SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Quarter Ended OctoberJanuary 31, 19992000
Commission File Number 0-12788
CASEY'S GENERAL STORES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0935283
(StateState or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ONE CONVENIENCE BOULEVARD, ANKENY, IOWA
(Address of principal executive offices)
50021
(Zip Code)
(515) 965-6100
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO ------------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, No Par Value 52,739,46250,374,862 shares
(Class) (Outstanding at December 1, 1999)March 8, 2000)
CASEY'S GENERAL STORES, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated condensed balance sheets -
OctoberJanuary 31, 19992000 and April 30, 1999 23
Consolidated condensed statements
of income - three and sixnine months ended
OctoberJanuary 31, 2000 and 1999 and 1998 45
Consolidated condensed statements of
cash flows - sixnine months ended
OctoberJanuary 31, 2000 and 1999 and 1998 56
Notes to consolidated condensed
financial statements 68
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 79
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 12
Item 4. Submission of Matters to a Vote of
Security Holders. 1314
Item 5. Other Information 13Information. 14
Item 6. Exhibits and Reports on Form 8-K. 14
SIGNATURE 1617
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
OctoberJanuary 31,
19992000 April 30,
(Unaudited) 1999
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 13,50818,097 5,935
Short-term investments 9,64812,557 8,800
Receivables 3,6663,684 2,822
Inventories 51,96154,337 47,204
Prepaid expenses 5,5886,675 5,446
------- ------
Total current assets 84,37195,350 70,207
------- ------
Long-term investments 5,004--- 6,640
Other assets 1,4361,419 1,469
Property and equipment, net of
accumulated depreciation
OctoberJanuary 31, 1999, $229,1312000, $238,458
April 30, 1999, $212,383 519,147538,448 484,544
------- -------
$609,958$635,217 562,860
------- -------
See notes to consolidated condensed financial statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Continued)
(Dollars in Thousands)
OctoberJanuary 31,
19992000 April 30,
(Unaudited) 1999
---------- ----------------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 15,50060,000 7,400
Current maturities of
long-term debt 9,2939,250 9,352
Accounts payable 54,33550,093 44,227
Accrued expenses 19,61821,306 20,383
Income taxes payable 5,135--- 2,457
------ ------------- -------
Total current liabilities 103,881140,649 83,819
------- -------------
Long-term debt, net of
current maturities 119,731114,652 122,513
------- -------
Deferred income taxes 55,15056,900 51,650
------- -------
Deferred compensation 3,3083,457 3,010
------- -------
Shareholders' equity
Preferred stock, no par value --- ---
Common Stock, no par value 67,62654,879 67,338
Retained earnings 260,262264,680 234,530
------- -------
Total shareholders' equity 327,888319,559 301,868
------- -------
$609,958$635,217 562,860
------- -------
See notes to consolidated condensed financial statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands, except per share amounts)Thousands)
Three Months Ended SixNine Months Ended
OctoberJanuary 31, OctoberJanuary 31,
2000 1999 19982000 1999 1998
---- ---- ---- ----
Net sales $412,752 322,370 799,946 654,816$402,029 291,561 1,201,975 946,377
Franchise revenue 1,431 1,395 2,945 2,8791,223 1,488 4,168 4,367
------- ------- --------- -------
403,252 293,049 1,206,143 950,744
------- ------- 414,183 323,765 802,891 657,695
------- ------- ---------------- -------
Cost of goods sold 327,769 245,411 630,471 503,859326,806 218,934 957,277 722,793
Operating expenses 54,857 48,141 106,437 93,84256,058 49,346 162,495 143,188
Depreciation and
amortization 9,406 8,445 18,501 16,5179,724 8,671 28,225 25,188
Interest, net 1,988 1,565 3,990 3,2792,370 1,865 6,360 5,144
------- ------- --------- -------
394,958 278,816 1,154,357 896,313
------- ------- 394,020 303,562 759,399 617,497--------- -------
------- ------- -------
20,163 20,203 43,492 40,198Income before
income taxes 8,294 14,233 51,786 54,431
Federal and state
income taxes 7,501 7,576 16,179 15,0743,085 5,337 19,264 20,411
------- ------- ---------------- -------
Net income $ 12,662 12,627 27,313 25,124
--------5,209 8,896 32,522 34,020
------- ------- --------- -------
Earnings per common share
