10-Q 1 casy-20231031.htm 10-Q casy-20231031
0000726958--04-302024Q2false0.5000007269582023-05-012023-10-3100007269582023-12-07xbrli:shares00007269582023-10-31iso4217:USD00007269582023-04-3000007269582023-08-012023-10-3100007269582022-08-012022-10-3100007269582022-05-012022-10-31iso4217:USDxbrli:shares0000726958us-gaap:CommonStockMember2023-04-300000726958us-gaap:RetainedEarningsMember2023-04-300000726958us-gaap:RetainedEarningsMember2023-05-012023-07-3100007269582023-05-012023-07-310000726958us-gaap:CommonStockMember2023-05-012023-07-310000726958us-gaap:CommonStockMember2023-07-310000726958us-gaap:RetainedEarningsMember2023-07-3100007269582023-07-310000726958us-gaap:RetainedEarningsMember2023-08-012023-10-310000726958us-gaap:CommonStockMember2023-08-012023-10-310000726958us-gaap:CommonStockMember2023-10-310000726958us-gaap:RetainedEarningsMember2023-10-310000726958us-gaap:CommonStockMember2022-04-300000726958us-gaap:RetainedEarningsMember2022-04-3000007269582022-04-300000726958us-gaap:RetainedEarningsMember2022-05-012022-07-3100007269582022-05-012022-07-310000726958us-gaap:CommonStockMember2022-05-012022-07-310000726958us-gaap:CommonStockMember2022-07-310000726958us-gaap:RetainedEarningsMember2022-07-3100007269582022-07-310000726958us-gaap:RetainedEarningsMember2022-08-012022-10-310000726958us-gaap:CommonStockMember2022-08-012022-10-310000726958us-gaap:CommonStockMember2022-10-310000726958us-gaap:RetainedEarningsMember2022-10-3100007269582022-10-31casy:storecasy:statecasy:people0000726958casy:CouponsAndRewardsPointsMember2023-10-310000726958casy:CouponsAndRewardsPointsMember2023-04-300000726958casy:GiftCardsMember2023-10-310000726958casy:GiftCardsMember2023-04-300000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membercasy:SecuredOvernightFinancingRateMember2023-10-31xbrli:pure0000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membercasy:SecuredOvernightFinancingRateMembersrt:MinimumMember2023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membercasy:SecuredOvernightFinancingRateMembersrt:MinimumMember2023-05-012023-10-310000726958srt:MaximumMemberus-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membercasy:SecuredOvernightFinancingRateMember2023-05-012023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:DailySimpleSecuredOvernightFinancingRateMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:DailySimpleSecuredOvernightFinancingRateMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membersrt:MinimumMember2023-05-012023-10-310000726958srt:MaximumMemberus-gaap:RevolvingCreditFacilityMembercasy:DailySimpleSecuredOvernightFinancingRateMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-05-012023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:DailySimpleSecuredOvernightFinancingRateMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membersrt:MinimumMember2023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Membersrt:MinimumMember2023-05-012023-10-310000726958srt:MaximumMemberus-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-05-012023-10-310000726958us-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-04-300000726958us-gaap:LineOfCreditMembercasy:UnsecuredRevolvingLineofCreditMember2023-06-010000726958casy:UnsecuredRevolvingLineofCreditMemberus-gaap:LetterOfCreditMember2023-10-310000726958us-gaap:LineOfCreditMembercasy:UnsecuredRevolvingLineofCreditMember2023-10-310000726958us-gaap:LineOfCreditMembercasy:UnsecuredRevolvingLineofCreditMember2023-04-300000726958us-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:RevolvingCreditFacilityMembercasy:UnsecuredRevolvingCreditFacilityDueJanuary2024Member2023-10-310000726958us-gaap:EmployeeStockOptionMember2023-10-310000726958us-gaap:RestrictedStockUnitsRSUMember2023-10-310000726958casy:A2018StockPlanMember2023-10-310000726958casy:StockIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-05-012023-10-310000726958casy:StockIncentivePlanMembersrt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2023-05-012023-10-310000726958srt:MaximumMembercasy:StockIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-05-012023-10-310000726958casy:StockIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-04-300000726958casy:StockIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-10-310000726958casy:StockIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-05-012022-10-310000726958casy:A2018StockPlanMemberus-gaap:EmployeeStockOptionMember2023-05-012023-10-310000726958us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-10-310000726958us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-08-012023-10-310000726958us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-05-012023-10-310000726958us-gaap:PendingLitigationMembercasy:McColleyVCaseysGeneralStoresIncMember2023-05-012023-10-31casy:employeecasy:segmentcasy:merchandise_category
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-34700 
CASEY’S GENERAL STORES, INC.
(Exact name of registrant as specified in its charter)

Iowa 42-0935283
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
One SE Convenience Blvd., Ankeny, Iowa
(Address of principal executive offices)
50021
(Zip Code)
(515) 965-6100
(Registrant’s telephone number, including area code)
Securities Registered pursuant to Section 12(b) of the Act 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par value per shareCASYThe NASDAQ Global Select Market

Securities Registered pursuant to Section 12(g) of the Act
NONE 
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      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer Non-accelerated filer
Smaller reporting company Emerging growth company

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
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at December 7, 2023
Common stock, no par value per share37,108,652 shares

CASEY’S GENERAL STORES, INC.
INDEX
 
  Page
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2
Item 6.

3

PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(DOLLARS IN THOUSANDS)
 
October 31,
2023
April 30,
2023
Assets
Current assets:
Cash and cash equivalents$409,891 $378,869 
Receivables146,976 120,547 
Inventories418,901 376,085 
Prepaid expenses32,800 22,107 
Income taxes receivable2,142 23,347 
Total current assets1,010,710 920,955 
Other assets, net of amortization204,458 192,153 
Goodwill619,667 615,342 
Property and equipment, net of accumulated depreciation of $2,762,677 at October 31, 2023 and $2,620,149 at April 30, 2023
4,392,626 4,214,820 
Total assets$6,227,461 $5,943,270 
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt and finance lease obligations$53,166 $52,861 
Accounts payable601,310 560,546 
Accrued expenses295,350 313,718 
Total current liabilities949,826 927,125 
Long-term debt and finance lease obligations, net of current maturities1,596,786 1,620,513 
Deferred income taxes582,825 543,598 
Insurance accruals, net of current portion34,064 32,312 
Other long-term liabilities166,569 159,056 
Total liabilities3,330,070 3,282,604 
Shareholders’ equity:
Preferred stock, no par value  
Common stock, no par value51,117 110,037 
Retained earnings2,846,274 2,550,629 
Total shareholders’ equity2,897,391 2,660,666 
Total liabilities and shareholders' equity$6,227,461 $5,943,270 
See notes to unaudited condensed consolidated financial statements.



