CASEYS GENERAL STORES INC

Previous wording

As of July 31, 2024, Casey’s General Stores, Inc. and its direct and indirect wholly-owned subsidiaries operate convenience stores primarily under the names "Casey's" and "Casey’s General Store" (collectively, with the stores below referenced as "GoodStop", "Bucky's", "Minit Mart", or "Lone Star Food Store", referred to as "Casey's" or the "Company") throughout 17 states, over half of which are located in Iowa, Missouri and Illinois.

Current wording

As of October 31, 2024, Casey’s General Stores, Inc. and its direct and indirect wholly-owned subsidiaries operate convenience stores primarily under the names "Casey's" and "Casey’s General Store" (collectively, with the stores below referenced as "GoodStop", "Bucky's", "Minit Mart", or "Lone Star Food Store", referred to as "Casey's" or the "Company") throughout 17 states, over half of which are located in Iowa, Missouri and Illinois. Subsequent to quarter-end, on November 1, 2024, the Company closed on the acquisition of Fikes Wholesale and Group Petroleum Services (collectively "Fikes"), owner of CEFCO Convenience Stores, in which we added 198 total stores. The acquisition will bring 148 additional stores to Texas, as well as 50 stores in Alabama, Florida, and Mississippi.

Previous wording

Approximately 72% of all stores were opened in areas with populations of fewer than 20,000 persons. The Company competes on the basis of price, as well as on the basis of traditional features of convenience store operations such as location, extended hours, product offerings, and quality of service. As of July 31, 2024, there were a total of 2,674 stores in operation.

Current wording

Approximately 72% of all stores were opened in areas with populations of fewer than 20,000 persons. The Company competes on the basis of price, as well as on the basis of traditional features of convenience store operations such as location, extended hours, product offerings, and quality of service. As of October 31, 2024, there were a total of 2,685 stores in operation.

Previous wording

All convenience stores carry a broad selection of food items (including, but not limited to, freshly prepared foods such as regular and breakfast pizza, donuts, hot breakfast items, and hot and cold sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products, and other nonfood items. As of July 31, 2024, 233 store locations offered car washes. In addition, all but seven store locations offer fuel for sale on a self-service basis.

Current wording

All convenience stores carry a broad selection of food items (including, but not limited to, freshly prepared foods such as regular and breakfast pizza, donuts, hot breakfast items, and hot and cold sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products, and other nonfood items. As of October 31, 2024, 236 store locations offered car washes. In addition, all but six store locations offer fuel for sale on a self-service basis.

Previous wording

The Company had 67 stores operating under the "GoodStop (by Casey’s)" brand and 12 stores operating under the "Lone Star Food Store" brand as of July 31, 2024. Similar to most of our store footprint, the "GoodStop" and "Lone Star Food Store" locations offer fuel for sale on a self-serve basis, and a broad selection of snacks, beverages, tobacco products, and other essentials. However, some of these locations do not have a kitchen and have limited prepared food offerings.

Current wording

The Company had 64 stores operating under the "GoodStop (by Casey’s)" brand and 12 stores operating under the "Lone Star Food Store" brand as of October 31, 2024. Similar to most of our store footprint, the "GoodStop" and "Lone Star Food Store" locations offer fuel for sale on a self-serve basis, and a broad selection of snacks, beverages, tobacco products, and other essentials. However, some of these locations do not have a kitchen and have limited prepared food offerings.

Previous wording

The Company is also temporarily operating certain locations acquired from Buchanan Energy under the name "Bucky's" and certain locations acquired from Minit Mart LLC under the name "Minit Mart". The Company is in the process of transitioning all "Bucky's" and "Minit Mart" locations to either the "Casey's" or "GoodStop" brand. These locations typically have similar offerings to the "Casey’s" or "GoodStop" branded stores.