Basic $ .24 .24 .52 .48
--------.10 .17 .62 .65
------- ------- --------- -------
Diluted $ .24 .24 .52 .48
--------.10 .17 .62 .64
------- ------- --------- -------
See notes to consolidated condensed financial statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
SixNine Months Ended
OctoberJanuary 31,
2000 1999
1998---- ----
Cash flows from operations:
Net income $ 27,313 25,12432,522 34,020
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation and amortization 18,501 16,51728,225 25,188
Deferred income taxes 3,500 3,0005,250 4,500
Changes in assets and liabilities:
Receivables (844) (714)(862) (168)
Inventories (4,757) (3,318)(7,133) (4,596)
Prepaid expenses (142) (296)(1,229) (256)
Accounts payable 10,108 3,9235,866 (1,618)
Accrued expenses (765) 1,062923 2,357
Income taxes payable 2,678 573(2,457) 1,801
Other, net 1,511 8001,889 2,032
----- ------ -------
Net cash provided by operations 57,103 46,67162,994 63,260
------ ------
Cash flows from investing:
Purchase of property and equipment (54,332) (55,368)(83,486) (75,234)
Purchase of investments (2,747) (1,295)
Sale of investments 3,583 1,7625,596 4,552
------ -------------
Net cash used in investing activities (53,496) (54,901)(80,637) (71,977)
------ ------
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
(continued)
Nine Months Ended
January 31,
2000 1999
---- ----
Cash flows from financing:
Payments onof long-term debt (2,841) (2,844)(7,963) (4,325)
Net activity of short-term debt 8,100 18,45052,600 21,060
Repurchase of Common Stock (12,806) ---
Proceeds from exercise of stock
options 288 878
Payment347 992
Payments of cash dividends (1,581) (1,578)
-------(2,373) (2,369)
------ ------
Net cash provided by
financing activities 3,966 14,90629,805 15,358
------ ------
Net increase in cash
and cash equivalents 7,573 6,67612,162 6,641
Cash and cash equivalents at
beginning of the periodyear 5,935 4,022
----- ----------- ------
Cash and cash equivalents at
end of the period $ 13,508 10,698
-------quarter $18,097 10,663
------ ------
See notes to consolidated condensed financial statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
1. The accompanying consolidated condensed financial statements include the
accounts and transactions of the Company and its wholly-owned subsidiaries. All
material inter-company balances and transactions have been eliminated in
consolidation.
2. The accompanying consolidated condensed financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
interim consolidated condensed financial statements be read in conjunction with
the Company's most recent audited financial statements and notes thereto. In the
opinion of management, the accompanying consolidated condensed financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of OctoberJanuary 31,
1999,2000, and the results of operations for the sixthree and threenine months ended OctoberJanuary
31, 19992000 and 1998,1999, and changes in cash flows for the sixnine months ended OctoberJanuary
31, 19992000 and 1998.1999.
3. The Company's financial condition and results of operations are affected
by a variety of factors and business influences, certain of which are described
in the Cautionary Statement Relating to Forward-Looking Statements filed as
Exhibit 99 to the Quarterly Report on Form 10-Q for the fiscal quarter ended
January 31, 1997. These interim consolidated condensed financial statements
should be read in conjunction with that Cautionary Statement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Financial Condition and Results of Operations (Dollars in Thousands)
Casey's derives its revenue from the retail sale of food (including freshly
prepared foods such as pizza, donuts and sandwiches), beverages and non-food
products such as health and beauty aids, tobacco products, automotive products
and gasoline by Company stores and from the wholesale sale of certain grocery
and general merchandise items and gasoline to franchised stores. The Company
also generates revenues from continuing monthly royalties based on sales by
franchised stores, sign and facade rental fees and the provision of certain
maintenance, transportation and construction services to the Company's
franchisees. A typical store is generally not profitable for its first year of
operation due to start-up costs and will usually attain representative levels of
sales and profits during its second or third year of operation.
