Form 8-K CASEYS GENERAL STORES For: Jun 05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 2017
CASEY'S GENERAL STORES, INC.
(Exact name of registrant as specified in its charter)
Iowa
(State or other jurisdiction of incorporation)
001-34700 | 42-0935283 | |
(Commission File Number) | (IRS Employer Identification No.) | |
One Convenience Blvd., Ankeny, Iowa | 50021 | |
(Address of principal executive Offices) | (Zip Code) | |
515/965-6100
(Registrant's telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
• | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
• | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
• | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CF 240.14d-2(b)) |
• | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
Item 2.02. Results of Operations and Financial Condition.
On June 5, 2017, Casey's General Stores, Inc. (the "Company") issued a press release announcing its financial results for the fourth fiscal quarter and fiscal year ended April 30, 2017. A copy of the Company's press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On June 2, 2017, the Board of Directors of the Company approved base salaries and the annual short-term incentive plan arrangements for the Company's executive officers and Vice Presidents for the fiscal year ending April 30, 2018. Further information concerning such arrangements is described in Exhibit 99.2 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The exhibits accompanying this report are listed in the Exhibit Index
attached hereto.
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, hereunto duly authorized.
CASEY'S GENERAL STORES, INC. | ||
Date: June 5, 2017 | By: | /s/ William J. Walljasper |
William J. Walljasper | ||
Senior Vice President and | ||
Chief Financial Officer | ||
EXHIBIT INDEX
The following exhibits are filed herewith:
Exhibit No. Description
99.1 | Press Release issued by Casey's General Stores, Inc., dated June 5, 2017. |
99.2 | Description of FY2018 Salary and Bonus Arrangements for Executive Officers |
Exhibit 99.1
NEWS RELEASE FOR IMMEDIATE RELEASE | ||
Casey’s General Stores, Inc. One Convenience Blvd. Ankeny, IA 50021 | Nasdaq Symbol CASY CONTACT Bill Walljasper (515) 965-6505 | |
Casey’s Reports Fiscal 2017 Earnings; Positioned for Strong Future Growth
Ankeny, IA, June 5, 2017 - Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported diluted earnings per share of $0.76 for the fourth quarter of its fiscal year ending April 30, 2017 compared to $1.19 for the same period a year ago. For the year, diluted earnings per share were $4.48 versus $5.73 for the same period last year. "Despite a challenging operating environment, fiscal 2017 marked the 16th consecutive year of positive same-store sales growth in both the grocery and other merchandise and prepared food and fountain categories," said Terry Handley, President and CEO. "We also recently opened our first store in the state of Ohio, and now have 116 sites under agreement for new store construction. We are optimistic about our growth opportunities."
Fuel - The Company’s annual goal for fiscal 2017 was to increase same-store gallons sold 2.0% with an average margin of 18.4 cents per gallon. For the year, same-store gallons sold were up 2.1% with an average margin of 18.4 cents per gallon. "Fiscal 2017 same-store gallons sold and fuel margin were in line with our annual goals," stated Handley. For the quarter, same-store gallons decreased 0.5% with an average margin of 17.2 cents per gallon. The Company sold 15.5 million renewable fuel credits for $7.1 million in the fourth quarter. For fiscal 2017, total gallons sold were up 5.6% to 2.1 billion. Gross profit dollars for the year were down slightly to $378.3 million, primarily due to a 1.2 cents per gallon lower fuel margin partially offset by an increase in gallons sold.
Grocery and Other Merchandise - Casey’s annual goal was to increase same-store sales 6.2% with an average margin of 32.0%. For the year, same-store sales were up 2.9% with an average margin of 31.5%. "In spite of the pressures experienced by many in the industry, we continue to be a leader in same-store sales growth in this category," said Handley. For the fourth quarter, same-store sales were up 1.5% with an average margin of 31.1%. For the year, total sales were up 5.7% to $2.1 billion and gross profit dollars increased 4.4% to $657.2 million.
Prepared Food and Fountain - Casey’s annual goal was to increase same-store sales 10.2% with an average margin of 62.5%. For the year, same-store sales were up 4.8% with an average margin of 62.3%. "Fiscal 2017 proved to be a challenging environment for the broader food service industry; however, we are encouraged about the future of this category as we continue to enhance digital engagement with our customers, roll out operational growth programs to more stores, and have locked in favorable cheese costs through December of 2017," stated Handley. For the fourth quarter, same-store sales were up 3.2% with an average margin of 61.7%. For fiscal 2017, total sales increased 8.3% to $953.4 million, and gross profit dollars rose 7.9% at $594.0 million.