Current wording

The Company is also temporarily operating certain locations acquired from Buchanan Energy under the name "Bucky's". The Company is in the process of transitioning all "Bucky's" locations to either the "Casey's" or "GoodStop" brand. These locations typically have similar offerings to the "Casey’s" or "GoodStop" branded stores.

Previous wording

The Company has 71 dealer locations, where Casey’s manages fuel wholesale supply agreements to these stores. These locations are not operated by Casey's and are not included in our overall store count in the paragraph below. Approximately 1% of total revenue for the three-months ended July 31, 2024 relates to this dealer network.

Current wording

The Company has 71 dealer locations, where Casey’s manages fuel wholesale supply agreements to these stores. These locations are not operated by Casey's and are not included in our overall store count in the table below. Approximately 1% of total revenue for the six-months ended October 31, 2024 relates to this dealer network.

Previous wording

The Company reported diluted earnings per common share of $4.83 for the first quarter of fiscal 2025. For the same quarter a year-ago, diluted earnings per common share was $4.52.

Current wording

The Company reported diluted earnings per common share of $4.85 for the second quarter of fiscal 2025. For the same quarter a year-ago, diluted earnings per common share was $4.24.

Previous wording

The following table represents the roll forward of store growth through the first quarter of fiscal 2025:

Current wording

The following table represents the roll forward of store growth through the second quarter of fiscal 2025:

Previous wording

Since early calendar 2020, the price of crude oil, and in turn the wholesale cost of fuel, has been volatile compared to historical averages. Initially, at the outset of the COVID-19 pandemic, oil and fuel prices fell dramatically; however, as the economy in general began to emerge from the pandemic, prices began to modestly increase over time. Oil and fuel prices continued to be impacted throughout fiscal 2024 and the first quarter of fiscal 2025 as the result of geopolitical issues and supply disruptions.

Current wording

Since early calendar 2020, the price of crude oil, and in turn the wholesale cost of refined fuel products, has been volatile compared to historical averages. Initially, at the outset of the COVID-19 pandemic, oil and fuel prices fell dramatically; however, as the economy in general began to emerge from the pandemic, prices began to modestly increase over time. Oil and fuel prices continued to be impacted throughout fiscal 2024 and through the second quarter of fiscal 2025 as a result of geopolitical issues and localized supply disruptions.

Previous wording

In addition, during the past four calendar years, the Company, and the retail fuel industry, has experienced historically high average revenue less cost of goods sold per gallon (excluding depreciation and amortization). Although this has remained relatively consistent since that time, on a longer-term basis, this metric can fluctuate significantly, and sometimes unpredictably, in the short-term. While the Company believes that its average revenue less cost of goods sold per gallon (excluding depreciation and amortization) will remain elevated from historical levels for the foreseeable future, it is possible that increased oil and fuel prices, higher interest rates, macroeconomic conditions and/or continuing conflicts or disruptions involving oil producing countries may materially impact the performance of this metric.

Current wording

In addition, during the past four calendar years, the Company, and the retail fuel industry, has experienced historically high average revenue less cost of goods sold per gallon (excluding depreciation and amortization). Although this has remained relatively consistent since that time, this metric can fluctuate significantly, and sometimes unpredictably, in the short-term. While the Company believes that its average revenue less cost of goods sold per gallon (excluding depreciation and amortization) may remain elevated from historical levels for the foreseeable future, it is possible that increased oil and fuel prices, higher interest rates, macroeconomic conditions and/or continuing conflicts or disruptions involving oil producing countries may materially impact the performance of this metric.

Previous wording

Casey's continues its process of implementing an electric vehicle ("EV") strategy and our management team remains committed to understanding if and how the increased demand for, and usage of, EVs impacts consumer behavior across our store footprint and beyond. As consumer demand for alternative fuel options continues to grow, Casey’s has continued to add EV charging stations across our 17-state footprint. As of July 31, 2024, the Company has 178 charging stations at 41 stores, across 13 states. Our EV growth strategy is currently designed to selectively increase our charging stations at locations within our region where we see higher levels of consumer EV buying trends and demand for EV charging. To date, consumer EV demand within our Midwest footprint has been comparatively lower than the levels along the coasts. As EV demand from our guests increases, we are prepared to strategically integrate charging station options at select stores.

