Casey’s General Stores, Inc. (Nasdaq: CASY) today reported results for the first quarter of fiscal 2002 ended July 31, 2001. Basic earnings were $0.26 per share compared with $0.32 for the first quarter of fiscal 2001. Sales revenue was up 9.5% to $578.9 million from $528.9 million, and gross profit was up 4.2% to $105 million from $100.8 million.
“A year ago, we were reporting record earnings, so quarter-to-quarter comparisons set a high standard indeed,” said Chairman Donald F. Lamberti. “In light of that high standard, we are especially pleased to report such a significant improvement in sales. The improvement is an important first step in achieving our annual performance goals for fiscal 2002.”
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The first two of the Company’s five annual goals are tied to Casey’s core business–gasoline sales. Management intends to increase gallons sold by 15% and achieve an average margin of 10.5 cents per gallon.
“There was good news on the sales side,” said President & CEO Ronald M. Lamb. “Total gasoline gallons sold were up 12.8% for the quarter. Given our 6.2% increase in same-store sales and the progress we’re making at adding pay-at-the-pump, we believe the 15% goal is attainable.” The Company now has 183 stores with pay-at-the-pump capability and expects to have 350 by the fiscal year-end.
The necessity of staying competitive on retail prices combined with increasing wholesale gasoline costs in July held the quarter’s average margin to 9.3 cents per gallon. For the previous first quarter, the average margin was an unusually high 13.1 cents. “The difference in margins translated to $0.11 per share–an enormous impact,” Lamb said. The narrow margins continued into August.
The next two goals are to increase inside sales 15% and to maintain a 38.7% average margin on those sales. For the first quarter, inside sales were up 14.6% and the average margin was 38.5%. Lamb shared this assessment: “The chain-wide sales increase was very close to goal, and the average margin was even closer. The 8.3% improvement in same-store sales was a strong positive.”
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By GlobalDataSales in the grocery & other merchandise category were up 15.3% and are expected to benefit from the extensive reset now completed in virtually all Casey’s stores. The category’s average margin improved to 34.5%.
Prepared food & fountain sales were up 11.7%. This category’s average margin decreased to 54.9% from 57.3% primarily due to wholesale price increases on cheese and meat toppings for pizza. “These costs are cyclical,” Lamb explained, “and should come down over the next few months.”
The fifth annual goal is to keep operating expenses under 14% of sales and allow them to grow no faster than gross profit. To make quarterly comparisons between growth in expenses and gross profit useful for decision-making, management normalizes the margins on gasoline at the Company’s historical average of 10.5 cents.
Lamb gave perspective to first quarter performance relative to the two-part goal: “We did well on the first part–operating expenses were only 12.4% of sales. We were far from the mark on the second–expenses grew 12.3% while gross profit grew only 4.2%. With the volatility in gas margins neutralized, the first quarter comparison becomes 12.3% to 13.2% and starts a quarter-to-quarter trend line that will help us be better planners throughout the year.”
At its August 28, 2001 meeting, the Board of Directors declared a regular quarterly dividend of $0.02 per share payable November 15, 2001 to shareholders of record as of November 1, 2001. The Directors and the management team invite all shareholders to attend the Company’s annual meeting at 9:00 a.m. on September 21 at Casey’s corporate headquarters in Ankeny, Iowa.
Casey’s General Stores, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
Three months ended July 31,
2001 2000
——– ——–
Net sales $578,923 $528,891
Franchise revenue 876 1,145
——– ——–
Total revenue $579,799 $530,036
——– ——–
Cost of goods sold $473,877 $428,062
Operating expenses 71,776 63,892
Depreciation and
amortization 10,807 10,071
Interest, net 3,103 2,971
——– ——–
$559,563 $504,996
——– ——–
Income before income taxes $20,236 $25,040
Federal and state income
taxes 7,528 9,315
——– ——–
Net income $12,708 $15,725
======== ========
Basic earnings per share $.26 $.32
Weighted average shares
outstanding 49,499 49,453
Diluted earnings per share $.26 $.32
Weighted average shares
outstanding 49,648 49,599
Casey’s General Stores, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
July 31, April 30,
2001 2001
——– ———
Assets
Current assets
Cash and cash equivalents $15,419 $22,958
Short-term investments 13,666 18,225
Receivables 7,538 5,190
Inventories 64,431 51,772
Prepaid expenses 6,267 5,461
Income taxes receivable — 3,287
——– ——–
Total current assets $107,321 $106,893
———————————————————————
Other assets, net of amortization 1,279 1,297
Property and equipment, net of
accumulated depreciation
July 31, 2001 $294,738
April 30, 2001 $284,483 604,283 585,294
——– ——–
Total assets $712,883 $693,484
=====================================================================
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable $3,300 $ —
Current maturities of long-term debt 9,454 9,482
Accounts payable 67,823 67,735
Accrued expenses 25,360 24,824
Income taxes payable 3,265 —
——– ——–
Total current liabilities $109,202 $102,041
———————————————————————
Long-term debt, net of
current maturities $182,015 $183,107
Deferred income taxes 65,150 63,650
Deferred compensation 4,252 4,210
——– ——–
Total liabilities $360,619 $353,008
——– ——–
Total shareholders’ equity 352,264 340,476
——– ——–
Total liabilities and shareholders’ equity $712,883 $693,484
=====================================================================
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. 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.
———————————————————————-
Sales and Gross Profit by Product
(Dollars in thousands)
Grocery Prepared
Three months ended & other food
7/31/01 Gasoline merchandise & fountain Other Total
Sales $350,661 $166,654 $40,102 $21,506 $578,923
Gross profit $22,218 $57,546 $21,996 $3,286 $105,046
Margin 6.3% 34.5% 54.9% 15.3% 18.1%
Three months ended
7/31/00
Sales $322,855 $144,507 $35,893 $25,636 $528,891
Gross profit $27,685 $48,663 $20,557 $3,924 $100,829
Margin 8.6% 33.7% 57.3% 15.3% 19.1%
———————————————————————-
———————————————————————-
Diluted Earnings per Share
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
1996 $ 0.15 $ 0.17 $ 0.13 $ 0.06 $ 0.51
1997 0.17 0.17 0.10 0.07 0.51
1998 0.20 0.21 0.14 0.09 0.64
1999 0.24 0.24 0.17 0.12 0.76
2000 0.28 0.24 0.10 0.14 0.76
2001 0.32 0.28 0.08 0.03 0.71
2002 0.26
———————————————————————-
———————————————————————-
Gasoline Operations
(In thousands, except margins)
Fiscal Year
07/31/2001 07/31/2000 2001 2000 1999 1998 1997
Gallons
sold 238,854 211,706 799,974 783,250 692,770 608,977 542,610
Margin per
gallon $ 0.093 $ 0.131 $ 0.111 $ 0.098 $ 0.105 $ 0.106 $ 0.102
Gross
profit $22,218 $27,685 $88,476 $77,080 $72,949 $64,795 $55,183
———————————————————————-
———————————————————————-
Same Store Sales Growth
(Stores open for at least one full year)
Fiscal Year
07/31/2001 07/31/2000 2001 2000 1999 1998 1997
Gas gallons sold 6.2% -1.2% -5.6% 3.5% 6.3% 3.0% 1.6%
Grocery & other
merchandise 8.7% 5.1% -0.6% 14.5% 9.0% 2.7% 3.5%
Prepared food &
fountain 6.9% 3.0% 2.9% -0.1% 3.7% 11.3% 9.6%
———————————————————————-
Corporate information is available at this web site: http://www.caseys.com