4

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
 Three Months Ended
October 31,
Six Months Ended
October 31,
 2023202220232022
Total revenue$4,064,400 $3,978,575 $7,933,651 $8,433,219 
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)3,178,839 3,167,633 6,170,336 6,786,027 
Operating expenses579,703 539,207 1,140,558 1,082,478 
Depreciation and amortization85,598 78,117 168,503 154,412 
Interest, net12,306 13,502 24,801 27,318 
Income before income taxes207,954 180,116 429,453 382,984 
Federal and state income taxes49,172 42,561 101,434 92,497 
Net income$158,782 $137,555 $328,019 $290,487 
Net income per common share
Basic$4.27 $3.69 $8.80 $7.80 
Diluted$4.24 $3.67 $8.76 $7.75 
Basic weighted average shares outstanding37,227,932 37,277,080 37,264,442 37,250,580 
Plus effect of stock compensation203,143 246,679 187,811 215,335 
Diluted weighted average shares outstanding37,431,075 37,523,759 37,452,253 37,465,915 
Dividends declared per share$0.43 $0.38 $0.86 $0.76 
See notes to unaudited condensed consolidated financial statements.
5

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
Shares OutstandingCommon
Stock
Retained
Earnings
Shareholders' Equity
Balance at April 30, 202337,263,248 $110,037 $2,550,629 $2,660,666 
Net income  169,237 169,237 
Dividends declared (43 cents per share)
  (16,214)(16,214)
Repurchase of common stock(123,569)(29,893) (29,893)
Share-based compensation (net of tax withholding on employee share-based awards)126,774 (7,501) (7,501)
Balance at July 31, 202337,266,453 72,643 2,703,652 2,776,295 
Net income  158,782 158,782 
Dividends declared (43 cents per share)
  (16,160)(16,160)
Repurchase of common stock(110,481)(30,391) (30,391)
Share-based compensation (net of tax withholding on employee share-based awards)8,223 8,865  8,865 
Balance at October 31, 202337,164,195 $51,117 $2,846,274 $2,897,391 
Shares OutstandingCommon
Stock
Retained
Earnings
Shareholders' Equity
Balance at April 30, 202237,111,667 $79,412 $2,161,426 $2,240,838 
Net income— — 152,932 152,932 
Dividends declared (38 cents per share)
— — (14,431)(14,431)
Share-based compensation (net of tax withholding on employee share-based awards)138,132 707 — 707 
Balance at July 31, 202237,249,799 80,119 2,299,927 2,380,046 
Net income— — 137,555 137,555 
Dividends declared (38 cents per share)
— — (14,335)(14,335)
Share-based compensation (net of tax withholding on employee share-based awards)8,823 9,550 — 9,550 
Balance at October 31, 202237,258,622 $89,669 $2,423,147 $2,512,816 
See notes to unaudited condensed consolidated financial statements.

6

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN THOUSANDS)
 
 Six months ended October 31,
 20232022
Cash flows from operating activities:
Net income$328,019 $290,487 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization168,503 154,412 
Amortization of debt issuance costs555 691 
Change in excess replacement cost over LIFO inventory valuation7,946 16,927 
Share-based compensation19,485 25,875 
(Gain) loss on disposal of assets and impairment charges(232)4,791 
Deferred income taxes39,353 25,284 
Changes in assets and liabilities:
Receivables(21,897)(49,463)
Inventories(44,714)(13,904)
Prepaid expenses(10,693)(9,875)
Accounts payable(10,400)(14,330)
Accrued expenses(20,925)6,224 
Income taxes21,992 46,707 
Other, net4,788 2,273 
Net cash provided by operating activities481,780 486,099 
Cash flows from investing activities:
Purchase of property and equipment(175,955)(177,327)
Payments for acquisition of businesses, net of cash acquired(139,359)(2,692)
Proceeds from sales of assets8,291 10,052 
Net cash used in investing activities(307,023)(169,967)
Cash flows from financing activities:
Payments of long-term debt and finance lease obligations(35,135)(17,302)
Payments of cash dividends(30,988)(27,292)
Repurchase of common stock(59,491) 
Tax withholdings on employee share-based awards(18,121)(15,618)
Net cash used in financing activities(143,735)(60,212)
Net increase in cash and cash equivalents31,022 255,920 
Cash and cash equivalents at beginning of the period378,869 158,878 
Cash and cash equivalents at end of the period$409,891 $414,798 
7

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
(DOLLARS IN THOUSANDS)
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
 Six months ended October 31,
 20232022
Cash paid during the period for:
Interest, net of amount capitalized$31,429 $25,077 
Income taxes, net36,037 17,696 
Noncash investing and financing activities:
       Purchased property and equipment in accounts payable78,684 59,236 
       Right-of-use assets obtained in exchange for new finance lease liabilities11,216 2,119 
       Right-of-use assets obtained in exchange for new operating lease liabilities8,273 1,163 
See notes to unaudited condensed consolidated financial statements.

8

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Dollars in Thousands, Except Share and Per Share Amounts)
 

1.    Presentation of Financial Statements
As of October 31, 2023, Casey’s General Stores, Inc. and its subsidiaries (hereinafter referred to as the "Company" or "Casey’s") operate 2,592 convenience stores in 16 states, primarily in the Midwest. Many of the stores are located in smaller communities, often with populations of less than 5,000.
The accompanying condensed consolidated financial statements include the accounts and transactions of Casey's General Stores, Inc. and its direct and indirect wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

2.    Basis of Presentation
The accompanying condensed consolidated 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 U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position as of October 31, 2023 and April 30, 2023, the results of operations, for the three and six months ended October 31, 2023 and 2022, and shareholders' equity and cash flows for the six months ended October 31, 2023 and 2022. Although management believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto. Additionally, see the Form 10-K for the year ended April 30, 2023 for our consideration of new accounting pronouncements.
Certain amounts in prior year have been reclassified to conform to current year presentation.

3.    Revenue and Cost of Goods Sold
The Company recognizes retail sales of fuel, grocery and general merchandise, prepared food and dispensed beverage and other revenue at the time of the sale to the guest. Sales taxes collected from guests and remitted to the government are recorded on a net basis in the condensed consolidated statements of income.
A portion of revenue from sales that include points under our Casey’s Rewards program is deferred. The deferred portion
of the sale represents the value of the estimated future redemption of the points. The amounts related to points are
deferred until their redemption or expiration. Revenue related to the points issued is expected to be recognized less than
one year from the original sale to the guest. As of October 31, 2023 and April 30, 2023, the Company recognized a contract liability of $50,290 and $55,561, respectively, related to the outstanding Casey's Rewards program, which is included in accrued expenses on the condensed consolidated balance sheets. During the current quarter, the digital box top program was discontinued and outstanding digital box tops were converted to points.
Gift card related revenue is recognized as the gift cards are used by the guest. Gift card breakage revenue is recognized based on the estimated gift card breakage rate over the pro rata usage of the card. As of October 31, 2023 and April 30, 2023, the Company recognized a liability of $16,291 and $17,463, respectively, related to outstanding gift cards, which is included in accrued expenses on the condensed consolidated balance sheets.
The Company often receives vendor allowances on the basis of quantitative contract terms that vary by product and vendor or directly on the basis of purchases made. Vendor allowances include rebates and other funds received from vendors to promote their products. These amounts are recognized in the period earned based on the applicable rebate agreement. Reimbursements of an operating expense (e.g., advertising) are recorded as reductions of the related expense.
Renewable identification numbers (“RINs”) are assigned to gallons of renewable fuels produced and are used to track compliance with the renewable fuel standard. At times, we purchase fuel components (ethanol, gasoline, biodiesel or
9

