SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Quarter Ended October 31, 1996
Commission File Number 0-12788
CASEY'S GENERAL STORES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0935283
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ONE CONVENIENCE BOULEVARD, ANKENY, IOWA
(Address of principal executive offices)
50021
(Zip Code)
(515) 965-6100
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO _____
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, No Par Value 26,225,206 shares
(Class) (Outstanding at December 9, 1996)
<PAGE>
CASEY'S GENERAL STORES, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated condensed balance sheets -
October 31, 1996 and April 30, 1996 3
Consolidated condensed statements of
income - three and six months ended
October 31, 1996 and 1995 5
Consolidated condensed statements of
cash flows - six months ended
October 31, 1996 and 1995 6
Notes to consolidated condensed
financial statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 13
Item 4. Submission of Matters to a Vote of
Security Holders. 14
Item 6. Exhibits and Reports on Form 8-K. 14
SIGNATURE 16
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
October 31, April 30,
1996 1996
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents ............ $ 5,306,349 12,673,855
Short-term investments ............... 15,478,189 13,953,926
Receivables .......................... 3,535,539 2,679,967
Inventories .......................... 36,707,342 32,437,323
Prepaid expenses ..................... 5,386,245 8,266,308
------------ -----------
Total current assets ........ 66,413,664 70,011,379
------------ -----------
Long-term investments ......................... 4,314,992 5,153,169
Other assets .................................. 1,301,658 1,356,643
Property and equipment, net of
accumulated depreciation
October 31, 1996, $145,066,164
April 30, 1996, $132,609,514 ................ 353,768,900 328,313,767
------------ -----------
$425,799,214 404,834,958
============ ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Notes payable ...................... $ 19,975,000 21,025,000
Current maturities of
long-term debt ................... 8,611,650 8,679,217
Accounts payable ................... 39,169,228 36,190,236
Accrued expenses ................... 17,489,443 17,032,275
Income taxes payable ............... 2,154,000 ---
------------ -----------
Total current liabilities ........ 87,399,321 82,926,728
------------ -----------
Long-term debt, net of
current maturities ........................ 77,036,660 81,249,264
------------ -----------
Deferred income taxes ....................... 36,791,000 32,791,000
------------ -----------
Deferred compensation ....................... 1,897,018 1,693,288
------------ -----------
Shareholders' equity
Preferred stock, no par value ............. --- ---
Common Stock, no par value ................ 63,592,717 63,556,842
Retained earnings ......................... 159,082,498 142,617,836
------------ -----------
Total shareholders' equity .................. 222,675,215 206,174,678
------------ -----------
$425,799,214 404,834,958
============ ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
October 31, October 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales ............. $286,291,027 243,235,120 573,198,976 496,231,874
Franchise revenue ..... 1,379,406 1,400,148 2,836,808 2,854,755
------------ ----------- ----------- -----------
287,670,433 244,635,268 576,035,784 499,086,629
------------ ----------- ----------- -----------
Cost of goods sold .... 226,565,820 187,822,781 455,370,742 387,355,727
Operating expenses .... 38,825,230 35,443,127 76,246,543 70,241,120
Depreciation and
amortization ........ 6,633,423 6,115,652 13,008,293 11,967,937
Interest, net ......... 1,340,825 1,113,578 2,854,369 2,671,235
------------ ----------- ----------- -----------
273,365,298 230,495,138 547,479,947 472,236,019
------------ ----------- ----------- -----------
Income before
income taxes ........ 14,305,135 14,140,130 28,555,837 26,850,610
Federal and state
income taxes ........ 5,400,000 5,338,000 10,780,000 10,136,000
------------ ----------- ----------- -----------
Net income ......... $ 8,905,135 8,802,130 17,775,837 16,714,610
============ =========== =========== ===========
Earnings per common
and common
equivalent share .... $ .34 .34 .68 .64
============ =========== =========== ===========
Weighted average number
of common and common
equivalent shares
outstanding ......... 26,284,041 26,241,608 26,289,058 26,209,617
============ =========== =========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
October 31,
1996 1995
----------- -------
<S> <C> <C>
Cash flows from operations:
Net income ................................ $ 17,775,837 16,714,610
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation and amortization ......... 13,008,293 11,967,937
Deferred income taxes ................. 4,000,000 1,000,000
Changes in assets and liabilities:
Receivables ......................... (855,572) 530,895
Inventories ......................... (4,270,019) (2,973,055)
Prepaid expenses .................... 2,880,063 (389,328)
Accounts payable .................... 2,978,992 (1,261,121)
Accrued expenses .................... 457,168 609,396
Income taxes payable ............ 2,154,000 579,000