Due to the nature of the Company's business, most sales are for cash, and
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 OctoberJanuary 31, 1999,2000, the Company's ratio of current assets to
current liabilities was .81.68 to 1. The ratio at OctoberJanuary 31, 19981999 and April 30,
1999 was .56.55 to 1 and .84 to 1, respectively. Management believes that the
Company's current bank lines of credit, together with cash flow from operations,
will be sufficient to satisfy the working capital needs of its business.
Net cash provided by operations increased $10,432 (22.4%decreased $266 (0.4%) in the sixnine months
ended OctoberJanuary 31, 19992000 from the comparable period in the prior year, primarily
as a result of a largesmaller net income and an increase in inventories being offset
by an increase in depreciation and an increase in accounts payable. Cash flows
from investing in the sixnine months ended OctoberJanuary 31, 1999 remained fairly constant. Cash flows
from financing2000 decreased, primarily as
a result of a smallerincreased capital expenditures. Cash flows from financing increased
primarily due to an increase in short-term debt.short- term debt, net of the repurchase of the
Company's Common Stock. Cash flows used in investing activities isin the future
are expected to increasedecrease as a result of the anticipated growth in capital
expenditures.
Capital expenditures represent the single largest use of Company funds.
Management believes that by reinvesting in Company stores, the Company will be
better able to respond to competitive challenges and increase operating
efficiencies. During the
first sixnine months of fiscal 2000, the Company expended $54,332$83,486 for property and
equipment, primarily for the construction and remodeling of Company stores,
compared to $55,368$75,234 for the comparable period in the prior year. The Company
anticipates expending approximately $105,000$95,000 in fiscal 2000 for construction,
acquisition and remodeling of Company stores, primarily from funds generated by
operations, existing cash and short- term investments.short-term investments and bank lines of credit.
As of OctoberJanuary 31, 1999,2000, the Company had long-term debt of $119,731,$114,652,
consisting of $12,750$12,000 in principal amount of 7.70% Senior Notes , $30,000 in
principal amount of 7.38% Senior Notes, $14,400$10,800 in principal amount of 6.55%
Senior Notes, $50,000 in principal amount of Senior Notes, Series A through
Series F, with interest rates ranging from 6.18% to 7.23%, $8,143$7,718 of mortgage
notes payable, and $4,438$4,134 of capital lease obligations.
Interest on the 7.70% Senior Notes is payable on the 15th day of each month at the
rate of 7.70% per annum. Principal of the 7.70% Senior Notes matures in forty quarterly
installments beginning March 15, 1995. The Company may prepay the 7.70% Senior Notes in
whole or in part at any time in an amount of not less than $1,000 or integral
multiples of $100 in excess thereof at a redemption price calculated in
accordance with the Note Agreement dated as of February 1, 1993 between the
Company and the purchasers of the 7.70% Senior Notes.
Interest on the 7.38% Senior Notes is payable semi-annually on the 28thtwenty-eighth
day of June and December in each year, commencing June 28, 1996, and at
maturity, at the rate of 7.38% per annum. The 7.38% Senior Notes mature on December 28,
2020, with prepayments of principal commencing December 28, 2010 and ending June
28, 2020, inclusive, with the remaining principal payable at maturity on
December 28, 2020. The Company may prepay the 7.38% Senior Notes in whole or in part at
any time in an amount of not less than $1,000 or in integral multiples of $100
in excess thereof at a redemption price calculated in accordance with the Note
Agreement dated as of December 1, 1995 between the Company and Principal Mutual
Life Insurance Company, as the purchaser of
the 7.38% Senior Notes.
Interest on the 6.55% Senior Notes is payable quarterly on the 18th day of March,
June, September and December of each year, commencing March 18, 1998, and at
maturity, at the rate of 6.55% per annum. Principal of the 6.55% Senior Notes matures
in five annual installments commencing December 18, 1999. The Company may prepay
the 6.55% Senior Notes in whole or in part at any time in an amount of not less than
$1,000 or integral multiples of $100 in excess thereof at a redemption price
calculated in accordance with the Note Agreement dated as of December 1, 1997
between the Company and the Purchasers of the 6.55% Senior Notes.