diesel) and blend those components into a finished product in a fuel truck. This process enables the Company to take title to the RIN assigned to each gallon of ethanol or biodiesel produced. RINs are recorded as a reduction in cost of goods sold at the contracted sales price, in the period when the Company transfers the RIN. The Company does not record inventories on the balance sheet related to RINs, as they are acquired at no cost to the Company.
The Company includes in cost of goods sold the costs incurred to acquire fuel and merchandise, including excise taxes, less vendor allowances, vendor rebates and RINs. Warehousing costs are recorded within operating expenses on the condensed consolidated statements of income.

4.    Long-Term Debt and Finance Lease Obligations, Lines of Credit and Fair Value Disclosure
The fair value of the Company’s long-term debt (including current maturities) is estimated based on the current rates offered to the Company for debt of the same or similar issuances. The fair value of the Company’s long-term debt was approximately $1,348,000 and $1,437,000 at October 31, 2023 and April 30, 2023, respectively. The fair value calculated excludes finance lease obligations of $101,741 and $95,072 outstanding at October 31, 2023 and April 30, 2023, respectively, which are grouped with long-term debt on the condensed consolidated balance sheets.
Interest, net on the condensed consolidated statements of income is net of interest income of $4,476 and $8,052, for the three and six months ended October 31, 2023, and $1,356 for the three and six months ended October 31, 2022. Interest, net is also net of interest capitalized of $686 and $1,480, for the three and six months ended October 31, 2023, and $700 and $1,281, for the three and six months ended October 31, 2022, respectively.
Revolving Facility
The Company has a credit agreement that provides for an $850,000 unsecured revolving credit facility (“Revolving Facility”). Amounts borrowed under the Revolving Facility bear interest at variable rates based upon, at the Company’s option: (a) either Term SOFR or Daily Simple SOFR, in each case plus 0.10% (with a floor of 0.00%) for the interest period in effect, plus an applicable margin ranging from 1.10% to 1.70% or (b) an alternate base rate, which generally equals the highest of (i) the prime commercial lending rate announced by the Administrative Agent as its “prime rate”, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) Adjusted Daily Simple SOFR plus 1.00%, each plus an applicable margin ranging from 0.10% to 0.70% and each with a floor of 1.00%. The Revolving Facility carries a facility fee of 0.15% to 0.30% per annum. The applicable margins and facility fee, in each case, are dependent upon the Company’s quarterly Consolidated Leverage Ratio, as defined in the credit agreement. The Company had $0 outstanding under the Revolving Facility at October 31, 2023 and April 30, 2023.
Bank Line
The Company has an additional unsecured bank line of credit (the "Bank Line") with availability of up to $50,000. As of October 31, 2023, the availability under the Bank Line is encumbered by letters of credits totaling $432. The Bank Line bears interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate (the “Index”). There was $0 outstanding under the Bank Line at October 31, 2023 and April 30, 2023. The Bank Line is due upon demand.

5.    Compensation Related Costs and Share-Based Payments
The 2018 Stock Incentive Plan (the “2018 Plan”) was approved by the Company's shareholders on September 5, 2018. Awards under the 2018 Plan may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other equity-based and equity-related awards. Each share issued pursuant to a stock option and each share with respect to which a stock-settled stock appreciation right is exercised (regardless of the number of shares actually delivered) is counted as one share against the maximum limit under the 2018 Plan, and each share issued pursuant to an award of restricted stock or restricted stock units is counted as two shares against the maximum limit. Restricted stock is transferred immediately upon grant (and may be subject to a holding period), whereas restricted stock units have a vesting period that must expire, and in some cases performance or market conditions that must be satisfied before the stock is transferred. At October 31, 2023, there were 1,142,052 shares available for grant under the 2018 Plan.
We account for share-based compensation by estimating the grant date fair value of time-based and performance-based restricted stock unit awards using the closing price of our common stock on the applicable grant date, or the date on which performance goals for performance-based units are established, if after the grant date. Forfeitures are recognized as they occur.
The time-based awards most commonly vest ratably over a three-year period commencing on the first anniversary of the grant date. The performance-based awards represent a “target” amount; the final amount earned is based on the satisfaction of certain performance measures over a three-year performance period and will range from 0% to 200% of “target." Additionally, if the Company's relative total shareholder return over the performance period is in the bottom or
10

top quartile of the companies comprising the S&P 500, the performance-based shares included will be adjusted downward by 25%, or upward by 25%, respectively (the "TSR Modifier"). The fair value of the awards with the TSR Modifier is determined using a Monte Carlo simulation as of the date of the grant. For market-based awards, the share-based compensation expense will not be adjusted should the target awards vary from actual awards.
We recognize these amounts as an operating expense in our condensed consolidated statements of income ratably over the requisite service period using the straight-line method, as adjusted for certain retirement provisions, and updated estimates of shares to be issued under performance-based awards. All awards have been granted at no cost to the grantee.
Information concerning the unvested restricted stock units under the 2018 Plan is presented in the following table:
SharesWeighted-Average
Grant Date Fair
Value per Share
Unvested at April 30, 2023550,840 $212 
Granted138,046 236 
Vested(215,897)195 
Forfeited(15,753)225 
Unvested at October 31, 2023457,236 $227 
Total share-based compensation costs recorded for employees and non-employee directors for the six months ended October 31, 2023 and 2022, respectively, were $19,485 and $25,875, related entirely to restricted stock unit awards. As of October 31, 2023, there was $51,050 of unrecognized compensation costs related to restricted stock units which are expected to be recognized through fiscal 2027, with a weighted average remaining term of 1.4 years. The fair value of restricted stock unit awards vested for the six months ended October 31, 2023 was $48,496 as of the applicable vest date. No stock option awards have been granted under the 2018 Plan.