Current wording

Casey's continues its process of implementing an electric vehicle ("EV") strategy and our management team remains committed to understanding if and how the increased demand for, and usage of, EVs impacts consumer behavior across our store footprint and beyond. As consumer demand for alternative fuel options continues to grow, Casey’s has continued to add EV charging stations across our 17-state footprint. As of October 31, 2024, the Company has 178 charging stations at 41 stores, across 13 states. Our EV growth strategy is currently designed to selectively increase our charging stations at locations within our region where we see higher levels of consumer EV buying trends and demand for EV charging. To date, consumer EV demand within our Midwest footprint has been comparatively lower than the levels along the coasts. As EV demand from our guests increases, we are prepared to strategically integrate charging stations at select stores.

Previous wording

The first quarter results reflected a 0.7% increase in same-store fuel gallons sold. Same-store sales of grocery and general merchandise increased 1.6% and prepared food and dispensed beverage increased 4.4% during the quarter. The increase in grocery and general merchandise same-store sales was primarily due to sales of non-alcoholic and alcoholic beverages. The increase in prepared food and dispensed beverage same-store sales was attributable to strong sales of hot sandwiches and bakery.

Current wording

Same-store sales of prepared food and dispensed beverage increased 5.2% and grocery and general merchandise increased 3.6% during the quarter. The increase in prepared food and dispensed beverage same-store sales was attributable to strong sales of hot sandwiches and dispensed beverages. The increase in grocery and general merchandise same-store sales was primarily due to sales of non-alcoholic and alcoholic beverages. Additionally, the second quarter results reflected a 0.6% decrease in same-store fuel gallons sold.

Previous wording

Total revenue for the first quarter of fiscal 2025 increased by $228,486 (5.9%) over the comparable period in fiscal 2024. Prepared food and dispensed beverage revenue increased by $32,316 (8.7%), due to an increase in same-store sales of 4.4% driven by strong sales of hot sandwiches and bakery, as well as an increase of approximately 4.3% due to operating 138 more stores than a year ago. Grocery and general merchandise revenue increased by $72,042 (7.2%), due to an increase in same-store sales of 1.6% driven by sales of non-alcoholic and alcoholic beverages, as well as an increase of approximately 5.6% due to operating 138 more stores than a year ago. Retail fuel revenue increased by $128,309 (5.3%) due to an increase in the number of gallons sold by 58,545 (8.2%). This was partially offset by a decrease in the average retail price per gallon by 2.7%.

Current wording

Total revenue for the second quarter of fiscal 2025 decreased by $117,629 (2.9%) over the comparable period in fiscal 2024. Prepared food and dispensed beverage revenue increased by $35,346 (9.2%), due to an increase in same-store sales of 5.2% driven by strong sales of hot sandwiches and dispensed beverages, as well as an increase of approximately 4.0% due to operating 93 more stores than a year ago. Grocery and general merchandise revenue increased by $85,267 (8.8%), due to an increase in same-store sales of 3.6% driven by sales of non-alcoholic and alcoholic beverages, as well as an increase of approximately 5.2% due to operating 93 more stores than a year ago. Retail fuel revenue decreased by $231,846 (8.8%) due to a decrease in the average retail price per gallon of 14.1%. This was partially offset by an increase in the number of gallons sold of 45,475 (6.2%).

Previous wording

The other revenue category primarily consists of activity related to wholesale fuel revenue from the dealer network and car wash revenue, which are both presented gross of applicable costs, as well as lottery, which is presented net of applicable costs. Other revenue decreased $4,181 (5.8%) for the first quarter of fiscal 2025 compared to the prior year, driven primarily by a decrease in total revenue related to the dealer network.

