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, 20002001
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 49,478,76249,492,762 shares
(Class) (Outstanding at DecemberMarch 5, 2000)2001)
CASEY'S GENERAL STORES, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.Statements
Consolidated condensed balance sheets -
OctoberJanuary 31, 20002001 and April 30, 2000 23
Consolidated condensed statements
of income - three and sixnine months ended
OctoberJanuary 31, 2001 and 2000 and 1999 45
Consolidated condensed statements of
cash flows - sixnine months ended
OctoberJanuary 31, 2001 and 2000 and 1999 56
Notes to consolidated condensed
financial statements 67
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 7Operations 8
Item 3. Quantitative and Qualitative Disclosure
about Market Risk. 12Risk 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 13
Item 4. Submission of Matters to a Vote of
Security Holders. 13Proceedings 14
Item 6. Exhibits and Reports on Form 8-K.8-K 14
SIGNATURE 17
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PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Consolidated Financial Statements.
---------------------------------
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
October 31,
2000 April 30,
(Unaudited) 2000
----------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 18,418 15,917
Short-term investments 30,361 7,925
Receivables 4,155 4,111
Inventories 55,410 41,363
Prepaid expenses 6,200 5,745
-------- -------
Total current assets 114,544 75,061
Long-term investments 7,542 -----
Other assets 1,479 1,513
Property and equipment, net of
accumulated depreciation
October 31, 2000, $265,042
April 30, 2000, $245,858 572,520 546,991
-------- -------
$696,085January 31,
2001 April 30,
(Unaudited) 2000
--------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 5,267 15,917
Short-term investments 29,630 7,925
Receivables 4,927 4,111
Inventories 60,515 41,363
Prepaid expenses 8,146 5,745
-------- -------
Total current assets 108,485 75,061
Other assets 1,461 1,513
Property and equipment, net of
accumulated depreciation
January 31, 2001, $275,280
April 30, 2000, $245,858 580,713 546,991
-------- -------
$690,659 623,565
======== =======
See notes to consolidated condensed financial statements.
-2--3-
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Continued)
(Dollars in Thousands)
October 31,
2000 April 30,
(Unaudited) 2000
----------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 3,400 45,950
Current maturities of
long-term debt 9,765 9,703
Accounts payable 59,515 60,959
Accrued expenses 25,059 21,948
Income taxes payable 7,075 2,091
-------- -------
Total current liabilities 104,814 140,651
-------- -------
Long-term debt, net of
current maturities 189,921 112,896
-------- -------
Deferred income taxes 60,650 57,650
-------- -------
Deferred compensation 3,908 3,606
-------- -------
Shareholders' equity:
Preferred stock, no par value --- ---
Common Stock, no par value 38,138 37,930
Retained earnings 298,654 270,832
-------- -------
Total shareholders' equity 336,792 308,762
-------- -------
$696,085January 31,
2001 April 30,
(Unaudited) 2000
--------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 14,300 45,950
Current maturities of
long-term debt 9,297 9,703
Accounts payable 51,476 60,959
Accrued expenses 24,623 21,948
Income taxes payable --- 2,091
-------- -------
Total current liabilities 99,696 140,651
-------- -------
Long-term debt, net of
current maturities 184,846 112,896
-------- -------
Deferred income taxes 62,150 57,650
-------- -------
Deferred compensation 4,059 3,606
-------- -------
Shareholders' equity
Preferred stock, no par value --- ---
Common Stock, no par value 38,260 37,930
Retained earnings 301,648 270,832
-------- -------
Total shareholders' equity 339,908 308,762
-------- -------
$690,659 623,565
======== =======
See notes to consolidated condensed financial statements.