Other, net ............................ 401,062 52,602
------------ -----------
Net cash provided by operations ............. 38,529,824 26,830,936
------------ -----------
Cash flows from investing:
Purchase of property and equipment ........ (38,669,389) (36,527,736)
Purchase of investments ................... (7,514,604) (3,346,400)
Sale of investments ....................... 6,892,134 3,447,134
------------ -----------
Net cash used in investing activities ....... (39,291,859) (36,427,002)
------------ -----------
Cash flows from financing:
Payments of long-term debt ................ (4,280,171) (4,239,199)
Net activity of short-term debt ........... (1,050,000) 15,050,000
Proceeds from exercise of stock
options ................................. 35,875 1,307,781
Payment of cash dividends ................. (1,311,175) (1,172,105)
------------ -----------
Net cash (used in) provided by
financing activities ...................... (6,605,471) 10,946,477
------------ -----------
Net (decrease) increase in cash and cash
equivalents ............................... (7,367,506) 1,350,411
Cash and cash equivalents at
beginning of the year ..................... 12,673,855 5,477,784
------------ -----------
Cash and cash equivalents at
end of the quarter ........................ $ 5,306,349 6,828,195
============ ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying consolidated condensed financial statements (unaudited)
include the accounts and transactions of the Company and its two
wholly-owned subsidiaries, Casey's Marketing Company and Casey's Services
Company. All material inter-company balances and transactions have been
eliminated in consolidation.
2. The accompanying consolidated condensed financial statements (unaudited)
have been prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Although
management believes that the disclosures are adequate to make the
information presented not misleading, it is suggested that these interim
consolidated condensed financial statements (unaudited) be read in
conjunction with the Company's most recent audited financial statements and
notes thereto. In the opinion of management, the accompanying condensed
financial statements (unaudited) contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the financial
position as of October 31, 1996, and the results of operations for the six
and three months ended October 31, 1996 and 1995, and changes in cash flows
for the six months ended October 31, 1996 and 1995. 3. Sales generally are
strongest during the Company's first quarter (May-July) and weakest during
its fourth quarter (February-April). In the warmer months customers tend to
purchase greater quantities of gasoline and certain convenience items, such
as beer, soft drinks and ice. Difficult weather conditions in any quarter,
however, may affect sales of Company stores in specific regions and have an
adverse impact on net income for that period.
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<PAGE>
4. Retail gasoline profit margins have a substantial impact on the Company's
net income. Profit margins on gasoline sales can be adversely affected by
factors beyond the control of the Company, including over-supply in the
retail gasoline market, uncertainty or volatility in the wholesale gasoline
market (such as that experienced in fiscal 1991 as a result of the Persian
Gulf crisis) and price competition from other gasoline marketers. Any
substantial decrease in profit margins on retail gasoline sales or the
number of gallons sold could have a material adverse effect on the
Company's earnings. 5. Recent congressional action to increase the federal
minimum wage may have a significant impact on the Company's operating
results, particularly in the near term, to the extent the forthcoming
increases in labor expenses cannot be passed along to customers through
price increases. Although the Company has in the past been able to, and
will continue to attempt to, pass along increases and operating costs
through price increases, there can be no assurance that all of the expected
increases in labor costs can be reflected in prices, or that price
increases will be absorbed by customers without diminishing customer
spending in Company stores.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Financial Condition and Results of Operations
Casey's derives its revenue from the retail sale of food (including
freshly prepared foods such as pizza, donuts and sandwiches), beverages and
non-food products such as health and beauty aids, tobacco products, automotive
products and gasoline by Company stores and from the wholesale sale of certain
grocery and general merchandise items and gasoline to franchised stores. The
Company also generates revenues from continuing monthly royalties based on sales
by franchised stores, sign and facade rental fees and the provision of certain
maintenance, transportation and construction services to the Company's
franchisees. A typical store is generally not profitable for its first year of
operation due to start-up costs and will usually attain representative levels of
sales and profits during its third year of operation.
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<PAGE>
Due to the nature of the Company's business, most sales are for cash,
and cash provided by operations is the Company's primary source of liquidity.
