-alcoholic beverages, grocery items such as salty snacks and candy, and prepared food items such as pizza slices and hot breakfast sandwiches. The morning daypart performance continues to improve due in part to the recent breakfast menu relaunch as well as an increase in guest traffic. Inside margin was down 20 basis points, primarily due to cost increases for ingredients and pizza toppings within the prepared food and dispensed beverage category partially offset by menu price increases.

Fuel 1

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Fuel gallons sold (in thousands)

 

621,770

 

 

 

518,408

 

 

 

1,958,061

 

 

 

1,645,497

 

Same-store gallons sold

 

5.7

%

 

 

(12.1

) %

 

 

5.5

%

 

 

(11.9

) %

Fuel gross profit (in thousands)

$

237,873

 

 

$

170,399

 

 

$

704,231

 

 

$

584,584

 

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

 

38.3

¢

 

 

32.9

¢

 

 

36.0

¢

 

 

35.5

¢

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

Same-store gallons sold were positively impacted by higher guest traffic. The Company’s total fuel gross profit was up 39.6% versus the prior third quarter, as margin increased to over 38 cents per gallon. Total gallons also increased 20% compared to the prior year, impacted favorably by high-volume acquisitions. The Company sold $10.2 million in renewable fuel credits (RINs) in the third quarter, an increase of $3.3 million from the same quarter in the prior year.

Operating Expenses

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Operating expenses (in thousands)

$

490,997

 

 

$

414,448

 

 

$

1,470,569

 

 

$

1,210,884

 

Credit card fees (in thousands)

$

47,860

 

 

$

34,365

 

 

$

149,375

 

 

$

108,385

 

Same-store operating expense excluding credit card fees

 

2.9

%

 

 

5.6

%

 

 

9.3

%

 

 

1.8

%

Operating expenses increased 18.5% during the third quarter. Approximately 9% of the increase is due to operating 202 more stores than prior year. Additionally, approximately 4% of the increase is due to same-store employee expenses, offset by a 2% reduction in store hours. Finally, approximately 2% of the change is due to an increase in same-store credit card fees from higher retail fuel prices and higher sales volume and 2% is due to incentive compensation.

Expansion

 

Store Count

Stores at 4/30/2021

2,243

New store construction

11

Acquisitions

191

Acquisitions not opened

(5)

Prior acquisitions opened

4

Closed

(13)

Stores at 1/31/2022

2,431

Liquidity

At January 31, 2022, the Company had approximately $662 million in available liquidity, consisting of approximately $187 million in cash and cash equivalents on hand and $475 million in undrawn borrowing capacity on existing lines of credit.

Share Repurchase

On and effective as of March 3, 2022, the Board of Directors authorized an extension and expansion of its existing $300 million share repurchase program to a total amount of up to $400 million. The number and timing of shares to be repurchased will depend on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements. The new repurchase authorization has no expiration date and may be suspended, amended or discontinued at any time. The Company did not make any repurchases during the quarter.

Dividend

At its March meeting, the Board of Directors voted to pay a quarterly dividend of $0.35 per share. The dividend is payable May 16, 2022 to shareholders of record on May 2, 2022.

Fiscal 2022 Outlook

The Company is reiterating its fiscal 2022 outlook, previously disclosed in the second quarter. The Company expects same-store fuel and inside sales to increase by mid-single digit percentages for the fiscal year. Total operating expenses for the year are expected to increase high-teen percentages. For the fourth quarter, operating expenses are expected to increase 11-13%. The Company expects to add approximately 225 units during fiscal 2022. Interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $310 million and the purchase of property and equipment is expected to be approximately $400 million. The tax rate is expected to be approximately 24.0% - 26.0% for the year.

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 January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Total revenue

$

3,048,717

 

$

2,008,028

 

$

9,493,652

 

$

6,328,954

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

 

2,384,222

 

 

1,467,847

 

 

7,387,680

 

 

4,533,510

Operating expenses

 

490,997

 

 

414,448

 

 

1,470,569

 

 

1,210,884

Depreciation and amortization

 

75,529

 

 

65,185

 

 

225,675

 

 

195,299

Interest, net

 

14,431

 

 

11,469

 

 

41,681

 

 

35,510

Income before income taxes

 

83,538

 

 

49,079

 

 

368,047

 

 

353,751

Federal and state income taxes

 

19,514

 

 

10,452

 

 

88,033

 

 

82,549

Net income

$

64,024

 

$

38,627

 

$

280,014

 

$

271,202

Net income per common share

 

 

 

 

 

 

 

Basic

$

1.72

 

$

1.04

 

$

7.54

 

$

7.33

Diluted

$

1.71

 

$

1.04

 

$

7.50

 

$

7.28

Basic weighted average shares

 

37,169,213

 

 

37,042,544

 

 

37,154,883

 

 

37,017,656

Plus effect of stock compensation

 

197,370

 

 

241,047

 

 

197,370

 

 

240,962

Diluted weighted average shares

 

37,366,583

 