-3--4-
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands, except per share amounts)
Three Months Ended Six Months Ended
October 31, October 31,
------------------ ------------------
2000 1999 2000 1999
-------- --------- --------- -------
Net sales $495,708 412,752 1,024,599 799,946
Franchise revenue 981 1,431 2,126 2,945
-------- --------- --------- -------
496,689 414,183 1,026,725 802,891
-------- --------- --------- -------
Cost of goods sold 396,570 327,769 824,632 630,471
Operating expenses 64,890 54,857 128,782 106,437
Depreciation and
amortization 10,321 9,406 20,392 18,501
Interest, net 2,890 1,988 5,861 3,990
-------- --------- --------- -------
474,671 394,020 979,667 759,399
-------- --------- --------- -------
22,018 20,163 47,058 43,492
Federal and state
income taxes 8,190 7,501 17,505 16,179
-------- --------- --------- -------
Net income $ 13,828 12,662 29,553 27,313
========Three Months Ended Nine Months Ended
January 31, January 31,
-------------------- -------------------
2001 2000 2001 2000
------ -------- ------ --------
Net sales $ 437,004 402,029 1,461,603 1,201,975
Franchise revenue 832 1,223 2,958 4,168
--------- ------- --------- ---------
437,836 403,252 1,464,561 1,206,143
--------- ------- --------- ---------
Cost of goods sold 352,903 326,806 1,177,535 957,277
Operating expenses 64,999 56,058 193,781 162,495
Depreciation and
amortization 10,473 9,724 30,865 28,225
Interest, net 3,117 2,370 8,978 6,360
--------- ------- --------- ---------
431,492 394,958 1,411,159 1,154,357
--------- ------- --------- ---------
6,344 8,294 53,402 51,786
Federal and state
income taxes 2,361 3,085 19,866 19,264
--------- ------- --------- ---------
Net income $ 3,983 5,209 33,536 32,522
========= ======= ========= =========
Earnings per common share
Basic $ .08 .10 .68 .62
========= ======= ========= =========
Diluted $ .08 .10 .68 .62
========= ======= ========= ========= =======
Earnings per common share
Basic $ .28 .24 .60 .52
======== ========= ========= =======
Diluted $ .28 .24 .60 .52
======== ========= ========= =======
See notes to consolidated condensed financial statements.
-4--5-
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
SixNine Months Ended
OctoberJanuary 31,
-----------------------------------
2001 2000
1999
-------- ------------ ----
Cash flows from operations:
Net income $ 29,553 27,31333,536 32,522
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation and amortization 20,392 18,50130,865 28,225
Deferred income taxes 3,000 3,5004,500 5,250
Changes in assets and liabilities:
Receivables (44) (844)(816) (862)
Inventories (14,047) (4,757)(19,152) (7,133)
Prepaid expenses (455) (142)(2,401) (1,229)
Accounts payable (1,444) 10,108(9,483) 5,866
Accrued expenses 3,111 (765)2,675 923
Income taxes payable 4,984 2,678(2,091) (2,457)
Other, net 721 1,511
--------1,213 1,889
------- -------
Net cash provided by operations 45,771 57,103
--------38,846 62,994
------- -------
Cash flows from investing:
Purchase of property and equipment (46,830) (54,332)(65,729) (83,486)
Purchase of investments (34,190) (2,747)
Sale of investments 4,737 3,583
--------12,918 5,596
------- -------
Net cash used in investing activities (76,283) (53,496)
--------(87,001) (80,637)
------- -------
Cash flows from financing:
Proceeds from long-term debt 80,000 ------
Payments onof long-term debt (2,914) (2,841)(8,456) (7,963)
Net activity of short-term debt (42,550) 8,100(31,650) 52,600
Repurchase of Common Stock -- (12,806)
Proceeds from exercise of stock options 208 288
Payment331 347
Payments of cash dividends (1,731) (1,581)
--------(2,720) (2,373)
------- -------
Net cash provided by financing activities 33,013 3,966
--------37,505 29,805
------- -------
Net (decrease) increase in cash
and cash equivalents 2,501 7,573(10,650) 12,162
Cash and cash equivalents at
beginning of the periodyear 15,917 5,935
--------------- -------
Cash and cash equivalents at
end of the periodquarter $ 18,418 13,508
========5,267 18,097
======= =======
See notes to consolidated condensed financial statements.
-5--6-
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, 2000,2001, and the results of operations for the sixthree and threenine
months ended OctoberJanuary 31, 20002001 and 1999,2000, and changes in cash flows for the
sixnine months ended OctoberJanuary 31, 20002001 and 1999.2000.
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.
-6--7-
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, 2000,2001, the Company's ratio of current assets to
current liabilities was 1.09 to 1. The ratio at OctoberJanuary 31, 19992000 and April 30,
2000 was .81.68 to 1 and .53 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 decreased $11,332 (19.8%$24,148 (38.3%) in the sixnine
months ended OctoberJanuary 31, 20002001 from the comparable period in the prior year,
primarily as a result of a largelarger increase in inventories due to higher wholesale gasoline
costs and a small decrease in
accounts payable. Cash flows from investing in the sixnine months ended OctoberJanuary 31,
2000 increased due to the2001 decreased, primarily as a result of an increased purchase of investments.
However, this result was partially offset by a decrease in capital expenditures.
Cash flows from financing also increased primarily due to the proceeds from long-termthe long-
term debt exceeding the pay downnet paydown of the short-term debt. Cash
used in investing activities is expected to increase as a resultdebt and because there was
no repurchase of the anticipated growth in capital expenditures.Company's Common Stock during the nine months ended January
31, 2001.
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
-8-
first sixnine months of fiscal 2001, the Company expended $46,830$65,729 for property and
-7-
equipment, primarily for the construction, acquisition and remodeling of Company
stores, compared to $54,332$83,486 for the comparable period in the prior year. The
Company anticipates expending approximately $90,000 in fiscal 2001 for
construction, acquisition and remodeling of Company stores, primarily from funds
generated by operations, existing cash and short-term investments and bank lines
of credit.