6.    Acquisitions
During the six months ended October 31, 2023, the Company acquired 60 stores through a variety of transactions, pursuant to the terms and conditions of the individual asset purchase agreements. The majority of these acquisitions meet the criteria to be considered business combinations. The purchase price of the stores were determined using a discounted cash flow model on a location by location basis, and was paid in cash upon closing using available cash on hand.
The acquisitions were recorded in the financial statements by allocating the purchase price to the assets acquired, including intangible assets, and liabilities assumed, based on their estimated fair values at the acquisition date as determined by third party appraisals or internal estimates. Fair values were determined using Level 3 inputs, which are unobservable inputs that are not corroborated by market data. The excess of the cost of the acquisition over the net amounts assigned to the fair value of the assets acquired and the liabilities assumed is recorded as goodwill if the acquisition is considered to be a business combination. Goodwill of $4,325 was recognized as the result of the current period acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies. All of the goodwill associated with these transactions will be deductible for income tax purposes over 15 years.
Acquisition-related transaction costs are recognized as period costs as incurred. The Company incurred total acquisition-related transaction costs of $3,053 for the six months ended October 31, 2023, which are recorded within operating expenses on the condensed consolidated statements of income.
The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. We utilized a third-party valuation specialist to assist in valuing the other assets, leases, and majority of the property and equipment acquired. The valuations are still in process and, as a result amounts related to certain property and equipment, other assets, goodwill, deferred income taxes, and leases is considered provisional and is subject to change.
11

Assets acquired:
Inventories$6,048 
Property and equipment119,713 
Deferred income taxes126 
Finance lease right-of-use assets1,263 
Operating lease right-of-use assets4,548 
Other assets250 
Goodwill4,325 
Total assets136,273 
Liabilities assumed:
Accrued expenses and other long-term liabilities447 
Finance lease liabilities1,893 
Operating lease liabilities4,388 
Total liabilities6,728 
Net assets acquired and total consideration paid$129,545 
Payments for acquisition of businesses, net of cash acquired, on the condensed consolidated statements of cash flows includes payments made for acquisitions that are closing shortly after the quarter-end. These payments are included in other assets, net of amortization on the condensed consolidated balance sheets. Such payments are not included in the total consideration paid in the table above, as those acquisitions have not yet closed as of the end of the quarter.
The Company recognized approximately $14,984 and, $17,568 of revenue related to the acquired locations in the condensed consolidated statements of income for the three and six months ended October 31, 2023, respectively. The amount of net income related to the acquired locations was not material for the three and six months ended October 31, 2023.
Pro Forma Information
The following unaudited pro forma information presents a summary of our consolidated results of operations as if the transactions referenced above occurred at the beginning of the first fiscal year of the periods presented (amounts in thousands, except per share data):
 Three Months Ended
October 31,
Six Months Ended
October 31,
 2023202220232022
Total revenue$4,113,565 $4,046,707 $8,043,200 $8,580,418 
Net income159,139 138,353 329,705 290,080 
Net income per common share
       Basic $4.27 $3.71 $8.85 $7.79 
       Diluted 4.25 3.69 8.80 7.74 

7.    Commitments and Contingencies
From time to time we may be involved in legal or administrative proceedings or investigations arising from the conduct of our business operations, including, but not limited to, contractual or other general business disputes; employment, personnel, or accessibility matters; personal injury and property damage claims; claims by federal, state, and local regulatory authorities relating to the sale of products pursuant to licenses and permits issued by those authorities; and, other claims or proceedings. Claims for damages in those actions may be substantial. While the outcome of such litigation, proceedings, investigations, or claims is never certain, it is our opinion, after taking into consideration legal counsel’s assessment and the availability of insurance proceeds and other collateral sources to cover potential losses, that the ultimate disposition of such matters currently pending or threatened, individually or cumulatively, will not have a material adverse effect on our consolidated financial position and results of operations.
The Company is named as a defendant in a lawsuit filed in the United States District Court for the Northern District of Indiana, titled McColley v. Casey’s General Stores, Inc., in which the plaintiff alleges that the Company misclassified its Store Managers as exempt employees under the Fair Labor Standards Act (FLSA). The complaint seeks unpaid wages,
12

liquidated damages and attorneys’ fees for the plaintiff and all similarly situated Store Managers who worked at the Company from February 16, 2015 to the present. On March 31, 2021, the Court granted conditional certification, and to-date, approximately 1,400 current and/or former Store Managers (representing less than 1/4 of those eligible) remain opted-in to participate in the lawsuit. The Company believes that adequate provisions have been made for probable losses related to this matter, and that those, and the reasonably possible losses in excess of amounts accrued, where such range of loss can be estimated, are not material to the Company’s financial position, results of operations or cash flows. The Company believes that its Store Managers are properly classified as exempt employees under the FLSA and it intends to continue to vigorously defend the matter.
We have entered into various purchase agreements related to our fuel supply, which include varying volume commitments. Prices included in the purchase agreements are indexed to market prices. While volume commitments are included in the contracts, we do not have a history of incurring material penalties related to these provisions. These contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.
We have entered into forward contracts for cheese in order to fix the price per pound for a portion of our expected supply. As of October 31, 2023, the forward contracts run through April 2024. The commitment under these contracts is approximately $38,315. These contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.

8.    Unrecognized Tax Benefits
The total amount of gross unrecognized tax benefits was $12,871 and $10,957 at October 31, 2023 and April 30, 2023, respectively. If this unrecognized tax benefit were ultimately recognized, $10,168 is the amount that would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was $515 at October 31, 2023, and $386 at April 30, 2023. Net interest and penalties included in income tax expense for the six months ended October 31, 2023, was a net expense of $129 and a net expense of $112 for the same period in 2022.
A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the expiration of the statute of limitations, examinations or other unforeseen circumstances. The Company has no ongoing federal or state income tax examinations. At this time, the Company’s best estimate of the reasonably possible change in the amount of the gross unrecognized tax benefits is a decrease of $2,500 during the next twelve months mainly due to the expiration of certain statute of limitations.
The federal statute of limitations remains open for the tax years 2019 and forward. Tax years 2018 and forward are subject to audit by state tax authorities depending on open statute of limitations waivers and the tax code of each state.

9.    Segment Reporting
As of October 31, 2023, we operated 2,592 stores in 16 states. Our convenience stores offer a broad selection of merchandise, fuel and other products and services designed to appeal to the convenience needs of our guests. We manage the business on the basis of one operating segment and therefore, have only one reportable segment. Our stores sell similar products and services, use similar processes to sell those products and services, and sell their products and services to similar classes of guests. We make specific disclosures concerning the three broad categories of fuel, grocery and general merchandise, and prepared food and dispensed beverage because it allows us to more effectively discuss trends and operational initiatives within our business and industry. Although we can separate revenues and cost of goods sold within these categories (and further sub-categories), the operating expenses associated with operating a store that sells these products are not separable by these three categories.
13