 

37,283,591

 

 

37,352,253

 

 

37,258,618

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

January 31, 2022

 

April 30, 2021

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

186,921

 

$

336,545

Receivables

 

91,442

 

 

79,698

Inventories

 

351,377

 

 

286,598

Prepaid expenses

 

20,927

 

 

11,214

Income taxes receivable

 

10,113

 

 

9,578

Total current assets

 

660,780

 

 

723,633

Other assets, net of amortization

 

182,123

 

 

82,147

Goodwill

 

601,040

 

 

161,075

Property and equipment, net of accumulated depreciation of $2,367,588 at January 31, 2022 and $2,206,405 at April 30, 2021

 

3,958,000

 

 

3,493,459

Total assets

$

5,401,943

 

$

4,460,314

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt and finance lease obligations

$

91,695

 

$

2,354

Accounts payable

 

398,997

 

 

355,471

Accrued expenses

 

293,018

 

 

254,924

Total current liabilities

 

783,710

 

 

612,749

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

 

1,766,049

 

 

1,361,395

Deferred income taxes

 

494,877

 

 

439,721

Deferred compensation

 

14,069

 

 

15,094

Insurance accruals, net of current portion

 

26,195

 

 

26,239

Other long-term liabilities

 

131,437

 

 

72,437

Total liabilities

 

3,216,337

 

 

2,527,635

Total shareholders’ equity

 

2,185,606

 

 

1,932,679

Total liabilities and shareholders’ equity

$

5,401,943

 

$

4,460,314

Casey’s General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

 

 

Nine months ended January 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income

$

280,014

 

 

$

271,202

 

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

 

 

 

Depreciation and amortization

 

225,675

 

 

 

195,299

 

Amortization of debt issuance costs

 

1,112

 

 

 

1,258

 

Share-based compensation

 

29,382

 

 

 

22,009

 

(Gain) loss on disposal of assets and impairment charges

 

(869

)

 

 

3,808

 

Deferred income taxes

 

56,967

 

 

 

13,554

 

Changes in assets and liabilities:

 

 

 

Receivables

 

(10,006

)

 

 

(18,117

)

Inventories

 

(33,579

)

 

 

(35,238

)

Prepaid expenses

 

(9,444

)

 

 

(7,993

)

Accounts payable

 

(12,910

)

 

 

124,026

 

Accrued expenses

 

25,543

 

 

 

56,228

 

Income taxes

 

263

 

 

 

18,363

 

Other, net

 

(15,607

)

 

 

18,680

 

Net cash provided by operating activities

 

536,541

 

 

 

663,079

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(228,208

)

 

 

(263,077

)

Payments for acquisition of businesses, net of cash acquired

 

(863,371

)

 

 

(5,780

)

Proceeds from sales of assets

 

26,504

 

 

 

4,823

 

Net cash used in investing activities

 

(1,065,075

)

 

 

(264,034

)

Cash flows from financing activities:

 

 

 

Proceeds from long-term debt

 

450,000

 

 

 

650,000

 

Payments of long-term debt

 

(14,226

)

 

 

(570,999

)

Payments of debt issuance costs

 

(1,149

)

 

 

(5,525

)

Net payments of short-term debt

 

 

 

 

(120,000

)

Proceeds from exercise of stock options

 

133

 

 

 

1,665

 

Payments of cash dividends

 

(38,223

)

 

 

(35,410

)

Tax withholdings on employee share-based awards

 

(17,625

)

 

 

(8,105

)

Net cash provided by (used in) financing activities

 

378,910

 

 

 

(88,374

)

Net (decrease) increase in cash and cash equivalents

 

(149,624

)

 

 

310,671

 

Cash and cash equivalents at beginning of the period

 

336,545

 

 

 

78,275

 

Cash and cash equivalents at end of the period

$

186,921

 

 

$

388,946

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

 

Nine months ended January 31,

 

 

2022

 

 

 

2021

 

Cash paid during the period for:

 

 

 

Interest, net of amount capitalized

$

34,800

 

$

32,862

Income taxes, net

 

27,387

 

 

 

48,137

 

Noncash investing and financing activities:

 

 

 

Purchased property and equipment in accounts payable

 

38,751

 

 

 

28,605

 

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

 

49,259

 

 

 

 

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

 

79,867

 

 

 

1,109

 

Summary by Category (Amounts in thousands)

Three months ended January 31, 2022

Fuel

 

Grocery &

General

Merchandise

 

Prepared Food

& Dispensed

Beverage

 

Other

 

Total

Revenue

$

1,951,422

 

 

$

732,514

 

 

$

292,884

 

 

$

71,897

 

 

$

3,048,717

 

Gross profit

$

237,873

 

 

$

234,064

 

 

$

169,773

 

 

$

22,785

 

 

$

664,495

 

 

 

12.2

%

 

 

32.0

%

 

 

58.0

%

 

 

31.7

%

 

 

21.8

%

Fuel gallons sold

 

621,770

 

 

 

