Casey’s(CASY) - 2025 Q4 - Annual Report

Part I Business The company operates 2,904 convenience stores focused on prepared foods and fuel, recently expanding through the major acquisition of Fikes Wholesale - As of April 30, 2025, the Company operates 2,904 convenience stores across 20 states, with approximately 71% located in areas with populations under 20,000[13][14] - On November 1, 2024, Casey's acquired Fikes Wholesale, adding 198 stores, including its first locations in Alabama, Florida, and Mississippi, and its first fuel terminal in Waco, Texas[13] - Prepared food and grocery/general merchandise items, while representing about 34% of total revenue over the last three fiscal years, have generated approximately 63% of the revenue less cost of goods sold[28] - The Casey's Rewards loyalty program has grown to over 9 million members, allowing customers to earn points for fuel discounts, Casey's Cash, or donations to local schools[31] - As of April 30, 2025, the company employed 23,338 full-time and 25,934 part-time team members[42] Retail Fuel Operations Summary (FY2023-FY2025) | Fiscal Year | Gallons Sold (thousands) | Total Retail Fuel Revenue ($ thousands) | % of Total Revenue | Avg. Cents Per Gallon Margin | | :--- | :--- | :--- | :--- | :--- | | 2025 | 3,196,852 | $9,776,033 | 61.3% | 38.68¢ | | 2024 | 2,828,669 | $9,402,071 | 63.3% | 39.48¢ | | 2023 | 2,672,366 | $10,027,310 | 66.4% | 40.22¢ | Risk Factors The company faces significant operational, regulatory, industry, and strategic risks, including cybersecurity, supply chain, and competition - A cyber or data security incident could lead to significant financial loss, litigation, and reputational damage[59][60] - The business is exposed to commodity price fluctuations, particularly for cheese and proteins, which could adversely affect profitability[62] - Difficulties in recruiting and retaining qualified team members, especially drivers and hourly store staff, could materially impact operations[66][67] - The volatility of wholesale petroleum costs significantly affects operating results, as fuel sales accounted for approximately 64% of total revenue[92] - The convenience store industry is highly competitive, with pressure from other convenience chains, supermarkets, and fast-food outlets[93] - The growth strategy faces risks related to identifying and integrating acquisitions, including potential difficulties with financing and operational systems[95] Unresolved Staff Comments The company reports that there are no unresolved staff comments - Not applicable[103] Cybersecurity The company maintains a comprehensive cybersecurity program overseen by the Board's Audit Committee and has had no material incidents to date - The Board's Audit Committee provides oversight of cybersecurity risk, with regular updates from the CIO and CISO[104] - The company's information security program is based on recognized frameworks like the NIST CSF and PCI DSS[105] - A formal Cybersecurity Incident Response Plan and a cross-functional team are in place to manage potential security events[107] - To date, no cybersecurity incidents have resulted in a material adverse effect on the company's business, financial condition, or operations[108] Properties The company owns the majority of its real estate, including its corporate headquarters, distribution centers, and most of its store locations - The company owns its corporate headquarters, three distribution centers, and a fuel terminal[109] - As of April 30, 2025, the company leased the land and/or building for 245 of its store locations, with the remainder being owned[110] Legal Proceedings Information regarding legal proceedings is incorporated by reference from the financial statement notes - The required information is incorporated by reference from Note 10 to the Consolidated Financial Statements[111] Mine Safety Disclosures The company reports that this item is not applicable - Not applicable[112] Part II Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Casey's common stock (NASDAQ: CASY) features a growing dividend and an active share repurchase program - The company's common stock trades on the Nasdaq Global Select Market under the symbol CASY[114] - Dividends declared in fiscal 2025 totaled $2.00 per share, up from $1.72 per share in fiscal 2024[116] - As of April 30, 2025, $295.1 million remained available under the company's $400 million share repurchase program[119] - No shares of common stock were repurchased during the fourth quarter ended April 30, 2025[118] [Reserved] This item is not applicable - Not applicable[120] Management's Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2025 revenue and net income grew significantly, driven by the Fikes acquisition, despite higher operating expenses and increased debt - Store count grew by a net 246 stores in fiscal 2025, from 2,658 to 2,904, primarily through acquisitions and new constructions[126] - Operating expenses increased by 11.5% ($263.8M), with approximately 10% of the increase due to operating more stores and acquisition costs[135] - Net cash provided by operating activities increased by $197.9M to $1.09 billion in FY2025, driven by improved profitability[160] - The company used proceeds from $1.1 billion in new long-term debt to partially fund the