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in Thousands).
Overview
As of October 31, 2023, Casey’s General Stores, Inc. and its direct and indirect wholly-owned subsidiaries operate convenience stores primarily under the names "Casey's" and "Casey’s General Store" (collectively, with the stores below referenced as "GoodStop", "Bucky's" or "Minit Mart", referred to as "Casey's" or the "Company") throughout 16 states, over half of which are located in Iowa, Missouri and Illinois. Subsequent to quarter-end, the Company closed on an acquisition in which it entered its 17th state, Texas. Approximately 49% of all Casey's were opened in areas with populations of fewer than 5,000 persons, while approximately 27% of all stores were opened in communities with populations exceeding 20,000 persons. As of October 31, 2023, there were a total of 2,592 stores in operation.
All convenience stores carry a broad selection of food items (including, but not limited to, freshly prepared foods such as regular and breakfast pizza, donuts, hot breakfast items, and hot and cold sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products, and other nonfood items. As of October 31, 2023, 225 store locations offered car washes. In addition, all but eight store locations offer fuel for sale on a self-service basis.
The Company had 48 stores operate under the "GoodStop (by Casey’s)" brand as of October 31, 2023. Similar to most of our store footprint, the "GoodStop" locations offer fuel for sale on a self-serve basis, and a broad selection of snacks, beverages, tobacco products, and other essentials. However, these locations typically do not have a kitchen and have limited prepared food offerings.
The Company is also temporarily operating certain locations acquired from Buchanan Energy under the name "Bucky's" and certain locations acquired from Minit Mart LLC under the name "Minit Mart". The Company is in the process of transitioning all "Bucky's" and "Minit Mart" locations to either the "Casey's" or "GoodStop" brand. These locations typically have similar offerings to the "Casey’s" or "GoodStop" branded stores.
The Company has 76 dealer locations, where Casey’s manages fuel wholesale supply agreements to these stores. These locations are not operated by Casey's and are not included in our overall store count in the paragraph below. Approximately 1% of total revenue for the six-months ended October 31, 2023 relates to this dealer network.
The Company operates three distribution centers, through which certain grocery and general merchandise and prepared food and dispensed beverage items are supplied to our stores. One distribution center is adjacent to our corporate headquarters, which we refer to as the Store Support Center facility in Ankeny, Iowa. The other two distribution centers are located in Terre Haute, Indiana (opened in February 2016) and Joplin, Missouri (opened in April 2021).
The Company’s business is seasonal, and generally experiences higher sales and profitability during the first and second fiscal quarters (May-October), when guests tend to purchase greater quantities of fuel and certain convenience items such as beer, sports drinks, water, soft drinks and ice.
The Company reported diluted earnings per common share of $4.24 for the second quarter of fiscal 2024. For the same quarter a year-ago, diluted earnings per common share was $3.67.
The following table represents the roll forward of store growth through the second quarter of fiscal 2024:
Store Count
Total stores at April 30, 20232,521 
New store construction13 
Acquisitions60 
Acquisitions not opened(5)
Prior acquisitions opened
Closed(2)
Total stores at October 31, 20232,592 
COVID-19 and Related Impacts
The onset of COVID-19 caused a significant decrease in store traffic across our entire footprint. While store traffic has markedly increased as the economy reopened over the past two or so years, the Company has not seen a full return to store traffic levels experienced prior to the pandemic. The Company believes this is due to the increased prevalence and acceptance across all industries of working from home, a trend which the Company expects to continue into the foreseeable future.
14


Fuel Volatility
Since early calendar 2020, the price of crude oil, and in turn the wholesale cost of fuel, has been volatile compared to historical averages. Initially, at the outset of the pandemic, oil and fuel prices fell dramatically; however, as the economy in general began to emerge from the COVID-19 pandemic, prices began to modestly increase over time. More recently, during the end of the Company’s 2022 fiscal year, oil and fuel prices saw a quick and dramatic increase, in part, as a result of the conflict in Ukraine, as well as other macroeconomic conditions. Generally, oil and fuel prices have decreased from levels seen throughout the past two years, but they remain elevated compared to historical levels. The Company expects these comparatively higher prices to remain further into the 2024 fiscal year.
In addition, during the past three calendar years, the Company, and the retail fuel industry as a whole, has experienced historically high average revenue less cost of goods sold per gallon (excluding depreciation and amortization). Although this has remained relatively consistent since that time, on a longer-term basis, this metric can fluctuate significantly, and sometimes unpredictably, in the short-term. While the Company believes that its average revenue less cost of goods sold per gallon (excluding depreciation and amortization) will remain elevated from historical levels for the foreseeable future, it is possible that increased oil and fuel prices, rising interest rates, macroeconomic conditions and/or continuing conflicts or disruptions involving oil producing countries may materially impact the performance of this metric.
Electric Vehicles and Renewable Fuels
Casey's continues its process of developing a robust electric vehicle ("EV") strategy and our management team remains committed to understanding if and how the increased demand for, and usage of, EVs impacts consumer behavior across our store footprint and beyond. As consumer demand for alternative fuel options continues to grow, Casey’s has continued to add EV charging stations across our 16-state footprint. As of October 31, 2023, the Company has installed 162 charging stations at 33 stores, across 11 states. Our installation strategy is currently designed to selectively increase our charging stations at locations within our region where we see higher levels of consumer EV buying trends and demand for EV charging. To date, consumer EV demand within our Midwest footprint has been comparatively lower than the levels along the coasts. As EV demand from our guests increases, we are prepared to strategically integrate charging station options at select stores.
The Company also remains committed to offering renewable fuel options at our stores and continues to expand its alternative fuel options in response to evolving guest needs and as part of its environmental stewardship efforts. Currently, almost all of our stores offer fuel with at least 10% of blended ethanol and 43% of our stores offer biodiesel. Every new store has the capability to sell higher blended ethanol, and we aim to continue growing sales of renewable fuels throughout our footprint.
Same-Store Sales
Same-store sales is a common metric used in the convenience store industry. We define same-store sales as the total sales increase (or decrease) for stores open during the full time of both periods being presented. When comparing data, the store must be open for each entire fiscal period being compared. Remodeled stores that remained open or were closed for just a very brief period of time (i.e., less than a week) during the period being compared remain in the same-store sales comparison. If a store is replaced, either at the same location (i.e., razed and rebuilt) or relocated to a new location, it is removed from the comparison until the new store has been open for each entire period being compared. Newly constructed and acquired stores do not enter the calculation until they are open for each entire period being compared.
The second quarter results reflected flat same-store fuel gallons sold. Same-store sales of grocery and general merchandise increased 1.7% and prepared food and dispensed beverage increased 6.1% during the quarter. The increase in grocery and general merchandise same-store sales was primarily due to strong sales of alcoholic beverages. The increase in prepared food and dispensed beverage same-store sales was attributable to improved sales of whole pizza pies, bakery, and dispensed beverages.
15

Three Months Ended October 31, 2023 Compared to
Three Months Ended October 31, 2022
(Dollars and Amounts in Thousands)
 
