10-QPeriod: Q2 FY2013

CASEYS GENERAL STORES INC Quarterly Report for Q2 Ended Oct 31, 2012

Filed December 10, 2012For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) filed its quarterly report on Form 10-Q for the period ending October 31, 2012. The company experienced revenue growth driven by increases in gasoline, grocery and merchandise, and prepared food and fountain sales. However, net income for the quarter and year-to-date declined compared to the prior year, primarily due to a significant decrease in gasoline gross profit margins and increased operating expenses. Despite the net income decline, the company continues to invest heavily in capital expenditures, particularly in new store constructions, replacements, and remodels, indicating a focus on long-term growth and operational efficiency. The balance sheet shows a notable increase in property and equipment, reflecting these investments. Management remains confident in the company's liquidity and its ability to fund future operations and growth through operating cash flow and existing credit facilities.

Financial Highlights

46 data points
Beta

Revenue

$1.91B

14.5% Gross Margin

Net Income

$31.15M

1.6% Net Margin

EPS (Diluted)

$0.81

Total Assets

$1.86B

Cash & Equivalents

$39.33M

Free Cash Flow

-$36.24M

Financial Statements
Beta
Revenue$1.91B
Cost of Revenue$1.63B
Gross Profit$276.46M
Operating Expenses$190.04M
Interest Expense$8.64M
Net Income$31.15M
EPS (Basic)$0.81
EPS (Diluted)$0.81
Shares Outstanding (Basic)38.30M
Shares Outstanding (Diluted)38.66M

Key Highlights

  • 1Total revenue increased by 7.2% for the three months ended October 31, 2012, compared to the prior year, driven by higher gasoline, grocery, and prepared food sales.
  • 2Net income for the three months ended October 31, 2012, decreased by 12.7% to $32.9 million, primarily due to a lower gasoline gross profit margin and increased operating expenses.
  • 3Operating expenses increased by 10.6% for the quarter, attributed to more stores operating 24 hours, increased pizza delivery, remodels, and a larger store count.
  • 4Capital expenditures were significant, with $163.4 million spent in the first six months of fiscal 2013, primarily on property and equipment for store construction and remodeling.
  • 5The company's inventory levels increased, with inventories rising from $170.8 million at April 30, 2012, to $178.3 million at October 31, 2012.
  • 6Long-term debt remained substantial at $660.1 million as of October 31, 2012.
  • 7The company settled a 'hot fuel' lawsuit with preliminary court approval, with the monetary impact not considered material.

Frequently Asked Questions

Revenue growth was primarily driven by increases in retail gasoline sales (up 8.1% in dollars due to higher prices and increased gallons sold), retail sales of grocery and general merchandise (up 1.4%), and prepared food and fountain sales (up 13.7%). Other revenue sources like lottery and newspaper commissions also saw increases.

Net income decreased due to a significant decline in the gross profit margin on retail gasoline sales (from 4.9% to 4.1% year-over-year) and an increase in operating expenses (up 10.6% year-over-year). Depreciation and amortization expenses also rose.

The company primarily funds its capital expenditures through cash generated from operations and its existing bank line of credit. Management anticipates these sources, along with potential additional long-term debt or other securities, will be sufficient to meet future capital needs.

The company received preliminary court approval for a settlement in the multidistrict 'Motor Fuel Temperature Sales Practices Litigation.' The settlement involves a commitment to display information on gasoline pumps and a monetary payment that is not considered material in amount.