Casey's Announces Fourth Quarter Results

Casey’s General Stores, Inc., ("Casey's" or the "Company") (Nasdaq symbol CASY) one of the leading convenience store chains in the United States, today announced financial results for the three months and year ended April 30, 2022.

Fourth Quarter 2022 Key Highlights

• Diluted EPS of $1.60, up 43% from the same period a year ago.
• Inside same-store sales up 5.2% with an inside margin of 39.4%.
• Fuel same-store gallons sold up 1.5% with a fuel margin of 36.2 cents per gallon.
• Casey's increased the quarterly dividend 9% to $0.38 per share, marking the 23rd consecutive annual increase.

Fiscal Year 2022 Key Highlights

• Diluted EPS of $9.10, an all-time high.
• Casey's Rewards members of approximately 5 million at year-end, adding over 1.3 million in the fiscal year.
• Total store growth of 228 stores, including 207 acquired locations, marking the largest unit growth year in the Company's history.
• Strong performance led the Company to prepay $168 million in variable rate debt.

“Casey's delivered another record fiscal year to its shareholders with inside sales up 6.6%," said Darren Rebelez, President and CEO. “Inside same-store sales were driven by strong prepared food and dispensed beverages, most notably pizza slices and our new breakfast offering. Private label's tremendous progress resulted in exiting the quarter at 5% sales penetration of the grocery and general merchandise category. Despite all-time high fuel costs and challenging macro-economic conditions, fuel volume and margins remained strong. We had the most acquisitive year in our Company's history, finishing the year with 2,452 stores. Thanks to the hard work and commitment of the Casey's team, we are well positioned to deliver on our long-term strategic plan commitments in fiscal 2023.”

Earnings

Fourth quarter net income, Diluted EPS, and Adjusted EBITDA (reconciled later in the document) were up compared to the same period a year ago due to higher profitability both inside the store and in fuel, partially offset by higher operating expenses. Net income and Diluted EPS were also positively affected by a lower tax rate, and negatively affected by higher interest expense and higher depreciation expense.

Inside

Total inside sales were up 14% for the quarter and total inside gross profit was up 12%. Inside same-store sales were driven by strong sales in pizza slices and breakfast sandwiches, along with non-alcoholic and alcoholic beverages. Inside margin was down 50 basis points for the quarter primarily due to inflationary pressures in the prepared food and dispensed beverage category, partially offset by pricing actions and an increase in single-serve and smaller package sized non-alcoholic and alcoholic beverages in the grocery and general merchandise category.

Fuel1

1 Fuel category does not include wholesale fuel activity, which is included in Other.

Same-store gallons sold were up 1.5% for the quarter, and up 8% on a two-year stacked basis. Fuel gross profit was up 27% due to an increase of 3.2 cents per gallon in fuel margin coupled with a 16% increase in total fuel gallons sold, despite a significant increase in fuel cost experienced at the end of the quarter. The Company sold $1.1 million in renewable fuel credits (RINs) in the fourth quarter, while no RINs were sold in the same period last year.

Operating Expenses

Operating expenses increased 15.2% for the fourth quarter. Approximately 9% of the increase is due to operating 209 more stores than a year ago. Additionally, approximately 4% was related to same-store employee expense. Finally, approximately 2% of the change was related to same-store credit card fees due to the higher price of retail fuel.

Expansion

Liquidity

At April 30, the Company had approximately $634 million in available liquidity, consisting of approximately $159 million in cash and cash equivalents on hand and $475 million in undrawn borrowing capacity on existing lines of credit. The Company prepaid variable rate debt by approximately $168 million in the quarter.

Share Repurchase

The Company has $400 million remaining under its existing share repurchase authorization. There were no repurchases made against that authorization in the fourth quarter.

Dividend

At its June meeting, the Board of Directors voted to increase the quarterly dividend by 9% to $0.38 per share, which is the 23rd consecutive year increasing the dividend. The dividend is payable August 15, 2022 to shareholders of record on August 1, 2022.

Fiscal 2023 Outlook

Casey's expects the following performance during fiscal 2023. The Company expects same-store inside sales to increase 4% to 6% and maintain an inside margin of approximately 40%. The Company expects same-store fuel gallons to be flat to 2% higher. Total operating expenses are expected to increase approximately 9% to 10%. The Company expects to add approximately 80 stores in fiscal 2023, and expects to exceed our stated three year commitment of 345 units. Interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $320 million and the purchase of property plant and equipment is expected to be approximately $450 to $500 million, including approximately $135 million in one-time store remodel costs for recently acquired stores. The tax rate is expected to be approximately 24% to 26% for the year.

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets as well as impairment charges. Neither EBITDA nor Adjusted EBITDA are considered GAAP measures, and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by the Company for internal purposes including our capital budgeting process, evaluating acquisition targets, assessing performance, and awarding incentive compensation.

Because non-GAAP financial measures are not standardized, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the three and twelve months ended April 30, 2022 and 2021:

NOTES:

• Gross Profit or Margin is defined as revenue less cost of goods sold (exclusive of depreciation and amortization)
• Inside is defined as the combination of Grocery and General Merchandise and Prepared Food and Dispensed Beverage

This release contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and related sources or needs, business and/or integration strategies, plans and synergies, supply chain, growth opportunities, performance at our stores. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any results expressed or implied by these forward-looking statements, including but not limited to the execution of our strategic plan, the integration and financial performance of acquired stores, wholesale fuel, inventory and ingredient costs, distribution challenges and disruptions, the impact and duration of COVID-19 and related governmental actions, the impact and duration of the conflict in Ukraine or other geopolitical disruptions, as well as other risks, uncertainties and factors which are described in the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission and available on our website. Any forward-looking statements contained in this release represent our current views as of the date of this release with respect to future events, and Casey’s disclaims any intention or obligation to update or revise any forward-looking statements in the release whether as a result of new information, future events, or otherwise.

Corporate information is available at this website: https://www.caseys.com. Earnings will be reported during a conference call on June 8, 2022. The call will be broadcast live over the Internet at 7:30 a.m. CDT. To access the call, go to the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx. No access code is required. A webcast replay of the call will remain available in an archived format on the Events and Presentations section of our website at https://investor.caseys.com/events-and-presentations/default.aspx for one year after the call.

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