Casey's General Stores Inc.

12/09/2024 | Press release | Distributed by Public on 12/09/2024 15:15

Casey's Announces Second Quarter Results

December 9, 2024
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ANKENY, Iowa--(BUSINESS WIRE)-- 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 six months ended October 31, 2024.

Second Quarter Key Highlights

  • Diluted EPS of $4.85, up 14% from the same period a year ago. Net income was $181 million, up 14%, and EBITDA 1 was $349 million, up 14%, from the same period a year ago.
  • Inside same-store sales increased 4.0% compared to prior year, and 7.1% on a two-year stack basis, with an inside margin of 42.2%. Total inside gross profit increased 12.0% to $619.7 million compared to the prior year.
  • Same-store fuel gallons were down 0.6% compared to prior year with a fuel margin of 40.2 cents per gallon. Total fuel gross profit increased 1.1% to $312.3 million compared to the prior year.
  • Same-store operating expenses excluding credit card fees were up 2.3%, favorably impacted by a 1% reduction in same-store labor hours.
  • Subsequent to quarter end, on November 1, 2024, Casey's closed the previously announced Fikes Wholesale ("Fikes") transaction, acquiring 198 CEFCO Convenience Stores.

"Casey's delivered a strong second quarter highlighted by robust inside gross profit growth," said Darren Rebelez, Board Chair, President and CEO. "Inside same-store sales were driven by the prepared food and dispensed beverage category, with hot sandwiches and cold dispensed beverage performing exceptionally well. Our fuel team continues to balance volume and margin as they achieved over 40 cents per gallon fuel margin while outpacing the relevant geographic market in same-store fuel gallons. The operations team continues to focus on efficiency while serving our guests, as we reduced same-store labor hours for the tenth consecutive quarter. Finally, we are excited to have closed on the Fikes acquisition and we want to welcome the team to the Casey's family."

Earnings

Three Months Ended October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Net income (in thousands)

$

180,918

$

158,782

$

361,116

$

328,019

Diluted earnings per share

$

4.85

$

4.24

$

9.68

$

8.76

EBITDA (in thousands)

$

348,880

$

305,858

$

694,662

$

622,757

For the quarter, net income, diluted EPS, and EBITDA were up compared to the same period a year ago primarily due to higher inside and fuel gross profit, partially offset by higher operating expenses primarily due to operating 93 additional stores.

_________________

1 EBITDA is reconciled to net income below.

Inside

Three Months Ended October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Inside sales (in thousands)

$

1,467,524

$

1,346,911

$

2,941,631

$

2,716,660

Inside same-store sales

4.0

%

2.9

%

3.1

%

4.2

%

Grocery and general merchandise same-store sales

3.6

%

1.7

%

2.5

%

3.5

%

Prepared food and dispensed beverage same-store sales

5.2

%

6.1

%

4.7

%

5.9

%

Inside gross profit (in thousands)

$

619,651

$

553,264

$

1,233,973

$

1,109,698

Inside margin

42.2

%

41.1

%

41.9

%

40.8

%

Grocery and general merchandise margin

35.6

%

34.0

%

35.5

%

34.0

%

Prepared food and dispensed beverage margin

58.7

%

59.0

%

58.5

%

58.6

%

Total inside sales were up 9.0% for the quarter driven by strong performance in the prepared food and dispensed beverage category, including hot sandwiches and dispensed beverage as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise category. Inside margin was up 110 basis points compared to the same quarter a year ago, driven primarily by product mix and asset protection initiatives.

Fuel 2

Three Months Ended October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Fuel gallons sold (in thousands)

775,914

730,439

1,548,450

1,444,429

Same-store gallons sold

(0.6

)%

-

%

(0.1

)%

0.2

%

Fuel gross profit (in thousands)

$

312,252

$

308,835

$

626,800

$

605,813

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

40.2

¢

42.3

¢

40.5

¢

41.9

¢

For the quarter, total fuel gallons sold increased 6.2% compared to the prior year primarily due to the store count increase, while same-store gallons were down 0.6% versus the prior year. The Company's total fuel gross profit was up 1.1% versus the prior year. The Company sold $4.9 million in renewable fuel credits (RINs) in the second quarter, a decrease of $3.5 million from the same quarter in the prior year.