Operating Expenses - For the fiscal year, operating expenses increased 11.2% to $1.2 billion. For the fourth quarter, operating expenses were up 11.4%. “Both the year-to-date and fourth quarter increases were primarily attributable to increases in employee-related costs from operating more stores compared to the same periods a year ago, along with the various growth programs impacting our existing stores,” said Handley. In addition, credit card fees and fuel expense combined were up $4.2 million for the quarter due to a 22.3% increase in retail fuel prices from the same time period a year ago.
Expansion - The Company’s annual goal for fiscal 2017 was to build or acquire 77 to 116 stores, replace 35 existing locations, and complete 100 major remodels. For the fiscal year, the Company built and opened 48 new stores, acquired 22 stores, completed 21 replacements, and remodeled 103 stores. As of April 30, 2017, there were
27 new stores, 21 replacement stores, and 11 major remodel stores under construction. Finally, at fiscal year end, the Company had 116 sites under agreement for new store construction and five acquisition stores under agreement to purchase. "Our new store construction activity continues to gain momentum," stated Handley. "The growing pipeline of sites under agreement has the Company well positioned for significant increase in organic growth. The Company will continue to review acquisitions that are a strategic fit."
Share Repurchase Program - From its inception on March 9, 2017, through the end of the fourth quarter of fiscal 2017, the Company repurchased 443,800 shares of its common stock under its open market share repurchase program for approximately $49.4 million, or an average price of $111.25 per share. As of April 30, 2017, the Company had a total remaining authorized amount for share repurchases of $250.6 million.
Fiscal 2018 Guidance - The corporate performance guidance for fiscal 2018 is as follows:
• | Increase same-store fuel gallons sold 1.0% to 2.0% with average margin of 18.0 to 20.0 cents per gallon |
• | Increase same-store grocery and other merchandise sales 2.0% to 4.0% with average margin of 31.0% to 32.0% |
• | Increase same-store prepared food and fountain sales 5.0% to 7.0% with average margin of 61.5% to 62.5% |
• | Operating expenses expected to increase 9.0% to 11.0% |
• | Depreciation and amortization expected to increase 13.0% to 15.0% |
• | Build or acquire 80 to 120 stores, replace 30 existing locations, and complete 75 major remodels |
Dividend - For the last 17 years, the Company has increased its annual dividend to shareholders. At its June meeting, the Board of Directors increased the quarterly dividend to $.26 per share. The dividend is payable August 15th to shareholders of record on August 1st, 2017.
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Casey’s General Stores, Inc.
Condensed Consolidated
Statements of Income
(Dollars in thousands, except share and per share amounts) (Unaudited)
Three Months Ended April 30, | Twelve Months Ended April 30, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Total revenue | $ | 1,846,460 | 1,582,954 | $ | 7,506,587 | 7,122,086 | |||||||
Cost of goods sold (exclusive of depreciation and amortization, shown separately below) | 1,448,241 | 1,194,734 | 5,825,426 | 5,508,465 | |||||||||
Gross profit | 398,219 | 388,220 | 1,681,161 | 1,613,621 | |||||||||
Operating expenses | 292,590 | 262,620 | 1,172,328 | 1,053,805 | |||||||||
Depreciation and amortization | 51,947 | 45,909 | 197,629 | 170,937 | |||||||||
Interest, net | 10,362 | 9,948 | 41,536 | 40,173 | |||||||||
Income before income taxes | 43,320 | 69,743 | 269,668 | 348,706 | |||||||||
Federal and state income taxes | 13,242 | 22,699 | 92,183 | 122,724 | |||||||||
Net income | $ | 30,078 | 47,044 | $ | 177,485 | 225,982 | |||||||
Net income per common share | |||||||||||||
Basic | $ | 0.77 | 1.20 | $ | 4.54 | 5.79 | |||||||
Diluted | $ | 0.76 | 1.19 | $ | 4.48 | 5.73 | |||||||
Basic weighted average shares | 38,985,738 | 39,053,737 | 39,124,665 | 39,016,299 | |||||||||