Interest on the 6.18% to 7.23% Senior Notes, Series A through Series F, is
payable on the 23rd day of each April and October. Principal of the 6.18% to
7.23% Senior Notes, Series A through Series F, matures in various installments
beginning April 23, 2004. The Company may prepay the 6.18% to 7.23% Senior
Notes, Series A through Series F, in whole or in part at any time in an amount
of not less than $1,000 or integral multiples of $100 in excess thereof at a
redemption price calculated in accordance with the Note Agreement dated as of
April 15, 1999 between the Company and the purchasers of the 6.18% to 7.23%
Senior Notes, Series A through Series F.
To date, the Company has funded capital expenditures primarily from the
proceeds of the sale of Common Stock, issuance of the 6-1/4% Convertible
Subordinated Debentures (which were converted into shares of Common Stock in
1994), the above-described Senior Notes, a mortgage note, and through funds
generated from operations. Future capital needs required to finance operations,
improvements and the anticipated growth in the number of Company stores are
expected to be met from cash generated by operations, existing cash, investments
and additional long-term debt or other securities as circumstances may dictate,
and are not expected to adversely affect liquidity.
The United States Environmental Protection Agency and several states,
including Iowa, have established requirements for owners and operators of
underground gasoline storage tanks (USTs) with regard to (i) maintenance of leak
detection, corrosion protection and overfill/spill protection systems; (ii)
upgrade of existing tanks; (iii) actions required in the event of a detected
leak; (iv) prevention of leakage through tank closings; and (v) required
gasoline inventory recordkeeping. Since 1984, new Company stores have been
equipped with non-corroding fiberglass USTs, including many with double- wall
construction, over-fill protection and electronic tank monitoring, and the
Company has an active inspection and renovation program with respect to its
older USTs. The Company currently has 2,2142,275 USTs, of which 1,9041,956 are fiberglass
and 310319 are steel. Management ofbelieves that its existing gasoline procedures and
planned capital expenditures will continue to keep the Company currently believes that
substantiallyin substantial
compliance with all capital expenditures for electronic monitoring, cathodic
protectioncurrent federal and overfill/spill protection to comply with the existingstate UST regulations has been completed. Additional regulations, or amendments to the
existing UST regulations, could result in future expenditures.regulations.
Several of the states in which the Company does business have trust fund
programs with provisions for sharing or reimbursing corrective action or
remediation costs incurred by UST owners, including the Company. The extent of
available coverage or reimbursement under such programs for costs incurred by
the Company is not fully known at this time. In each of the years ended April
30, 1999 and 1998, the Company
spent approximately $516 and $502, respectively, for assessments and
remediation. During the sixnine months ended OctoberJanuary 31, 1999,2000, the Company expended
approximately $232$359 for such purposes. Substantially all of these expenditures
have been submitted for reimbursement from state-sponsored trust fund programs
and as of OctoberJanuary 31, 1999,2000, approximately $4,600 has been received from such
programs since their inception.programs. Such amounts are typically subject to statutory provisions requiring
repayment of the reimbursed funds for noncompliancenon- compliance with upgrade provisions or
other applicable laws. The Company has accrued a liability at OctoberJanuary 31, 19992000
of approximately $500 for estimated expenses related to anticipated corrective
actions or remediation efforts, including relevant legal and consulting costs.
Management believes the Company has no material joint and several environmental
liability with other parties.
THREE MONTHS ENDED OCTOBERJANUARY 31, 19992000 COMPARED TO THREE
MONTHS ENDED OCTOBERJANUARY 31, 19981999 (DOLLARS AND AMOUNTS IN THOUSANDS)
Net sales for the secondthird quarter of fiscal 2000 increased by $90,382 (28%$110,468
(37.9%) over the comparable period in fiscal 1999. Retail gasoline sales
increased by $86,446 (28.7%$80,175 (52.9%) as the number of gallons sold increased by 21,417 (12.2%24,244
(14.2%) while the average retail price per gallon increased 19.1%11.3%. During this
same period, retail sales of grocery and general merchandise increased by
$29,123 (22.3%$26,262 (21.8%) due to the addition of 8295 new Company Stores and a greater
number of stores in operation for at least three years.
