10-QPeriod: Q1 FY2004

CASEYS GENERAL STORES INC Quarterly Report for Q1 Ended Jul 31, 2003

Filed September 11, 2003For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) reported its results for the fiscal quarter ended July 31, 2003. The company demonstrated revenue growth driven by increased gasoline sales and a modest rise in grocery and general merchandise sales, supported by new store openings. Net income saw a healthy increase, reflecting improved gross profit margins in its non-gasoline categories, particularly prepared foods. The company continues to invest in its store base, with significant capital expenditures planned for new constructions and remodels. Despite a slight increase in the current ratio, liquidity appears stable, supported by operating cash flows and available credit lines. Management anticipates that ongoing investments and operational cash flow will be sufficient to meet future capital needs.

Key Highlights

  • 1Net sales increased by 10.7% to $609.4 million, primarily driven by a 17.2% rise in retail gasoline sales.
  • 2Gross profit margins improved in grocery/general merchandise (37.4% from 36.5%) and prepared foods (60.8% from 59.1%).
  • 3Net income rose by 13.4% to $13.8 million, or $0.28 per diluted share, up from $12.2 million, or $0.25 per diluted share, in the prior year.
  • 4Operating expenses as a percentage of net sales decreased to 12.7% from 13.2%, aided by higher gasoline prices.
  • 5Capital expenditures for property and equipment were $18.3 million, up from $17.6 million in the prior year, with approximately $70 million planned for fiscal 2004.
  • 6The company maintained a strong cash position, with cash and cash equivalents increasing to $52.7 million.
  • 7Long-term debt stood at $149.6 million, with various senior notes and mortgage notes comprising the majority of the debt.

Frequently Asked Questions

Revenue growth was primarily driven by a significant increase in retail gasoline sales, which rose by 17.2% due to a 9% increase in gallons sold and a 7.6% rise in the average retail price per gallon. Additionally, retail sales of grocery and general merchandise increased by 4.1%, attributed to the addition of 30 new company stores and a larger number of established stores.

Profitability improved as net income increased by 13.4% to $13.8 million. This was supported by improved gross profit margins in key non-gasoline categories, particularly grocery/general merchandise and prepared foods, along with a decrease in operating expenses as a percentage of net sales.

Casey's General Stores plans to expend approximately $70 million in fiscal 2004 for the acquisition, construction, and remodeling of company stores. These capital expenditures are expected to be funded primarily from existing cash balances and funds generated from operations.

The company's financial health appears stable. Total current assets were $135.9 million against total current liabilities of $136.9 million, resulting in a current ratio of 0.99. Cash and cash equivalents stood at a healthy $52.7 million. Management believes that its available credit lines and operating cash flow are sufficient to meet its working capital needs.