As of OctoberJanuary 31, 2000,2001, the Company had long-term debt of $189,921,$184,846,
consisting of $9,750$9,000 in principal amount of 7.70% Senior Notes , $30,000 in
principal amount of 7.38% Senior Notes, $10,800$7,200 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%, $80,000 in principal
amount of 7.89% Senior Notes, Series A, $6,445$6,000 of mortgage notes payable, and
$2,926$2,646 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 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
-9-
purchasers of the 6.55% Senior
Notes.
-8-
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.
Interest on the 7.89% Senior Notes, Series A, is payable semi-annually on
the 15th day of May and November in each year, commencing November 15, 2000, and
at maturity, at the rate of 7.89% per annum. The 7.89% Senior Notes mature on
May 15, 2010, with prepayments of principal commencing on May 15, 2004 and on
each May 15 thereafter to and including May 15, 2009, with the remaining
principal payable at maturity on May 15, 2010. The Company may prepay the 7.89%
Senior Notes in whole or in part at any time in an amount not less than $2,000
in the case of a partial prepayment at a redemption price calculated in
accordance with the Note Purchase Agreement dated as of May 1, 2000 between the
Company and the purchasers of the 7.89% Senior Notes.
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
-10-
Company currently has 2,4012,424 USTs, of which 2,0712,084 are fiberglass and 330340 are
steel.
-9-
Management believes that its existing gasoline procedures and planned
capital expenditures will continue to keep the Company in substantial compliance
with all current federal and state UST 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, 2000 and 1999, the Company spent approximately $447 and $516, respectively,
for assessments and remediation. During the sixnine months ended OctoberJanuary 31, 2000,2001,
the Company expended approximately $387$689 for such purposes. Substantially all of
these expenditures have been submitted for reimbursement from state-sponsored
trust fund programs and as of OctoberJanuary 31, 2000,2001, approximately $4,900$5,000 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, 20002001 of approximately $200 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, 20002001 Compared to Three Months Ended OctoberJanuary
--------------------------------------------------------------------------
31, 19992000 (Dollars and Amounts in Thousands)
- -------------------------------------------
Net sales for the secondthird quarter of fiscal 2001 increased by $82,956
(20.1%$34,975 (8.7%)
over the comparable period in fiscal 2000. Retail gasoline sales increased by
$67,094 (29.4%$33,759 (14.6%) as the number of gallons sold increaseddecreased by 6,024
(3.0%6,710 (3.4%) while
the average retail price per gallon increased 25.6%18.7%. During this same period,
retail sales of grocery and general merchandise increased by $17,991 (11.3%$5,853 (4.0%) due
to the addition of 9981 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 80.0%80.8% for the secondthird
quarter of fiscal 2001, compared to 79.4%81.3% for the comparable period in the prior
year. The gross profit margins on retail gasoline sales decreasedincreased (to 8.1%8.2%)
during the secondthird quarter of fiscal 2001 from the secondthird quarter of the prior year
(8.6%(7.2%) due to the increase in wholesale gasoline costs during the quarter.
However, the gross profit margin per gallon increasedincreasing (to $.1173) in the second
quarter of fiscal 2001$.1152) from the
comparable period in the prior year ($.0992).0861). The gross profits on retail sales
of grocery
-11-
and general merchandise also increased (to 40.3%39.1%) from the comparable period in
the prior year (38.5%(37.2%), primarily due to the increase in the retail prices of
selective products.
-10-
Operating expenses as a percentage of net sales were 13.1%14.9% for the secondthird
quarter of fiscal 2001 compared to 13.3%13.9% for the comparable period in the prior
year. The decreaseincrease in operating expenses as a percentage of net sales was caused
primarily by an increaseincreases in the average retail price per gallon of gasoline sold
(25.6%).wages, utilities, bank charges, and snow removal
costs.
Net income increaseddecreased by $1,166 (9.2%$1,226 (23.5%). The increasedecrease in net income was
attributable primarily to the increase in retail sales of grocerythe operating expenses and general
merchandise, an increasea decrease
in the number of gallons of gasoline sold, an increase
in the gross profit margin per gallon of gasoline sold, an increase in the gross
profits on retail sales of grocery and general merchandise, and an increased
number of stores in operation for at least three years.
Sixsold.