Cost of goods sold as a percentage of net sales was 79.4%81.3% for the secondthird
quarter of fiscal 2000, compared to 76.1%75.1% for the comparable period in the prior
year. The gross profit margins on retail gasoline sales decreased (8.6%(to 7.2%)
during the secondthird quarter of fiscal 2000 from the secondthird quarter of the prior year
(11.5%) due to the increase in wholesale gasoline costs during the quarter. The
gross profit margin per gallon also decreased (to $.0992) in the second quarter
of fiscal 2000 from the comparable period in the prior year ($.1118). The gross
profits on retail sales of grocery and general merchandise also decreased (to
38.5%) from the comparable period in the prior year (41.3%), primarily due to
the increase in the wholesale cigarette costs and the more competitive retail
environment for cigarette sales.
Operating expenses as a percentage of net sales were 13.3% for the second
quarter of fiscal 2000 compared to 14.9% for the comparable period in the prior
year. The decrease in operating expenses as a percentage of net sales was caused
by an increase in the average retail price per gallon of gasoline sold (19.1%).
Net income increased by $35 (0.3%). The increase in net income was
attributable
primarily to the increase in retail sales of grocery and general merchandise, an
increase in the number of gallons of gasoline sold and an increased number of
stores in operation for at least three years. However, these increases were
substantially offset by the decreases in gross profit margins.
SIX MONTHS ENDED OCTOBER 31, 1999 COMPARED TO SIX
MONTHS ENDED OCTOBER 31, 1998 (DOLLARS AND AMOUNTS IN THOUSANDS)
Net sales for the first six months of fiscal 2000 increased by $145,130
(22.2%) over the comparable period in fiscal 1999. Retail gasoline sales
increased by $85,384 (24.4%) as the number of gallons sold increased by 40,954
(11.6%) and the average retail price per gallon increased 11.5%. During this
same period, retail sales of grocery and general merchandise increased by
$52,262 (19.8%) due to the addition of 82 new Company stores and a greater
number of stores in operation for at least three years.
Cost of goods sold as a percentage of net sales was 78.8% for the first six
months of fiscal 2000 compared to 76.9% for the comparable period in the prior
year. This result occurred because the gross profit margins on retail gasoline
sales decreased (8.9%) during the first six months of fiscal 2000 from the
comparable period in the prior year (10.8%(12.5%) due to the increase in wholesale gasoline costs during the period. The
gross profit margin per gallon also decreased (to $.0861) in the first six monthsthird quarter
of fiscal 2000 (to $.0989) from the comparable period in the prior year ($.1072).1112). The gross
profits on retail sales of grocery and general merchandise also decreased (to
38.8%37.2%) from the comparable period in the prior year (40.6%(42.0%), primarily due to
the increase in the wholesale cigarette costs and the more competitive retail environment for cigarette sales.costs.
Operating expenses as a percentage of net sales were 13.3%13.9% for the first
six monthsthird
quarter of fiscal 2000 compared to 14.3% during16.9% for the comparable period in the prior
year. The decrease in operating expenses as a percentage of net sales was caused
primarily by an increase in the average retail price per gallon of gasoline
sold (11.5%).sold.
Net income increaseddecreased by $2,189 (8.7%$3,687 (41.4%). The decrease in net income
wasattributable primarily to the decrease in the gross profit margins on retail
gasoline sales and the decrease in the gross profit margins on retail sales of
grocery and general merchandise.
NINE MONTHS ENDED JANUARY 31, 2000 COMPARED TO NINE
MONTHS ENDED JANUARY 31, 1999 (DOLLARS AND AMOUNTS IN THOUSANDS)
Net sales for the first nine months of fiscal 2000 increased by $255,598
(27%) over the comparable period in fiscal 1999. Retail gasoline sales increased
by $165,559 (33.1%) as the number of gallons sold increased by 65,198 (12.5%)
and the average retail price per gallon increased 18.3%. During this same
period, retail sales of grocery and general merchandise increased by $78,524
(20.4%) due to the addition of 95 new Company stores and a greater number of
stores in operation for at least three years.