Current wording

The other revenue category primarily consists of activity related to wholesale fuel revenue from the dealer network and car wash revenue, which are both presented gross of applicable costs, as well as lottery, which is presented net of applicable costs. Other revenue decreased $6,396 (9.0%) for the second quarter of fiscal 2025 compared to the prior year, driven primarily by a decrease in total revenue related to the dealer network.

Previous wording

Total revenue less cost of goods sold (excluding depreciation and amortization) was 23.3% of revenue for the first quarter of fiscal 2025, compared to 22.7% for the comparable period in the prior year. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) was relatively consistent at 58.3% of revenue, compared to 58.2% of revenue for the comparable period in the prior year. Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 35.4% of revenue for the first quarter of fiscal 2025, compared to 34.1% for the comparable period in the prior year, driven primarily by strong cost of goods management.

Current wording

Total revenue less cost of goods sold (excluding depreciation and amortization) was 24.3% of revenue for the second quarter of fiscal 2025, compared to 21.8% for the comparable period in the prior year. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) was relatively consistent at 58.7% of revenue, compared to 59.0% of revenue for the comparable period in the prior year. Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 35.6% of revenue for the second quarter of fiscal 2025, compared to 34.0% for the comparable period in the prior year, driven primarily by product mix.

Previous wording

Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was 12.3% of fuel revenue during the first quarter of fiscal 2025, compared to 12.2% for the comparable period in the prior year. Revenue per gallon less cost of goods sold (exclusive of depreciation and amortization) per gallon decreased to 40.7 cents in the first quarter of fiscal 2025, compared to 41.6 cents for the comparable period in the prior year. The Company sold 8.5 million RINs (renewable identification numbers) for $4,834 during the quarter, compared to the sale of 12.8 million RINs in the first quarter of the prior year, which generated $20,197 (see footnote 3, above, for a further description of RINs and how they are generated).

Current wording

Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was 12.9% of fuel revenue during the second quarter of fiscal 2025, compared to 11.7% for the comparable period in the prior year. Revenue per gallon less cost of goods sold (exclusive of depreciation and amortization) per gallon decreased to 40.2 cents in the second quarter of fiscal 2025, compared to 42.3 cents for the comparable period in the prior year. The Company sold 6.3 million RINs (renewable identification numbers) for $4,923 during the quarter, compared to the sale of 6.9 million RINs in the second quarter of the prior year, which generated $8,429 (see Note 3, above, for a further description of RINs and how they are generated).

Previous wording

Operating expenses increased $48,619 (8.7%) to $609,474 in the first quarter of fiscal 2025. Approximately 5% of the increase is due to operating 138 more stores than the comparable period in the prior year. The impact of one-time deal costs related to pending acquisitions was approximately 1% of the increase. Total same-store employee expense contributed to approximately 1% of the increase, as the increases in labor rates were partially offset by a reduction in same-store labor hours.

Current wording

Operating expenses increased $29,976 (5.2%) to $609,679 in the second quarter of fiscal 2025. Approximately 4% of the increase is due to operating 93 more stores than the comparable period in the prior year. Same-store employee expense contributed to approximately 1% of the increase, as the increases in labor rates were partially offset by a reduction in same-store labor hours.

Previous wording

Depreciation and amortization expense increased $11,504 (13.9%) to $94,409 in the first quarter of fiscal 2025, primarily due to operating 138 more stores than a year ago.

Current wording

Depreciation and amortization expense increased $10,994 (12.8%) to $96,592 in the second quarter of fiscal 2025, primarily due to operating 93 more stores than a year ago.

Previous wording

The effective tax rate increased to 24.1% in the first quarter of fiscal 2025 compared to 23.6% in the same period of fiscal 2024. The increase in the effective tax rate was primarily due to a one-time benefit in the prior year from adjusting the Company’s deferred tax assets and liabilities for state law changes enacted during the quarter.