Operating Expenses

Three Months Ended October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Operating expenses (in thousands)

$

609,679

$

579,703

$

1,219,153

$

1,140,558

Credit card fees (in thousands)

$

62,275

$

62,917

$

126,084

$

123,902

Same-store operating expenses excluding credit card fees

2.3

%

2.1

%

1.5

%

2.6

%

Operating expenses increased approximately 5% during the second quarter. Operating 93 more stores than prior year accounted for approximately 4% of the increase. 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.

Expansion

Store Count

April 30, 2024

2,658

New store construction

18

Acquisitions

18

Closed

(9

)

October 31, 2024

2,685

_________________

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

Liquidity

At October 31, 2024, the Company had approximately $1.25 billion in available liquidity, consisting of approximately $352 million in cash and cash equivalents on hand and approximately $900 million in available borrowing capacity on existing lines of credit. The liquidity calculation excludes the impact of the restricted cash included within long-term assets as of October 31, 2024. The restricted cash relates to cash held in a funding account for the acquisition of Fikes, which closed on November 1, 2024, subsequent to quarter end.

Share Repurchase

During the second quarter, the Company did not repurchase any shares. The Company has approximately $295 million remaining under its existing share repurchase authorization.

Dividend

At its December meeting, the Board of Directors approved a quarterly dividend of $0.50 per share. The dividend is payable February 17, 2025, to shareholders of record on February 3, 2025.

Fiscal 2025 Outlook

Casey's is updating the 2025 outlook primarily due to the acquisition of Fikes, which closed on November 1, 2024.

For the second half of fiscal 2025 specifically related to the Fikes transaction: Casey's expects to incur an additional $15 to $20 million in one-time deal and integration costs, primarily in the third quarter. EBITDA contribution from Fikes is expected to be modestly dilutive in the third quarter, primarily due to the transaction and integration costs previously mentioned. EBITDA contribution from Fikes is expected to be modestly accretive in the fourth quarter. Interest expense will be approximately $35 million higher than the original outlook due to the financing of the transaction.

For Casey's total fiscal 2025 year outlook including the impact of the Fikes acquisition: EBITDA is expected to increase at least 10%. Total operating expenses are expected to increase 11% to 13% for the fiscal year, including approximately $25 to $30 million in one-time deal and integration costs, while same-store operating expense excluding credit card fees are expected to only increase 2% for the year. Net interest expense is expected to be approximately $90 million for the year. Depreciation and amortization is expected to be approximately $410 million and the purchase of property and equipment is expected to be approximately $550 million. The tax rate is expected to be approximately 23% to 25% for the fiscal year.

Casey's is not updating its outlook for the following metrics: Casey's expects to add approximately 270 stores for the fiscal year. The Company expects inside same-store sales to increase 3% to 5% and inside margin comparable to fiscal 2024. The Company expects same-store fuel gallons sold to be between negative 1% to positive 1%.

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 October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Total revenue

$

3,946,771

$

4,064,400

$

8,044,508

$

7,933,651

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

2,988,212

3,178,839

6,130,693

6,170,336

Operating expenses

609,679

579,703

1,219,153

1,140,558

Depreciation and amortization

96,592

85,598

191,001

168,503

Interest, net

12,553

12,306

26,620

24,801

Income before income taxes

239,735

207,954

477,041

429,453

Federal and state income taxes

58,817

49,172

115,925

101,434

Net income

$

180,918

$

158,782

$

361,116

$

328,019

Net income per common share

Basic

$

4.87

$

4.27

$

9.73

$

8.80

Diluted

$

4.85

$

4.24

$

9.68

$

8.76

Basic weighted average shares

37,124,541

37,227,932

37,105,886

37,264,442

Plus effect of stock compensation

186,938

203,143

202,392

187,811

Diluted weighted average shares

37,311,479

37,431,075

37,308,278

37,452,253

Casey's General Stores, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

October 31, 2024

April 30, 2024

Assets

Current assets

Cash and cash equivalents

$

351,723

$

206,482

Receivables

156,407

151,793

Inventories

432,268

428,722

Prepaid and other current assets

38,296

25,791

Income taxes receivable

-

17,066

Total current assets

978,694

829,854

Restricted cash

1,160,118

-

Other assets, net of amortization

192,704

195,559

Goodwill

657,529

652,663

Property and equipment, net of accumulated depreciation of $2,981,245 at October 31, 2024 and $2,883,925 at April 30, 2024