Three Months Ended October 31, 2023Prepared Food & Dispensed BeverageGrocery & General
Merchandise
FuelOtherTotal
Revenue$382,481 $964,430 $2,646,478 $71,011 $4,064,400 
Revenue less cost of goods sold (excluding depreciation and amortization)$225,664 $327,600 $308,835 $23,462 $885,561 
59.0 %34.0 %11.7 %33.0 %21.8 %
Fuel gallons sold730,439 
Three Months Ended October 31, 2022Prepared Food & Dispensed BeverageGrocery & General
Merchandise
FuelOtherTotal
Revenue$351,260 $917,176 $2,635,920 $74,219 $3,978,575 
Revenue less cost of goods sold (excluding depreciation and amortization)$199,224 $305,250 $284,407 $22,061 $810,942 
56.7 %33.3 %10.8 %29.7 %20.4 %
Fuel gallons sold702,043 
Total revenue for the second quarter of fiscal 2024 increased by $85,825 (2.2%) over the comparable period in fiscal 2023. Total revenues were impacted favorably by operating 129 more stores than a year ago. Retail fuel sales increased by $10,558 (0.4%) as the number of gallons sold increased by 28,396 (4.0%), which was offset by a decrease in the average retail price per gallon of fuel of 3.5%. During this same period, retail sales of grocery and general merchandise increased by $47,254 (5.2%), due to strong sales of non-alcoholic and alcoholic beverages. Prepared food and dispensed beverage sales increased by $31,221 (8.9%), due to improved sales of whole pizza pies, bakery, and dispensed beverages.
The other revenue category primarily consists of activity related to car wash revenue and the wholesale fuel revenue from the dealer network, which are both presented gross of applicable costs, as well as lottery, which is presented net of applicable costs. Other revenues decreased $3,208 (4.3%) for the second quarter of fiscal 2024 compared to the prior year, driven primarily by a decrease in wholesale fuel prices.
Revenue less cost of goods sold (excluding depreciation and amortization) was 21.8% of revenue for the second quarter of fiscal 2024, compared to 20.4% for the comparable period in the prior year. Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was 34.0% of revenue for the second quarter of fiscal 2024, compared to 33.3% for the comparable period in the prior year. The current year percentage was positively impacted by increased sales of private label products. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 59.0% of revenue, compared to 56.7% of revenue for the comparable period in the prior year, primarily due to softening ingredient costs.
Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was 11.7% of fuel revenue during the second quarter of fiscal 2024, compared to 10.8% for the comparable period in the prior year. Revenue per gallon less cost of goods sold (exclusive of depreciation and amortization) per gallon increased to 42.3 cents in the second quarter of fiscal 2024, compared to 40.5 cents for the comparable period in the prior year. The Company sold 6.9 million RINs [renewable identification numbers] for $8,429 during the quarter, compared to the sale of 6.4 million RINs in the second quarter of the prior year, which generated $11,080 (see footnote 3, above, for a further description of RINs and how they are generated).
Operating expenses increased $40,496 (7.5%) in the second quarter of fiscal 2024 from the comparable period in the prior year. Over 3% of the increase is due to operating 129 more stores than the comparable period in the prior year. Total same-store employee expense contributed to 1% of the increase, as the increase in labor rate was partially offset by a reduction in same-store labor hours. The Company also incurred higher variable incentive compensation, repair, maintenance, and insurance expense that made up 2% of the increase.
Depreciation and amortization expense increased by 9.6% to $85,598 in the second quarter of fiscal 2024 from $78,117. The increase was primarily due to operating 129 more stores than a year ago and capital expenditures during the previous twelve months.
16

Interest, net decreased by 8.9% to $12,306 in the second quarter of fiscal 2024 from $13,502. The decrease was primarily attributable to an increase in interest income due to an increase in market interest rates and average cash and cash equivalents on hand throughout the period, partially offset by increased interest expense on variable rate debt.
The effective tax rate was 23.6% in the second quarter of fiscal 2024 which is consistent with that of the same period of fiscal 2023. Both years include a similar one-time benefit from adjusting the Company’s deferred tax assets and liabilities for state law changes enacted during the quarter.
Net income increased by $21,227 (15.4%) to $158,782 from $137,555 in the comparable period in the prior year. The increase in net income was primarily attributable to higher profitability both inside the store and higher fuel margin, partially offset by increases in operating expenses and depreciation and amortization. See discussion in the paragraphs above for the primary drivers for each of these changes.
Six Months Ended October 31, 2023 Compared to
Six Months Ended October 31, 2022
(Dollars and Amounts in Thousands)
Six Months Ended October 31, 2023Prepared Food & Dispensed BeverageGrocery & 
General Merchandise
FuelOtherTotal
Revenue$755,294 $1,961,366 $5,073,811 $143,180 $7,933,651 
Revenue less cost of goods sold (excluding depreciation and amortization)$442,525 $667,173 $605,813 $47,804 $1,763,315 
58.6 %34.0 %11.9 %33.4 %22.2 %
Fuel gallons sold1,444,429 
Six Months Ended October 31, 2022Prepared Food & Dispensed BeverageGrocery & 
General Merchandise
FuelOtherTotal
Revenue$694,813 $1,840,240 $5,732,262 $165,904 $8,433,219 
Revenue less cost of goods sold (excluding depreciation and amortization)$390,177 $618,557 $592,595 $45,863 $1,647,192 
56.2 %33.6 %10.3 %27.6 %19.5 %
Fuel gallons sold1,391,510 
Total revenue for the first six months of fiscal 2024 decreased by $499,568 (5.9%) over the comparable period in fiscal 2023. Total revenues were impacted favorably by operating 129 more stores than a year ago. Retail fuel sales decreased by $658,451 (11.5%) as the average retail price per gallon decreased 14.7%, partially offset by an increase in the number of gallons sold by 52,919 (3.8%). During this same period, retail sales of grocery and general merchandise increased by $121,126 (6.6%) due to strong sales of non-alcoholic and alcoholic beverages, snacks, and candy. Prepared food and dispensed beverage sales increased by $60,481 (8.7%) due to improved sales of hot sandwiches, whole pizza pies, bakery, and dispensed beverages.
The other revenue category primarily consists of activity related to car wash revenue and the wholesale fuel revenue from the dealer network, which are both presented gross of applicable costs, as well as lottery, which is presented net of applicable costs. Other revenues decreased $22,724 (13.7%) for the first six months of fiscal 2024 compared to the prior year, driven primarily by a decrease in wholesale fuel prices.
Revenue less cost of goods sold (excluding depreciation and amortization) was 22.2% of revenue for the first six months of fiscal 2024, compared to 19.5% for the comparable period in the prior year. Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 34.0% of grocery and general merchandise revenue, compared to 33.6% in the prior year. The current year percentage was positively impacted by increased sales of private label products. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 58.6% of revenue, compared to 56.2% in the prior year, primarily due to softening ingredient costs, as well as changes in the digital box top program.
Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was 11.9% of fuel revenue for the first six months of fiscal 2024, compared to 10.3% for the first six months of the prior year. Revenue per gallon less cost of goods sold (exclusive of depreciation and amortization) per gallon was 41.9 cents for the first six months of fiscal 2024 compared to 42.6 cents in the prior year. The Company sold 19.7 million RINs [renewable identification numbers] for $28,626
17