Fikes acquisition[162] Fiscal 2025 vs. Fiscal 2024 Performance | Metric | Fiscal 2025 | Fiscal 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $15,940.9M | $14,862.9M | +7.3% | | Net Income | $546.5M | $502.0M | +8.9% | | Diluted EPS | $14.64 | $13.43 | +9.0% | | EBITDA (Non-GAAP) | $1,200.0M | $1,059.4M | +13.3% | FY2025 Same-Store Sales Growth | Category | Same-Store Sales Growth | | :--- | :--- | | Prepared food and dispensed beverage | +3.5% | | Grocery and general merchandise | +2.3% | | Fuel gallons sold | +0.1% | Quantitative and Qualitative Disclosures about Market Risk The company's primary market risks are interest rate fluctuations on its variable-rate debt and volatility in fuel prices - The primary market risk exposure is from interest rate changes on floating-rate long-term debt[180] - A 100-basis-point (1%) increase in interest rates would result in an approximate $10.2 million annualized increase in interest expense[180] - The company uses futures contracts to economically hedge price risk on bulk fuel stored in terminals and pipelines[181] Financial Statements and Supplementary Data The audited financial statements reflect significant growth due to the Fikes acquisition, with an unqualified audit opinion from KPMG LLP - The independent auditor, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and internal controls[184][201] - Critical audit matters identified were the valuation of merchandise inventory and the fair value of real property acquired in the Fikes business combination[189][194] - The Fikes acquisition on Nov 1, 2024, for a purchase price of $1.17 billion, resulted in the recognition of $577.7 million in goodwill[241][242][243] - The company operates as a single reportable segment, with the CODM assessing performance based on consolidated profitability metrics[297][298] Consolidated Balance Sheet Highlights (as of April 30) | Account | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $1,012,853 | $829,854 | | Net Property and Equipment | $5,413,244 | $4,669,357 | | Goodwill | $1,244,893 | $652,663 | | Total Assets | $8,208,118 | $6,347,433 | | Total Current Liabilities | $1,101,693 | $953,466 | | Long-Term Debt & Leases | $2,413,620 | $1,582,758 | | Total Liabilities | $4,699,448 | $3,332,052 | | Total Shareholders' Equity | $3,508,670 | $3,015,381 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[301] Controls and Procedures Management concluded that disclosure controls and internal controls were effective, excluding the recently acquired Fikes business from the assessment - The CEO and CFO concluded that disclosure controls and procedures were effective as of April 30, 2025[302] - Management's report on internal control over financial reporting concluded that controls were effective as of April 30, 2025[307] - The assessment of internal controls excluded the Fikes acquisition, which is permitted by the SEC for recent business combinations[306] Other Information The company reports that this item is not applicable - Not applicable[309] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections The company reports that this item is not applicable - Not applicable[310] Part III Directors, Executive Officers, and Corporate Governance Information on directors, officers, and governance, including the Code of Ethics, is incorporated by reference from the Proxy Statement - Detailed information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's forthcoming Proxy Statement[312] - The Company has adopted a Financial Code of Ethics and a Code of Conduct and Ethics, which are available on its website[313] Executive Compensation Details regarding executive and director compensation are incorporated by reference from the company's forthcoming Proxy Statement - All information related to executive and director compensation is incorporated by reference from the company's forthcoming Proxy Statement[315] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information on security ownership by major shareholders and management is incorporated by reference from the Proxy Statement - Information on security ownership and equity compensation plans is incorporated by reference from the company's forthcoming Proxy Statement[316] Certain Relationships and Related Transactions and Director Independence Disclosures on related party transactions and director independence are incorporated by reference from the Proxy Statement - Disclosures on related transactions and director independence are incorporated by reference from the company's forthcoming Proxy Statement[317] Principal Accountant Fees and Services Details on fees paid to the principal accountant are incorporated by reference from the company's Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the company's forthcoming Proxy Statement[318] Part IV Exhibits and Financial Statement Schedules This section lists all financial statements and key exhibits filed, including acquisition and debt agreements - This section lists all financial statements and exhibits filed with the Form 10-K[321] - Key exhibits include the Fikes acquisition agreement, various debt agreements, executive compensation plans, and Sarbanes-Oxley certifications[320][322][323] Form 10-K Summary The company reports that this item is not applicable - Not applicable[323]