 

 

 

 

 

 

Three months ended January 31, 2021

 

 

 

 

 

 

 

 

 

Revenue

$

1,100,875

 

 

$

624,465

 

 

$

264,018

 

 

$

18,670

 

 

$

2,008,028

 

Gross profit

$

170,399

 

 

$

191,502

 

 

$

159,988

 

 

$

18,292

 

 

$

540,181

 

 

 

15.5

%

 

 

30.7

%

 

 

60.6

%

 

 

98.0

%

 

 

26.9

%

Fuel gallons sold

 

518,408

 

 

 

 

 

 

 

 

 

Summary by Category (Amounts in thousands)

Nine months ended January 31, 2022

Fuel

 

Grocery &

General

Merchandise

 

Prepared Food

& Dispensed

Beverage

 

Other

 

Total

Revenue

$

5,967,408

 

 

$

2,397,483

 

 

$

910,828

 

 

$

217,933

 

 

$

9,493,652

 

Gross profit

$

704,231

 

 

$

785,412

 

 

$

545,377

 

 

$

70,952

 

 

$

2,105,972

 

 

 

11.8

%

 

 

32.8

%

 

 

59.9

%

 

 

32.6

%

 

 

22.2

%

Fuel gallons sold

 

1,958,061

 

 

 

 

 

 

 

 

 

Nine months ended January 31, 2021

 

 

 

 

 

 

 

 

 

Revenue

$

3,380,348

 

 

$

2,074,552

 

 

$

823,605

 

 

$

50,449

 

 

$

6,328,954

 

Gross profit

$

584,584

 

 

$

666,093

 

 

$

495,297

 

 

$

49,470

 

 

$

1,795,444

 

 

 

17.3

%

 

 

32.1

%

 

 

60.1

%

 

 

98.1

%

 

 

28.4

%

Fuel gallons sold

 

1,645,497

 

 

 

 

 

 

 

 

 

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

F2022

9.0

%

 

2.5

%

 

5.7

%

 

 

 

 

F2022

35.1 ¢

 

34.7 ¢

 

38.3 ¢

 

 

F2021

(14.6

)

 

(8.6

)

 

(12.1

)

 

6.4

%

 

(8.1

) %

F2021

38.2

 

35.3

 

32.9

 

33.0 ¢

 

34.9 ¢

F2020

(2.0

)

 

(1.8

)

 

(2.0

)

 

(14.7

)

 

(5.1

)

F2020

24.4

 

22.9

 

21.7

 

40.8

 

26.8

Grocery & General Merchandise

 

Grocery & General Merchandise

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2022

7.0

%

 

6.8

%

 

7.7

%

 

 

 

 

F2022

33.0

%

 

33.3

%

 

32.0

%

 

 

 

 

F2021

3.6

 

 

6.6

 

 

5.4

 

 

12.5

%

 

6.6

%

F2021

32.2

 

 

33.3

 

 

30.7

 

 

31.8

%

 

32.0

%

F2020

3.2

 

 

3.2

 

 

3.5

 

 

(2.0

)

 

1.9

 

F2020

31.3

 

 

33.3

 

 

32.9

 

 

30.4

 

 

32.0

 

Prepared Food & Dispensed Beverage

 

Prepared Food & Dispensed Beverage

Same-store Sales

Margin

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Fiscal

Year

F2022

10.8

%

 

4.1

%

 

7.4

%

 

 

 

 

F2022

61.0

%

 

60.6

%

 

58.0

%

 

 

 

 

F2021

(9.8

)

 

(3.6

)

 

(5.0

)

 

13.4

%

 

(2.1

) %

F2021

59.7

 

 

60.1

 

 

60.6

 

 

60.1

%

 

60.1

%

F2020

1.6

 

 

1.9

 

 

2.8

 

 

(13.5

)

 

(1.5

)

F2020

62.2

 

 

60.9

 

 

60.2

 

 

60.0

 

 

60.9

 

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, 2022 and 2021:

(in thousands)

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

 

2022

 

 

2021

 

 

2022

 

 

 

2021

Net income

$

64,024

 

$

38,627

 

$

280,014

 

 

$

271,202

Interest, net

 

14,431

 

 

11,469

 

 

41,681

 

 

 

35,510

Federal and state income taxes

 

19,514

 

 

10,452

 

 

88,033

 

 

 

82,549

Depreciation and amortization

 

75,529

 

 

65,185

 

 

225,675

 

 

 

195,299

EBITDA

 

173,498

 

 

125,733

 

 

635,403

 

 

 

584,560

Loss (gain) on disposal of assets and impairment charges

 

838

 

 

1,649

 

 

(869

)

 

 

3,808

Adjusted EBITDA

$

174,336

 

$

127,382

 

$

634,534

 

 

$

588,368

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, 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 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 March 9, 2022. 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:
Brian Johnson (515) 965-6587

Media Relations Contact:
Katie Petru (515) 446-6772

Source: Casey’s General Stores
Categories: Press Releases
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