during the six months of fiscal 2024, compared to the sale of 17.0 million RINs in the prior year, which generated $28,756 (see footnote 3, above, for a further description of RINs and how they are generated).
Operating expenses increased by $58,080 (5.4%) in the first six months of fiscal 2024 from the comparable period in the prior year. Approximately 3% of the increase is due to operating 129 more stores than the comparable period in the prior year. Total same-store employee expense contributed to 0.5% of the increase, as the increase in labor rate was partially offset by a reduction in same-store labor hours. The Company also incurred higher same-store repairs and maintenance expense that made up 1.1% of the increase.
Depreciation and amortization expense increased 9.1% to $168,503 for the first six months of fiscal 2024 from $154,412 for the comparable period in the prior year. The increase was primarily due to operating 129 more stores than a year ago and capital expenditures during the previous twelve months.
Interest, net decreased by 9.2% to $24,801 for the first six months of fiscal 2024 from $27,318. The decrease was primarily attributable to an increase in interest income due to an increase in market interest rates and average cash and cash equivalents on hand throughout the period, partially offset by increased interest expense on variable rate debt.
The effective tax rate decreased to 23.6% in the first six months of the fiscal year compared to 24.2% in the same period of the prior fiscal year. The decrease in the effective tax rate was primarily due to one-time benefits from adjusting the Company’s deferred tax assets and liabilities for state law changes enacted during the year.
Net income increased by $37,532 (12.9%) to $328,019 from $290,487 in the prior year. The increase in net income was primarily attributable to higher profitability inside the store and higher fuel margin, partially offset by increases in operating expenses and depreciation and amortization. See discussion in the paragraphs above for the primary drivers for each of these changes.
Use of Non-GAAP Measures
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 management 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 six months ended October 31, 2023 and 2022:
 Three months endedSix months ended
 October 31, 2023October 31, 2022October 31, 2023October 31, 2022
Net income$158,782 $137,555 $328,019 $290,487 
Interest, net12,306 13,502 24,801 27,318 
Federal and state income taxes49,172 42,561 101,434 92,497 
Depreciation and amortization85,598 78,117 168,503 154,412 
EBITDA$305,858 $271,735 $622,757 $564,714 
Loss (gain) on disposal of assets and impairment charges1,216 4,561 (232)4,791 
Adjusted EBITDA$307,074 $276,296 $622,525 $569,505 
For the three months ended October 31, 2023, EBITDA and Adjusted EBITDA increased 12.6% and 11.1%, respectively, when compared to the same period a year ago. For the six months ended October 31, 2023, EBITDA and Adjusted EBITDA increased 10.3% and 9.3%, respectively, when compared to the same period a year ago. The increase in EBITDA and
18

Adjusted EBITDA was primarily attributable to higher profitability inside the store and higher fuel margin, which was partially offset by higher operating expenses. See discussion in the preceding sections for the primary drivers for each of these individual changes.
Critical Accounting Policies
Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company’s financial condition and results of operations. The Company's critical accounting policies are described in the Form 10-K for the year ended April 30, 2023, and such discussion is incorporated herein by reference. There have been no changes to these policies in the six months ended October 31, 2023.
Liquidity and Capital Resources
Due to the nature of the Company’s business, cash provided by operations is the Company’s primary source of liquidity. The Company finances its inventory purchases primarily from normal trade credit aided by the relatively rapid turnover of inventory. This turnover allows the Company to conduct its operations without large amounts of cash and working capital. As of October 31, 2023, the Company’s ratio of current assets to current liabilities was 1.06 to 1. The ratio at October 31, 2022 and April 30, 2023 was 1.08 to 1 and 0.99 to 1, respectively. The decrease in the ratio from October 31, 2022 is due primarily to the timing of debt payments, with an increase in current maturities at October 31, 2023. The increase in the ratio from April 30, 2023 is primarily attributable to an increase in cash and cash equivalents due to strong free cash flows.
Management believes that the net availability under the Bank Line of approximately $49,568 and the Revolving Facility of $850,000, combined with the current cash and cash equivalents and the future cash flow from operations will be sufficient to satisfy the working capital needs of our business.
Net cash provided by operating activities decreased $4,319 for the six months ended October 31, 2023 from the comparable period in the prior year. Cash flows from operating activities was impacted by an increase in net income adjusted for non-cash reconciling items (depreciation and amortization, amortization of debt issuance costs, change in excess replacement cost over LIFO inventory valuation, share-based compensation, and (gain) loss on disposal of assets and impairment charges) of approximately $31,093. Refer to "Six Months Ended October 31, 2023 Compared to Six Months Ended October 31, 2022" on page 17 for further details on the primary driver for these changes. This increase was offset by the changes in components of assets and liabilities. Cash provided by operations can be impacted by variability in the timing of payments and receipts for certain assets and liabilities, as well as changes in commodity costs year-over-year. The largest impacts from the changes in assets and liabilities are as follows:
Impacts from changes in inventories decreased operating cash flows by $30,810, attributable to an increase in inventory quantities on hand at the end of the second quarter of fiscal 2024, compared to the prior year.
Impacts due to changes in accrued expenses decreased operating cash flows by $27,149 in comparison to prior year, primarily due to timing of vendor payments, changes in the digital box top program, and impacts from wage related accruals.
Impacts from changes in income tax related balances reduced operating cash flows by $24,715 primarily attributable to applying a higher outstanding income tax receivable to reduce our estimated tax payments for the first six months of fiscal 2023, compared to fiscal 2024.
The above decreases in operating cash flows was partially offset by impacts from changes in receivables of $27,566 primarily due to the timing of vendor rebate payments during the comparable periods.
Cash used in investing activities increased $137,056. During the first six months of fiscal 2024, the Company expended $315,314 for purchases of property and equipment and payments for acquisitions compared to $180,019 for the comparable period in the prior year related to these activities. The increase in cash used in investing activities was largely attributable to an increase in acquisition related activity compared to the prior year. Purchases of property and equipment and payments for acquisitions of businesses typically represent the single largest use of excess Company funds. Management believes that by acquiring, building, and reinvesting in stores, the Company will be better able to drive long-term shareholder value.
Cash used in financing increased $83,523, primarily due to the repurchase and retirement of common stock under our share repurchase program for a total of $59,491, as well as an increase in debt payments compared to the comparable period in fiscal 2023.
19