Plus effect of stock compensation | 450,073 | 408,585 | 454,333 | 405,900 | |||||||||
Diluted weighted average shares | 39,435,811 | 39,462,322 | 39,578,998 | 39,422,199 | |||||||||
Casey’s General Stores, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
April 30, 2017 | April 30, 2016 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 76,717 | $ | 75,775 | |||
Receivables | 43,244 | 27,701 | |||||
Inventories | 201,644 | 204,988 | |||||
Prepaid expenses | 9,179 | 3,008 | |||||
Income tax receivable | 19,901 | 14,413 | |||||
Total current assets | 350,685 | 325,885 | |||||
Other assets, net of amortization | 23,453 | 19,222 | |||||
Goodwill | 132,806 | 128,566 | |||||
Property and equipment, net of accumulated depreciation | 2,513,158 | 2,252,475 | |||||
Total assets | $ | 3,020,102 | $ | 2,726,148 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities | |||||||
Notes payable to bank | $ | 900 | $ | — | |||
Current maturities of long-term debt | 15,421 | 15,375 | |||||
Accounts payable | 293,903 | 241,207 | |||||
Accrued expenses | 136,322 | 130,989 | |||||
Total current liabilities | 446,546 | 387,571 | |||||
Long-term debt, net of current maturities | 907,356 | 822,869 | |||||
Deferred income taxes | 440,124 | 394,934 | |||||
Deferred compensation | 15,784 | 17,813 | |||||
Other long-term liabilities | 19,672 | 19,498 | |||||
Total liabilities | 1,829,482 | 1,642,685 | |||||
Total shareholders’ equity | 1,190,620 | 1,083,463 | |||||
Total liabilities and shareholders’ equity | $ | 3,020,102 | $ | 2,726,148 | |||
Certain statements in this news release, including any discussion of management expectations for future periods, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from future results expressed or implied by those statements. Casey’s disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
Revenue and Gross Profit by Category (Amounts in thousands) | |||||||||||||||||||
Three months ended 4/30/2017 | Fuel | Grocery & Other Merchandise | Prepared Food & Fountain | Other | Total | ||||||||||||||
Revenue | $ | 1,099,743 | $ | 500,068 | $ | 233,150 | $ | 13,499 | $ | 1,846,460 | |||||||||
Gross profit | $ | 85,592 | $ | 155,374 | $ | 143,774 | $ | 13,479 | $ | 398,219 | |||||||||
Margin | 7.8 | % | 31.1 | % | 61.7 | % | 99.9 | % | 21.6 | % | |||||||||
Fuel gallons | 496,492 | ||||||||||||||||||
Three months ended 4/30/2016 | |||||||||||||||||||
Revenue | $ | 873,081 | $ | 477,487 | $ | 218,349 | $ | 14,037 | $ | 1,582,954 | |||||||||
Gross profit | $ | 85,828 | $ | 153,299 | $ | 135,073 | $ | 14,020 | $ | 388,220 | |||||||||
Margin | 9.8 | % | 32.1 | % | 61.9 | % | 99.9 | % | 24.5 | % | |||||||||
Fuel gallons | 482,160 | ||||||||||||||||||
Revenue and Gross Profit by Category (Amounts in thousands) | |||||||||||||||||||
Year ended 4/30/2017 | Fuel | Grocery & Other Merchandise | Prepared Food & Fountain | Other | Total | ||||||||||||||
Revenue | $ | 4,414,128 | $ | 2,087,349 | $ | 953,430 | $ | 51,680 | $ | 7,506,587 | |||||||||
Gross profit | $ | 378,347 | $ | 657,190 | $ | 594,024 | $ | 51,600 | $ | 1,681,161 | |||||||||
Margin | 8.6 | % | 31.5 | % | 62.3 | % | 99.8 | % | 22.4 | % | |||||||||
Fuel gallons | 2,061,794 | ||||||||||||||||||
Year ended 4/30/2016 | |||||||||||||||||||
Revenue | $ | 4,214,802 | $ | 1,974,073 | $ | 880,713 | $ | 52,498 | $ | 7,122,086 | |||||||||
Gross profit | $ | 381,659 | $ | 629,234 | $ | 550,292 | $ | 52,436 | $ | 1,613,621 | |||||||||
Margin | 9.1 | % | 31.9 | % | 62.5 | % | 99.9 | % | 22.7 | % | |||||||||
Fuel gallons | 1,951,814 | ||||||||||||||||||
Fuel Gallons | Fuel Margin | ||||||||||||||||||||||||||||||||||
Same-store Sales Growth | (Cents per gallon, excluding credit card fees) | ||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Fiscal Year | Q1 | Q2 | Q3 | Q4 | Fiscal Year | ||||||||||||||||||||||||||
F2017 | 3.1 | % | 3.7 | % | 2.6 | % | (0.5 | )% | 2.1 | % | F2017 | 19.5 | ¢ | 18.6 | ¢ | 17.9 | ¢ | 17.2 | ¢ | 18.4 | ¢ | ||||||||||||||
F2016 | 3.4 | 3.3 | 1.6 | 4.6 | 3.0 | F2016 | 17.5 | 24.7 | 18.1 | 17.8 | 19.6 | ||||||||||||||||||||||||
F2015 | 3.0 | 2.3 | 2.2 | 3.5 | 2.6 | F2015 | 18.9 | 19.5 | 22.0 | 16.9 | 19.3 | ||||||||||||||||||||||||