Nine Months Ended OctoberJanuary 31, 20002001 Compared to SixNine Months Ended OctoberJanuary
------------------------------------------------------------------------
31, --------------------------------------------------------------------------
19992000 (Dollars and Amounts in Thousands)
- ----------------------------------------------------------------------------------
Net sales for the first sixnine months of fiscal 2001 increased by $224,653
(28.1%$259,628
(21.6%) over the comparable period in fiscal 2000. Retail gasoline sales
increased by $183,374 (42.2%$217,132 (32.6%) as the number of gallons sold increased by 22,237
(5.7%15,527
(2.6%) and the average retail price per gallon increased 34.6%29.2%. During this same
period, retail sales of grocery and general merchandise increased by $42,382 (13.4%$48,235
(10.4%) due to the addition of 9981 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 80.5%80.6% for the first
sixnine months of fiscal 2001 compared to 78.8%79.6% for the comparable period in the
prior year.year due to total sales consisting of a larger percentage of retail
gasoline sales (60.5%) than the comparable period in the prior year (55.4%).
This result occurred becausewhile the gross profit margins on retail gasoline sales
decreased (to 8.3%remained constant (8.3%) during the first sixnine months of fiscal 2001 with the
comparable period in the prior year (8.3%) and while the gross profit margin per
gallon increased (to $.1214) from the comparable period in the prior year
(8.9%) due to the increase in wholesale
gasoline costs during the period. However, the gross profit margin per gallon
increased in the first six months of fiscal 2001 (to $.1242) from the comparable
period in the prior year ($.0989).0946). The gross profits on retail sales of grocery and general merchandise
also increased (to 39.3%39.2%) from the comparable period in the prior year (38.8%(38.3%),
primarily due to the increase in the retail prices of selective products.
Operating expenses as a percentage of net sales were 12.6%13.3% for the first
sixnine months of fiscal 2001 compared to 13.3% during13.5% 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 (34.6%).sold.
-12-
Net income increased by $2,240 (8.2%$1,014 (3.1%). The increase in net income was
attributable primarily to the increase in the gross profit margins on retail
gasoline sales of grocery and general
merchandise,
-11-
an increase in the number of gallons of gasoline sold, an increase in the gross profit margin per gallon of gasoline sold, an increase in the gross profitsmargins on retail sales of
grocery and general merchandise, and an increased number of
stores in operation at least three years.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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
----------------------------------------------------------
The Company's exposure to market risk for changes in interest rates relates
primarily to its investment portfolio and long-term debt obligations. The
Company places its investments with high quality credit issuers and, by policy,
limits the amount of credit exposure to any one issuer. As stated in its policy,
the Company's first priority is to reduce the risk of principal loss.
Consequently, the Company seeks to preserve its invested funds by limiting
default risk, market risk and reinvestment risk. The Company mitigates default
risk by investing in only high quality credit securities that it believes to be
low risk and by positioning its portfolio to respond appropriately to a
significant reduction in a credit rating of any investment issuer or guarantor.
The portfolio includes only marketable securities with active secondary or
resale markets to ensure portfolio liquidity.
At OctoberJanuary 31, 2000,2001, the Company had no derivative instruments, but
management is aware of the provisions of SFAS No. 133 (as amended by SFAS Nos.
137 and 138) establishing accounting and reporting standards for derivative
instruments.
-12--13-
The Company believes that an immediate 100 basis point move in interest
rates affecting the Company's floating and fixed rate financial instruments as
of October 31, 2000January 1, 2001 would have an immaterial effect on the Company's pretax
earnings and on the fair value of those instruments.
PART II - OTHER INFORMATION
---------------------------
Item 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 15, 2000, 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 43,450,820 617,218
Ronald M. Lamb 39,768,813 4,299,225
John G. Harmon 39,519,897 4,548,141
John R. Fitzgibbon 43,638,121 429,917
Patricia Clare Sullivan 43,500,691 567,347
Kenneth H. Haynie 41,672,558 2,395,480
John P. Taylor 43,639,458 428,580
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The 2000 Stock Option Plan also was approved at the Annual Meeting of
shareholders, with the results being as follows:
Number of Shares Number of Shares Number of Shares
Voting For Voting Against that Abstained
------------------ ---------------- ----------------
42,176,994 1,603,049 287,995
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)
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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)
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4.7 Note Purchase Agreement dated as of May 1, 2000 among the
Company and the purchasers of the 7.89% Senior Notes, Series
2000-A (k)
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) 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.
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(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.
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(j) Incorporated by reference from the Current Report on Form 8-K filed
September 27, 1999.
(k) Incorporated by reference from the Current Report on Form 8-K filed May 22,
2000.
(b) There were no Current Reports on Form 8-K filed by the Company during
the fiscal quarter ended January 31, 2001.
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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 11, 2000March 5, 2001 By: /s/ John G. Harmon
-------------------------------------------------------
John G. Harmon
Secretary/Treasurer
(Authorized Officer and Principal
Financial Officer)
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EXHIBIT INDEX
-------------
Exhibit No. Description Page
- ----------- ----------- ----
11 Statement regarding
computation of
per share earnings 19
27 Financial Data Schedule 21
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