Current wording

The effective tax rate increased to 24.5% in the second quarter of fiscal 2025 compared to 23.6% in the same period of fiscal 2024. The increase in the effective tax rate was primarily due to a one-time benefit in the prior year from adjusting the Company’s deferred tax assets and liabilities for state law changes enacted during the quarter.

Previous wording

Net income increased by $10,961 (6.5%) to $180,198 from $169,237 in the comparable period in the prior year. The increase in net income was primarily attributable tohigher profitability both inside the store and in fuel, partially offset by higher operating expenses and depreciation and amortization. See discussion in the paragraphs above for the primary drivers for each of these changes.

Current wording

Net income increased by $22,136 (13.9%) to $180,918 from $158,782 in the comparable period in the prior year. The increase in net income was primarily attributable tohigher profitability both inside the store and in fuel, partially offset by higher operating expenses and depreciation and amortization. See discussion in the paragraphs above for the primary drivers for each of these changes.

Previous wording

Interest, net increased $1,572 (12.6%) to $14,067 in the first quarter of fiscal 2025. The increase was primarily attributable to decrease in interest income due to the decrease in cash and cash equivalents from the same period in the prior year.

Current wording

Interest, net increased by $1,819 (7.3%) to $26,620 for the first six months of fiscal 2025 from $24,801. The increase was primarily attributable to decrease in interest income due to the decrease in average cash and cash equivalents from the same period in the prior year.

Previous wording

The following table contains a reconciliation of net income to EBITDA for the three months ended July 31, 2024 and 2023:

Current wording

The following table contains a reconciliation of net income to EBITDA for the three and six months ended October 31, 2024 and 2023:

Previous wording

For the three months ended July 31, 2024, EBITDA increased by 9.1% when compared to the same period a year ago. The increase was primarily attributable tohigher profitability both inside the store and in fuel, partially offset by higher operating expenses. See discussion in the preceding sections for the primary drivers for each of these individual changes.

Current wording

For the three and six months ended October 31, 2024, EBITDA increased by 14.1% and 11.5%, respectively, when compared to the same period a year ago. The increase was primarily attributable tohigher profitability both inside the store and in fuel, partially offset by higher operating expenses. See discussion in the preceding sections for the primary drivers for each of these individual changes.

Previous wording

Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company’s financial condition and results of operations. The Company's critical accounting policies are described in the Form 10-K for the year ended April 30, 2024, and such discussion is incorporated herein by reference. There have been no changes to these policies in the three months ended July 31, 2024.

Current wording

Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company’s financial condition and results of operations. The Company's critical accounting policies are described in the Form 10-K for the year ended April 30, 2024, and such discussion is incorporated herein by reference. There have been no changes to these policies in the six months ended October 31, 2024.

Previous wording

Due to the nature of the Company’s business, cash provided by operations is the Company’s primary source of liquidity. The Company finances its inventory purchases primarily from normal trade credit aided by the relatively rapid turnover of inventory. This turnover allows the Company to conduct its operations without large amounts of cash and working capital. As of July 31, 2024, the Company’s ratio of current assets to current liabilities was 0.84 to 1. The ratio at July 31, 2023 and April 30, 2024 was 1.09 to 1 and 0.87 to 1, respectively. The decrease in the ratio from July 31, 2023, is primarily attributable to a decrease in cash and cash equivalents as a result of increased acquisition related activity, as well as share repurchases during the prior fiscal year. The modest decrease in the current ratio from April 30, 2024 is primarily attributable to a $155,028 increase in current maturities of long-term debt and finance lease obligations associated with the reclassification of the $150,000 Series E notes from long-term debt and finance lease obligations to current maturities, as the full principal balance is coming due June 13, 2025. The increase in current liabilities was partially offset by an increase in cash and cash equivalents.