Grocery & Other Merchandise | Grocery & Other Merchandise | |||||||||||||||||||||||||||||
Same-store Sales Growth | Margin | |||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Fiscal Year | Q1 | Q2 | Q3 | Q4 | Fiscal Year | |||||||||||||||||||||
F2017 | 4.7 | % | 3.1 | % | 3.0 | % | 1.5 | % | 2.9 | % | F2017 | 31.6 | % | 32.0 | % | 31.1 | % | 31.1 | % | 31.5 | % | |||||||||
F2016 | 7.0 | 7.5 | 7.1 | 7.4 | 7.1 | F2016 | 32.6 | 31.5 | 31.2 | 32.1 | 31.9 | |||||||||||||||||||
F2015 | 7.7 | 6.6 | 7.7 | 9.7 | 7.8 | F2015 | 32.5 | 32.3 | 31.2 | 32.1 | 32.1 | |||||||||||||||||||
Prepared Food & Fountain | Prepared Food & Fountain | |||||||||||||||||||||||||||||
Same-store Sales Growth | Margin | |||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Fiscal Year | Q1 | Q2 | Q3 | Q4 | Fiscal Year | |||||||||||||||||||||
F2017 | 5.1 | % | 5.1 | % | 5.8 | % | 3.2 | % | 4.8 | % | F2017 | 62.8 | % | 62.9 | % | 61.7 | % | 61.7 | % | 62.3 | % | |||||||||
F2016 | 10.3 | 9.4 | 6.0 | 8.2 | 8.4 | F2016 | 62.5 | 63.4 | 62.0 | 61.9 | 62.5 | |||||||||||||||||||
F2015 | 11.1 | 11.1 | 14.1 | 13.5 | 12.4 | F2015 | 59.9 | 59.3 | 58.7 | 60.9 | 59.7 | |||||||||||||||||||
Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on June 6, 2017. The call will be broadcast live over the Internet at 9:30 a.m. CDT via the Press and Documents section of our Web site and will be available in an archived format.
EXHIBIT 99.2
FY2018 SALARY AND BONUS ARRANGEMENTS
FOR EXECUTIVE OFFICERS
FY2018 Salary Structure
Position Name FY2018 Base Salary
President & CEO Terry W. Handley $925,000
SVP/CFO William J. Walljasper $595,000
SVP/General Counsel Julia L. Jackowski $593,000
SVP/Store Operations Jay Soupene $440,000
SVP/Store Development Brian J. Johnson $435,000
SVP/Human Resources Cindi Summers $435,000
FY2018 Annual Incentive Plan
In recent years, the Company's annual incentive plan focused on diluted earnings per share (“EPS”) and return on invested capital (“ROIC”) performance, with 75/25% weightings. Minimum, target and maximum goals varied from year to year, based on the prior year’s financial results. The combined payout related to EPS and ROIC performance ranged from 10% to 100% of base salary, with a 60% payout at the targeted performance level. The payouts were split between cash and restricted shares, with the cash portion decreasing at higher performance levels. A three-year holding requirement was imposed for the shares awarded in an effort to mitigate the effect of fuel margins.
For fiscal 2018, the Board of Directors, upon the recommendation of the Compensation Committee (which was assisted by Willis Towers Watson), has determined to introduce more pay differentiation according to job responsibilities and implement a tiered approach to annual incentive opportunities, expressed as a percentage of base salary. The three tiers are for the Chief Executive Officer (“CEO”), the Senior Vice Presidents (“SVPs”), and the Vice Presidents (“VPs”). The annual incentive target for each tier will be: 100% of base salary for the CEO, 65% or 70% of base salary for the S
VPs, and between 50% and 60% of base salary for the VPs. This change is intended to bring the annual incentives for CEO, SVPs and VPs closer to typical market practice.
The fiscal 2018 annual incentive plan will continue to be based on EPS (50%), but will no longer include ROIC (which is expected to become part of long-term incentive awards to be made by the Committee in the near future). The remaining 50% of the annual incentive plan will be based on same-store sales growth and gross profit margin in both fuel (20%) and inside sales (30%). Threshold, target and maximum performance goals have been established for the annual incentive plan, based on internal goals and objectives approved by the Board, with a payout range from 0% to 200% of target depending on performance. A "circuit breaker" will be utilized, under which a minimum level of EPS is required before any bonus may be earned. All bonuses earned under the annual incentive plan will be paid in cash, and will no longer include an equity payout feature.