4,736,525

4,669,357

Total assets

$

7,725,570

$

6,347,433

Liabilities and Shareholders' Equity

Current liabilities

Current maturities of long-term debt and finance lease obligations

$

245,558

$

53,181

Accounts payable

573,320

569,527

Accrued expenses

296,374

330,758

Income taxes payable

1,284

-

Total current liabilities

1,116,536

953,466

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

2,461,922

1,582,758

Deferred income taxes

608,904

596,850

Insurance accruals, net of current portion

30,227

30,046

Other long-term liabilities

170,535

168,932

Total liabilities

4,388,124

3,332,052

Total shareholders' equity

3,337,446

3,015,381

Total liabilities and shareholders' equity

$

7,725,570

$

6,347,433

Casey's General Stores, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

Six months ended October 31,

2024

2023

Cash flows from operating activities:

Net income

$

361,116

$

328,019

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

Depreciation and amortization

191,001

168,503

Amortization of debt issuance costs

555

555

Change in excess replacement cost over LIFO inventory valuation

6,398

7,946

Share-based compensation

23,645

19,485

Loss (gain) on disposal of assets and impairment charges

4,422

(232

)

Deferred income taxes

12,054

39,353

Changes in assets and liabilities:

Receivables

(855

)

(21,897

)

Inventories

(8,723

)

(44,714

)

Prepaid and other current assets

(12,505

)

(10,693

)

Accounts payable

(9,902

)

(10,400

)

Accrued expenses

(36,228

)

(20,925

)

Income taxes

20,780

21,992

Other, net

299

4,788

Net cash provided by operating activities

552,057

481,780

Cash flows from investing activities:

Purchase of property and equipment

(211,226

)

(175,955

)

Payments for acquisition of businesses, net of cash acquired

(46,341

)

(139,359

)

Proceeds from sales of assets

11,720

8,291

Net cash used in investing activities

(245,847

)

(307,023

)

Cash flows from financing activities:

Proceeds from long-term debt

1,100,000

-

Payments of long-term debt and finance lease obligations

(34,637

)

(35,135

)

Payments of debt issuance costs

(5,191

)

-

Payments of cash dividends

(35,179

)

(30,988

)

Repurchase of common stock and payment of related excise taxes

(734

)

(59,491

)

Tax withholdings on employee share-based awards

(25,110

)

(18,121

)

Net cash provided by (used) in financing activities

999,149

(143,735

)

Net increase in cash, cash equivalents and restricted cash

1,305,359

31,022

Cash and cash equivalents at beginning of the period

206,482

378,869

Cash, cash equivalents and restricted cash at end of the period

$

1,511,841

$

409,891

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Six months ended October 31,

2024

2023

Cash and cash equivalents

$

351,723

$

409,891

Restricted cash

1,160,118

-

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

$

1,511,841

$

409,891

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

Six months ended October 31,

2024

2023

Cash paid during the period for:

Interest, net of amount capitalized

$

33,516

$

31,429

Income taxes, net

82,507

36,037

Noncash investing and financing activities:

Purchased property and equipment in accounts payable

59,312

78,684

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

11,210

11,216

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

-

8,273

Summary by Category (Amounts in thousands)