As of October 31, 2023, the Company had long-term debt consisting of:
Finance lease liabilities$101,741 
3.67% Senior notes (Series A) due in 7 installments beginning June 17, 2022, and ending June 15, 2028111,000 
3.75% Senior notes (Series B) due in 7 installments beginning December 17, 2022 and ending December 18, 202845,000 
3.65% Senior notes (Series C) due in 7 installments beginning May 2, 2025 and ending May 2, 203150,000 
3.72% Senior notes (Series D) due in 7 installments beginning October 28, 2025 and ending October 28, 203150,000 
3.51% Senior notes (Series E) due June 13, 2025150,000 
3.77% Senior notes (Series F) due August 22, 2028250,000 
2.85% Senior notes (Series G) due August 7, 2030325,000 
2.96% Senior notes (Series H) due August 6, 2032325,000 
Variable rate term loan facility, requiring quarterly installments ending April 21, 2028243,750 
Less debt issuance costs(1,539)
1,649,952 
Less current maturities(53,166)
$1,596,786 
The Company has funded purchases of property and equipment and payments for acquisitions of businesses primarily from the issuance of debt, existing cash, and funds generated from operations. Future capital needs required to finance operations, improvements and the anticipated growth in the number of stores are expected to be met from cash generated by operations, the Revolving Facility, the Bank Line, and additional long-term debt or other securities as circumstances may dictate, and are not expected to adversely affect liquidity.
20


Cautionary Statements
This Form 10-Q, including the foregoing Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. The words “may,” “will,” "should," “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “continue,” and similar expressions are used to identify forward-looking statements. Forward-looking statements represent the Company’s current expectations or beliefs concerning future events and trends that we believe may affect our financial condition, liquidity and related sources and needs, supply chain, results of operations and performance at our stores, business strategy, strategic plans, growth opportunities, integration of acquisitions, acquisition synergies, short-term and long-term business operations and objectives including our long-term strategic plan, wholesale fuel, inventory and ingredient costs and the potential effects of the conflict in Ukraine and COVID-19 on our business. 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 limitation, the following risk factors described more completely in the Company’s Form 10-K for the fiscal year ended April 30, 2023:
Business Operations; Our business and our reputation could be adversely affected by a cyber or data security incident or the failure to protect sensitive guest, Team Member or supplier data, or the failure to comply with applicable regulations relating to data security and privacy; food-safety issues and foodborne illnesses, whether actual or reported, or the failure to comply with applicable regulations relating to the transportation, storage, preparation or service of food, could adversely affect our business and reputation; we may be adversely impacted by increases in the cost of food ingredients and other related costs; a significant disruption to our distribution network, to the capacity of the distribution centers, or timely receipt of inventory could adversely impact our sales or increase our transaction costs, which could have a material adverse effect on our business; we could be adversely affected if we experience difficulties in, or are unable to recruit, hire or retain, members of our leadership team and other distribution, field and store Team Members; any failure to anticipate and respond to changes in consumer preferences, or to introduce and promote innovative technology for guest interaction, could adversely affect our financial results; we rely on our information technology systems, and a number of third-party software providers, to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business; increased credit card expenses could lead to higher operating expenses and other costs for the Company; our operations present hazards and risks which may not be fully covered by insurance, if insured; the dangers inherent in the storage and transport of fuel could cause disruptions and could expose to us potentially significant losses, costs or liabilities; consumer or other litigation could adversely affect our financial condition and results of operations; pandemics or disease outbreaks, such as COVID-19, responsive actions taken by governments and others to mitigate their spread, and guest behavior in response to these events, have, and may in the future, adversely affect our business operations, supply chain and financial results; and, covenants in our Senior Notes and credit facility agreements require us to comply with certain covenants and meet financial maintenance tests and the failure to comply with these requirements could have a material impact to us.
Governmental Actions, Regulations, and Oversight: Compliance with and changes in tax laws could adversely affect our performance; we are subject to extensive governmental regulations; governmental action and campaigns to discourage tobacco and nicotine use and other tobacco products may have a material adverse effect on our revenues and gross profit; and, wholesale cost and tax increases relating to tobacco and nicotine products could affect our operating results.
Industry: General economic and political conditions that are largely out of the Company’s control may adversely affect the Company’s financial condition and results of operations; developments related to fuel efficiency, fuel conservation practices, climate change, and changing consumer preferences may decrease the demand for motor fuel; unfavorable weather conditions can adversely affect our business; the volatility of wholesale petroleum costs could adversely affect our operating results; and, the convenience store industry is highly competitive.
Growth Strategies: We may not be able to identify, acquire, and integrate new properties and stores, which could adversely affect our ability to grow our business.
Common Stock: The market price for our common stock has been and may in the future be volatile, which could cause the value of your investment to decline; any issuance of shares of our common stock in the future could have a dilutive effect on your investment; and, Iowa law and provisions in our charter documents may have the effect of preventing or hindering a change in control and adversely affecting the market price of our common stock.
We further caution you that other factors we have not identified may in the future prove to be important in affecting our business and results of operations. We ask you not to place undue reliance on any forward-looking statements because they speak only of our views as of the statement dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
21


Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company’s exposure to market risk for changes in interest rates relates primarily to our investment portfolio and floating rate long-term debt obligations. We place our investments with high-quality credit issuers and, by policy, limit the amount of credit exposure to any one issuer. Our first priority is to attempt to reduce the risk of principal loss. Consequently, we seek to preserve our invested funds by limiting default risk, market risk, and reinvestment risk. We attempt to mitigate default risk by investing in only high-quality credit securities that we believe to be low risk and by positioning our 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. Based upon the outstanding balance of the Company's term loan facility as of October 31, 2023, an immediate 100-basis-point move in interest rates would have an approximate annualized impact of $2.4 million on interest expense.
We do from time to time, participate in a forward buy of certain commodities. These contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 240.13a-15(e)). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
Changes in Internal Controls Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the quarter ended October 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this Item is set forth in Note 7 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q and is incorporated herein by this reference.
Item 1A. Risk Factors
There have been no material changes in our “risk factors” from those previously disclosed in our 2023 Annual Report on Form 10-K.
22


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information with respect to the Company's repurchases of common stock during the quarter ended October 31, 2023:
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
Second Quarter
August 1 - August 31, 2023— $— — $370,109,397 
September 1 - September 30, 202355,280 278.14 55,280 354,734,050 
October 1 - October 31, 202355,201 269.86 55,201 339,837,310 
Total110,481 $274.00 110,481 $339,837,310 
On, and effective as of, March 3, 2022, the Board authorized a share repurchase program, whereby the Company was authorized to repurchase its outstanding common stock from time-to-time, for an aggregate amount of up to $400 million, exclusive of fees, commissions or other expenses (the "Repurchase Program"). The Repurchase Program has no set expiration date. The timing and number of repurchase transactions under the Repurchase Program depends on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements. The Repurchase Program can be suspended or discontinued at any time. During the second quarter of 2024, we repurchased and retired 110,481 shares of our common stock under our share repurchase program for a total of $30.3 million, net of fees, commissions and other expenses. As of October 31, 2023, $339.8 million remained available for future purchases under this share repurchase program.
23

Item 6. Exhibits.
Exhibit
No.
Description
3.1
3.2
31.1*
31.2*
32.1*
32.2*
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
101. DEFXBRL Taxonomy Extension Definition Linkbase Document
* Filed herewith
24

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, 2023By: /s/ Stephen P. Bramlage Jr.
Stephen P. Bramlage Jr.
Its:Chief Financial Officer
(Authorized Officer and Principal
Financial and Accounting Officer)
25