10-QPeriod: Q2 FY2010

CASEYS GENERAL STORES INC Quarterly Report for Q2 Ended Oct 31, 2009

Filed December 7, 2009For Securities:CASY

Summary

Casey's General Stores, Inc. reported its financial results for the second quarter and the first six months ended October 31, 2009. For the second quarter, the company saw an increase in net earnings driven by higher gross profit dollars from gasoline, grocery, and prepared food sales, despite a decrease in total revenue primarily due to lower gasoline prices. Same-store sales for grocery, general merchandise, and prepared foods showed positive gains. For the six-month period, total revenue decreased, largely impacted by a significant drop in average retail gasoline prices, though gallons sold increased. Net earnings for the six months also increased substantially, benefiting from improved gross profit margins across all major categories and a lower effective tax rate due to the expiration of certain tax benefit statutes of limitations. The company continued its strategy of reinvesting in its store base, with significant capital expenditures for store construction, acquisition, and remodeling.

Financial Highlights

27 data points
Beta

Revenue

$1.15B

17.9% Gross Margin

Net Income

$33.59M

2.9% Net Margin

EPS (Diluted)

$0.66

Cash & Equivalents

$177.95M

Free Cash Flow

$14.54M

Financial Statements
Beta
Revenue$1.15B
Cost of Revenue$948.60M
Gross Profit$206.36M
Operating Expenses$131.01M
Interest Expense$2.71M
Net Income$33.59M
EPS (Basic)$0.66
EPS (Diluted)$0.66
Shares Outstanding (Basic)50.90M
Shares Outstanding (Diluted)51.05M

Key Highlights

  • 1Net earnings increased by 22.9% for the three months ended October 31, 2009, compared to the prior year period.
  • 2Total revenue for the three months ended October 31, 2009, decreased by 16.9% to $1,154,964 thousand, primarily due to lower gasoline prices.
  • 3Gross profit margin for the three months ended October 31, 2009, improved to 17.9% from 13.7% in the prior year period.
  • 4For the six months ended October 31, 2009, net earnings increased by 38.6% to $77,785 thousand.
  • 5Total assets grew to $1,342,348 thousand as of October 31, 2009, from $1,262,695 thousand as of April 30, 2009, driven by increases in property and equipment.
  • 6Cash and cash equivalents increased to $177,951 thousand as of October 31, 2009, from $145,695 thousand as of April 30, 2009.
  • 7The company paid a total of $11,700 thousand to settle two class-action lawsuits concerning wage and hour claims.

Frequently Asked Questions

In the second quarter ended October 31, 2009, Casey's General Stores reported a 22.9% increase in net earnings, reaching $33,592 thousand. Total revenue decreased by 16.9% to $1,154,964 thousand, mainly due to a 24.5% decline in retail gasoline sales revenue despite a slight increase in gallons sold. However, gross profit margin improved significantly to 17.9% from 13.7%, driven by better margins in gasoline, grocery, and prepared food categories.

Total assets increased from $1,262,695 thousand to $1,342,348 thousand. This growth was primarily driven by an increase in Property and equipment, net of accumulated depreciation, from $918,410 thousand to $957,430 thousand. Cash and cash equivalents also saw a notable increase, rising from $145,695 thousand to $177,951 thousand. On the liabilities side, total liabilities increased slightly, with accounts payable rising significantly from $115,436 thousand to $141,617 thousand.

The company disclosed the settlement of two class-action lawsuits concerning wage and hour claims brought by current and former assistant managers and non-management-level store employees. The total settlement amount paid by the company, inclusive of plaintiffs' attorneys' fees and costs, was $11,700 thousand, with $3,000 thousand covered by the directors' and officers' insurance carrier. The company also mentioned ongoing 'hot fuel' litigation, for which management does not believe it is liable and intends to contest vigorously.

Capital expenditures for property and equipment during the first six months of fiscal 2010 were $75,237 thousand, an increase from $70,240 thousand in the prior year's comparable period. The company anticipates spending approximately $165,000 thousand in fiscal 2010, primarily for store construction, acquisition, and remodeling, funded by existing cash and operational cash flow.