Three Months Ended October 31, 2024

Prepared Food

& Dispensed

Beverage

Grocery &

General

Merchandise

Fuel

Other

Total

Revenue

$

417,827

$

1,049,697

$

2,414,632

$

64,615

$

3,946,771

Gross profit

$

245,458

$

374,193

$

312,252

$

26,656

$

958,559

58.7

%

35.6

%

12.9

%

41.3

%

24.3

%

Fuel gallons sold

775,914

Three Months Ended October 31, 2023

Revenue

$

382,481

$

964,430

$

2,646,478

$

71,011

$

4,064,400

Gross profit

$

225,664

$

327,600

$

308,835

$

23,462

$

885,561

59.0

%

34.0

%

11.7

%

33.0

%

21.8

%

Fuel gallons sold

730,439

Summary by Category (Amounts in thousands)

Six Months Ended October 31, 2024

Prepared Food

& Dispensed

Beverage

Grocery &

General

Merchandise

Fuel

Other

Total

Revenue

$

822,956

$

2,118,675

$

4,970,274

$

132,603

$

8,044,508

Gross profit

$

481,499

$

752,474

$

626,800

$

53,042

$

1,913,815

58.5

%

35.5

%

12.6

%

40.0

%

23.8

%

Fuel gallons sold

1,548,450

Six Months Ended October 31, 2023

Revenue

$

755,294

$

1,961,366

$

5,073,811

$

143,180

$

7,933,651

Gross profit

$

442,525

$

667,173

$

605,813

$

47,804

$

1,763,315

58.6

%

34.0

%

11.9

%

33.4

%

22.2

%

Fuel gallons sold

1,444,429

Prepared Food & Dispensed Beverage

Prepared Food & Dispensed Beverage

Same-store Sales

Margin

Q1

Q2

Q3

Q4

Fiscal

Year

Q1

Q2

Q3

Q4

Fiscal

Year

F2025

4.4

%

5.2

%

F2025

58.3

%

58.7

%

F2024

5.9

6.1

7.5

%

8.8

%

6.8

%

F2024

58.2

59.0

59.6

%

58.1

%

58.7

%

F2023

8.4

10.5

5.0

4.9

7.1

F2023

55.6

56.7

57.3

56.8

56.6

Grocery & General Merchandise

Grocery & General Merchandise

Same-store Sales

Margin

Q1

Q2

Q3

Q4

Fiscal

Year

Q1

Q2

Q3

Q4

Fiscal

Year

F2025

1.6

%

3.6

%

F2025

35.4

%

35.6

%

F2024

5.2

1.7

2.8

%

4.3

%

3.5

%

F2024

34.1

34.0

33.9

%

34.4

%

34.1

%

F2023

5.5

6.9

5.8

7.1

6.3

F2023

33.9

33.3

34.0

33.0

33.6

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

F2025

0.7

%

(0.6

)%

F2025

40.7

¢

40.2

¢

F2024

0.4

-

(0.4

)%

0.9

%

0.1

%

F2024

41.6

42.3

37.3

¢

36.5

¢

39.5

¢

F2023

(2.3

)

0.3

(0.5

)

-

(0.8

)

F2023

44.7

40.5

40.7

34.6

40.2

RECONCILIATION OF NET INCOME TO EBITDA

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. EBITDA is not considered to be a GAAP measure, and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. This measure has limitations as an analytical tool, and should not be considered in isolation or as a substitute 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 is useful to investors in evaluating our operating performance because securities analysts and other interested parties use this calculation as a measure of financial performance and debt service capabilities, and it is regularly used by management 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, 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 this non-GAAP financial measure with those used by other companies.

The following table contains a reconciliation of net income to EBITDA for the three and six months ended October 31, 2024 and 2023:

(in thousands)

Three Months Ended October 31,

Six Months Ended October 31,

2024

2023

2024

2023

Net income

$

180,918

$

158,782

$

361,116

$

328,019

Interest, net

12,553

12,306

26,620

24,801

Federal and state income taxes

58,817

49,172

115,925

101,434

Depreciation and amortization

96,592

85,598

191,001

168,503

EBITDA

$

348,880

$

305,858

$

694,662

$

622,757

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 the potential impact the Fikes transaction, 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 December 10, 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.

Investor Relations Contact:
Brian Johnson (515) 446-6587

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

Source: Casey's General Stores
Categories: Press Releases