Cost of goods sold as a percentage of net sales was 79.6% for the first
nine months of fiscal 2000 compared to 76.4% for the comparable period in the
prior year. This result occurred because the gross profit margins on retail
gasoline sales decreased (to 8.3%) during the first nine months of fiscal 2000
from the comparable period in the prior year (11.3%) due to the increase in
wholesale gasoline costs during the period. The gross profit margin per gallon
also decreased in the first nine months of fiscal 2000 (to $.0946) from the
comparable period in the prior year ($.1085). The gross profits on retail sales
of grocery and general merchandise also decreased (to 38.3%) from the comparable
period in the prior year (41%), primarily due to the increase in wholesale
cigarette costs.
Operating expenses as a percentage of net sales were 13.5% for the first
nine months of fiscal 2000 compared to 15.1% for the comparable period in the
prior year. The decrease in operating expenses as a percentage of net sales was
caused primarily by an increase in the average retail price per gallon of
gasoline sold.
Net income decreased by $1,498 (4.4%). The decrease in net income was
attributable primarily to the increasedecrease in the gross profit margins on retail
gasoline sales and the decrease in the gross profit margins on retail sales of
grocery and general merchandise, an increase in the number of gallons of gasoline sold, and an
increased number of stores in operation at least three years. However, these
increases were partially offset by the decreases in gross profit margins.
YEAR 2000
Management has substantially completed its "Year 2000" efforts to prepare
the Company's information technology systems (including hardware, software and
application programs) for year 2000 compliance. The Company expects to see
little direct impact on its operations given the nature of the business and the
Company's business relationships, the corrective steps taken to date and the
contingency plans put in place throughout 1999. All necessary expenditures,
which are not expected to be material (including internal staff and consulting
costs), will be funded through operating cash flow. The Company also is
continuing to analyze and work cooperatively with third parties having systems
upon which the Company must rely, and developing contingency plans with respect
thereto, but cannot give any assurances that the systems of such other parties
will be year 2000 compliant on a timely basis. Systems operated by others which
the Company would use and/or rely upon include those of banking institutions and
telephone companies, as well as vendor and franchisee workstations and product
ordering systems. The Company's business and financial condition and/or results
of operations could be materially adversely affected by the failure of its
systems and applications or those operated by such other third parties.merchandise.
CAUTIONARY STATEMENT
The foregoing Management's Discussion and Analysis of Financial Condition
and Results of Operations contains various "forward-looking statements" within
the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements
represent the Company's expectations or beliefs concerning future events,
including (i) any statements regarding future sales and gross profit
percentages, (ii) any statements regarding the continuation of historical trends
and (iii) any statements regarding the sufficiency of the Company's cash
balances and cash generated from operations and financing activities for the
Company's future liquidity and capital resource needs. The Company cautions that
these statements are further qualified by important factors that could cause
actual results to differ materially from those in the forward-looking
statements, including, without limitations, the factors described in the
Cautionary Statement Relating to Forward-Looking Statements included as Exhibit
99 to the Form 10-Q for the fiscal quarter ended January 31, 1997.
PART II - OTHER INFORMATION
ITEMItem 1. LEGAL PROCEEDINGS.
The Company from time to time is a party to legal proceedings arising from
the conduct of its business operations, including proceedings relating to
personal injury and employment claims, environmental remediation activities or
contamination,contamination-related claims, disputes under franchise agreements and claims by
state and federal regulatory authorities relating to the sale of products
pursuant to state or federal licenses or permits. Management does not believe
that the potential liability of the Company with respect to such other proceedings
pending as of the date of this Form 10-Q is material in the aggregate.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
At the Annual Meeting of shareholders held on September 17, 1999, seven
directors were elected for a term of one year. Each of the nominees so elected
previously has served as a director of the Company.