Current wording

Due to the nature of the Company’s business, cash provided by operations is the Company’s primary source of liquidity. The Company finances its inventory purchases primarily from normal trade credit aided by the relatively rapid turnover of inventory. This turnover allows the Company to conduct its operations without large amounts of cash and working capital. As of October 31, 2024, the Company’s ratio of current assets to current liabilities was 0.88 to 1. The ratio at October 31, 2023 and April 30, 2024 was 1.06 to 1 and 0.87 to 1, respectively. The decrease in the ratio from October 31, 2023, is primarily due to the timing of debt payments, with an increase in current maturities of long-term debt and finance lease obligations associated with the reclassification of the $150,000 Series E notes from long-term debt and finance lease obligations to current maturities, as the full principal balance is coming due June 13, 2025.

Previous wording

Net cash provided by operating activities was $281,354 for the three months ended July 31, 2024, compared to $229,131 for the comparable period in the prior year, an increase of $52,223. Our primary source of operating cash flows is from sales to guests at our stores. The primary uses of operating cash flows are payments to our team members and suppliers, as well as payments for taxes and interest. Cash flow from operations was favorably impacted by improved revenue less cost of goods sold (excluding depreciation and amortization) of $77,502, offset by an increase in operating expenses of $48,619. Refer to "Three Months Ended July 31, 2024 Compared to Three Months Ended July 31, 2023" starting on page 15 for further details on the primary drivers for the changes in revenue, cost of goods sold, and operating expenses. Cash flows from operations can also be impacted by variability in the timing of payments and receipts for certain assets and liabilities, such as wage related accruals, accounts payable, and receivables from credit card companies or our vendors. The increase in operating cash flows, compared to the prior year, was also favorably impacted by an increase in operating cash flows of $27,378 due to the timing of inventory purchases.

Current wording

Net cash provided by operating activities was $552,057 for the six months ended October 31, 2024, compared to $481,780 for the comparable period in the prior year, an increase of $70,277. Our primary source of operating cash flows is from sales to guests at our stores. The primary uses of operating cash flows are payments to our team members and suppliers, as well as payments for taxes and interest. Cash flow from operations was favorably impacted by improved revenue less cost of goods sold (excluding depreciation and amortization) of $150,500, offset by an increase in operating expenses of $78,595. Refer to "Six Months Ended October 31, 2024 Compared to Six Months Ended October 31, 2023" starting on page 16 for further details on the primary drivers for the changes in revenue, cost of goods sold, and operating expenses. Additionally, cash paid for income taxes increased by $46,470 from the prior year, driven primarily by the decrease in accelerated tax depreciation on acquisitions and capital expenditures during the 2025 fiscal year compared to the 2024 fiscal year. Cash flows from operations can also be impacted by variability in the timing of payments and receipts for certain assets and liabilities, such as wage related accruals, accounts payable, and receivables from credit card companies or our vendors. The increase in operating cash flows, compared to the prior year, was also favorably impacted by an increase in operating cash flows of $35,991 due to the timing of inventory purchases.

Previous wording

Cash used in investing activities increased $35,573. During the first three months of fiscal 2025, the Company expended $118,677 for purchases of property and equipment and payments for acquisitions compared to $82,200 for the comparable period in the prior year. Purchases of property and equipment and payments for acquisitions of businesses typically represent the single largest use of excess Company funds. Management believes that by acquiring, building, and reinvesting in stores, the Company will be better able to drive long-term shareholder value.

Current wording

Cash used in investing activities decreased $61,176. During the first six months of fiscal 2025, the Company expended $257,567 for purchases of property and equipment and payments for acquisitions compared to $315,314 for the comparable period in the prior year. The decrease in cash used in investing activities was largely attributable to a decrease in acquisition related activity compared to the prior year. Purchases of property and equipment and payments for acquisitions of businesses typically represent the single largest use of excess Company funds. Management believes that by acquiring, building, and reinvesting in stores, the Company will be better able to drive long-term shareholder value.