10-QPeriod: Q1 FY2013

CASEYS GENERAL STORES INC Quarterly Report for Q1 Ended Jul 31, 2012

Filed September 10, 2012For Securities:CASY

Summary

Casey's General Stores, Inc. reported its second quarter fiscal year 2013 results, showing a slight decrease in total revenue driven by a decline in gasoline sales, despite an increase in gallons sold. However, this was partially offset by strong growth in same-store sales for grocery/merchandise and prepared foods and fountain categories. The company experienced a slight dip in net income compared to the prior year, primarily due to a lower gasoline gross profit margin and increased operating expenses. Despite these headwinds, the company continued its strategic investments in store growth and renovations, with capital expenditures focused on property and equipment. The balance sheet indicates a healthy liquidity position with a solid cash balance, though current liabilities slightly exceed current assets. Long-term debt remains significant, consistent with previous periods. The company also highlighted ongoing efforts in store expansion and operational improvements. Investors should monitor the impact of gasoline price volatility and competitive pressures on future profitability, alongside the successful integration of new store openings and remodels.

Financial Highlights

43 data points
Beta

Revenue

$1.87B

15.2% Gross Margin

Net Income

$37.31M

2.0% Net Margin

EPS (Diluted)

$0.97

Total Assets

$1.85B

Cash & Equivalents

$89.64M

Free Cash Flow

$34.76M

Financial Statements
Beta
Revenue$1.87B
Cost of Revenue$1.58B
Gross Profit$284.07M
Operating Expenses$189.40M
Interest Expense$8.90M
Net Income$37.31M
EPS (Basic)$0.98
EPS (Diluted)$0.97
Shares Outstanding (Basic)38.22M
Shares Outstanding (Diluted)38.57M

Key Highlights

  • 1Total revenue decreased by 0.3% to $1,868,302 thousand for the three months ended July 31, 2012, compared to the prior year period.
  • 2Same-store sales for grocery and other merchandise increased by 2.6%, and prepared food and fountain increased by 10.6%, demonstrating strength in higher-margin categories.
  • 3Net income for the quarter decreased by 0.9% to $39,031 thousand, or $1.01 per diluted share, compared to $39,391 thousand, or $1.03 per diluted share, in the prior year.
  • 4Total gross profit margin improved to 15.4% from 14.2% year-over-year, driven by increases in grocery/merchandise and prepared food margins, partially offsetting lower gasoline margins.
  • 5Operating expenses increased by 10.5%, largely due to the addition of 33 more stores compared to the same period last year and expanded 24-hour operations and pizza delivery.
  • 6Cash and cash equivalents increased to $89,636 thousand at July 31, 2012, from $55,919 thousand at April 30, 2012.
  • 7Capital expenditures for property and equipment were $71,776 thousand for the quarter, supporting store construction and remodeling efforts.

Frequently Asked Questions

Total revenue saw a slight decrease of 0.3% primarily due to a 3.4% decline in retail gasoline sales ($47,244 thousand). This was a result of a 6.9% decrease in the average retail price per gallon, even though the number of gallons sold increased by 3.7%. This revenue decline was partially offset by strong growth in grocery and general merchandise sales (up 5.7%) and prepared food and fountain sales (up 15.2%).

Net income slightly decreased by 0.9% to $39,031 thousand. The overall gross profit margin improved to 15.4% from 14.2% due to higher margins in grocery/merchandise and prepared foods. However, this was tempered by a lower gross profit margin on gasoline sales and a significant 10.5% increase in operating expenses, which were driven by having more stores in operation and expanded services like 24-hour operations and pizza delivery.

Casey's continues to invest in its store base. For the quarter, capital expenditures for property and equipment totaled $71,776 thousand, primarily for new store construction and remodels. This investment is part of the company's strategy to grow its store count by 4% to 6% annually and enhance operational efficiencies. These investments contributed to the increase in operating expenses.

As of July 31, 2012, Casey's had $89,636 thousand in cash and cash equivalents, an increase from the previous quarter. The company's current ratio stood at 0.92 to 1, indicating current liabilities slightly exceeded current assets. Long-term debt, net of current maturities, was $667,745 thousand. Management believes its cash flow from operations and existing credit line are sufficient to meet working capital needs.