The votes cast or withheld for each nominee were as follows:
Number of Shares
Number of Shares That Withheld
Name Voting For Authority
---- ---------------- -------------
Donald F. Lamberti 46,187,580 943,156
John R. Fitzgibbon 46,478,433 652,303
Ronald M. Lamb 46,192,926 937,810
Patricia Clare Sullivan 46,456,756 673,980
John G. Harmon 46,185,872 944,864
Kenneth H. Haynie 46,161,203 969,533
John P. Taylor 46,495,129 635,607
ITEMItem 5. OTHER INFORMATION.
On November 30, 1999, the Board of Directors of the Company approved a $30
million open-market share repurchase program to acquire shares of the Company's
Common Stock. The share repurchases will be made
from time to time over the next six months in compliance with SEC Rule 10b-18.
The program may be suspended at the Company's discretion and is not in response
to any other offer for the Company's shares. As of December 13, 1999,March 7, 2000, the Company had repurchased 945,0002,910,100 shares
of Common Stock at an average price of $10.42$9.18 per share.
ITEMshare under the repurchase
program.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed with this Report or, if so indicated,
incorporated by reference:
Exhibit
No. Description
------- -------------------- ---------------
4.2 Rights Agreement dated as of June 14, 1989
between Casey's General Stores, Inc. and
United Missouri Bank of Kansas City, N.A.,
as Rights Agent(a) and amendments thereto (b),(c),(d),(i),(j)
4.3 Note Agreement dated as of February 1, 1993
between Casey's General Stores, Inc. and
Principal Mutual Life Insurance Company and
Nippon Life Insurance Company of America (e)
and First Amendment thereto (f)
4.4 Note Agreement dated as of December 1, 1995
between Casey's General Stores, Inc. and
Principal Mutual Life Insurance Company (f)
4.5 Note Agreement dated as of December 1, 1997
among the Company and Principal Mutual Life
Insurance Company, Nippon Life Insurance
Company of America and TMG Life Insurance
Company (g)
4.6 Note Agreement dated as of April 15, 1999 among
Casey's General Stores, Inc. and other
purchasers of the 6.18% to 7.23% Senior Notes,
Series A through F (i)
11 Statement regarding computation of per share
earnings
27 Financial Data Schedule
99 Cautionary Statement Relating to Forward-Looking
Statements (h)
- ------------------------------
(a) Incorporated by reference from the Registration Statement on Form 8-A
(0- 12788)(0-12788) filed June 19, 1989 relating to Common Share Purchase Rights.
(b) Incorporated by reference from the Form 8 (Amendment No. 1 to the
Registration Statement on Form 8-A filed June 19, 1989) filed September 10,
1990.
(c) Incorporated by reference from the Form 8-A/A (Amendment No. 3 to the
Registration Statement on Form 8-A filed June 19, 1989) filed March 30, 1994.
(d) Incorporated by reference from the Form 8-A12G/A (Amendment No. 2 to
the Registration Statement on Form 8-A filed June 19, 1989) filed July 29, 1994.
(e) Incorporated by reference from the Current Report on Form 8-K filed
February 18, 1993.
(f) Incorporated by reference from the Current Report on Form 8-K filed
January 11, 1996.
(g) Incorporated by reference from the Current Report on Form 8-K filed
January 7, 1998.
(h) Incorporated by reference from the Quarterly Report on Form 10-Q for
the fiscal quarter ended January 31, 1997.
(i) Incorporated by reference from the Current Report on Form 8-K filed May
10, 1999.
(j) Incorporated by reference from the Current Report on Form 8-K filed
September 27, 1999.
(b) On September 27, 1999, the Company filed aThere were no Current ReportReports on Form 8-K with respect to the approval of a Fourth Amendment to
Rights Agreement dated as of September 17, 1999 betweenfiled by the Company
and UMB Bank, n.a., as Rights Agent.during the fiscal quarter ended January 31, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASEY'S GENERAL STORES, INC.
Date: December 14, 1999March 9, 2000 By: /s/ John G. Harmon
--------------------------------------------
John G. Harmon
Secretary/Treasurer
(Authorized Officer and Principal
Financial Officer)
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
11 Statement regarding
computation 21
of
per share earnings
27 Financial Data Schedule
23