The Company finances its inventory purchases primarily from normal trade credit
aided by the relatively rapid turnover of inventory. This turnover allows the
Company to conduct its operations without large amounts of cash and working
capital. As of October 31, 1996, the Company's ratio of current assets to
current liabilities was .76 to 1. The ratio at October 31, 1995 and April 30,
1996, was .54 to 1 and .84 to 1, respectively. Management believes that the
Company's current $27,000,000 bank lines of credit (aggregate amount), together
with cash flow from operations, will be sufficient to satisfy the working
capital needs of its business.
Net cash provided by operations increased $11,698,888 (43.6%) in the
six months ended October 31, 1996 from the comparable period in the prior year,
primarily as a result of a decrease in prepaid expenses and an increase in
accounts payable and income taxes payable. Cash flows from investing and
financing in the six months ended October 31, 1996 decreased, primarily as a
result of increased capital expenditures and a reduction of short-term debt.
Cash flows in the future are expected to decrease as a result of the anticipated
growth in capital expenditures.
Capital expenditures represent the single largest use of Company funds.
Management believes that by reinvesting in Company stores, the Company will be
better able to respond to competitive challenges and increase operating
efficiencies. During the first six months of fiscal 1997, the Company expended
$38,669,389 for property and equipment, primarily for the construction and
remodeling of Company stores, compared to $36,527,736 for the comparable period
in the prior year. The Company anticipates expending approximately $65,000,000
in fiscal 1997 for construction, acquisition and remodeling of Company stores,
primarily from funds generated by operations, existing cash and short-term
investments and proceeds of the 7.70% Senior Notes due December 15, 2004 (the
"7.70% Notes") and the 7.38% Senior Notes due December 28, 2020 (the 7.38%
Notes").
As of October 31, 1996, the Company had long-term debt of $77,036,660,
consisting of $21,750,000 in principal amount of 7.70% Notes, $30,000,000 in
principal amount of 7.38% Notes, $12,648,943 of mortgage notes payable,
$6,781,250 of unsecured notes payable and $5,856,467 of capital lease
obligations.
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<PAGE>
Interest on the 7.70% Notes is payable on the 15th day of each month at
the rate of 7.70% per annum. Principal of the 7.70% Notes matures in forty
quarterly installments beginning March 15, 1995. The Company may prepay the
7.70% Notes in whole or in part at any time in an amount of not less than
$1,000,000 or integral multiples of $100,000 in excess thereof at a redemption
price calculated in accordance with the Note Agreement dated as of February 1,
1993 between the Company and the purchasers of the 7.70% Notes.
Interest on the 7.38% Notes is payable semi-annually on the 28th day of
June and December in each year, commencing June 28, 1996, and at maturity, at
the rate of 7.38% per annum. The 7.38% Notes mature on December 28, 2020, with
prepayments of principal commencing December 28, 2010 and ending June 28, 2020,
inclusive, with the remaining principal payable at maturity on December 28,
2020. The Company may prepay the 7.38% Notes in whole or in part at any time in
an amount not less than $1,000,000 or integral multiples of $100,000 in excess
thereof at a redemption price calculated in accordance with the Note Agreement
dated as of December 1, 1995 between the Company and Principal Mutual Life
Insurance Company, as the purchaser of the 7.38% Notes.
To date, the Company has funded capital expenditures primarily from the
proceeds of the sale of Common Stock, issuance of the 6-1/4% Convertible
Subordinated Debentures (which were converted into 3,683,064 shares of Common
Stock on March 28, 1994), the 7.70% Notes and the 7.38% Notes, a mortgage note,
unsecured notes payable and through funds generated from operations. Future
capital needs required to finance operations, improvements and the anticipated
growth in the number of Company stores are expected to be met from cash
generated by operations, existing cash, short-term and long-term investments and
additional long-term debt or other securities as circumstances may dictate, and
are not expected to adversely affect liquidity.
The United States Environmental Protection Agency and several states,
including Iowa, have established requirements for owners and operators of
underground gasoline storage tanks (USTs) with regard to (i) maintenance of leak
detection, corrosion protection and overfill/spill protection systems; (ii)
upgrade of existing tanks; (iii) actions required in the event of a detected
leak; (iv) prevention of leakage through tank closings; and (v) required
gasoline inventory recordkeeping. Since 1984, new Company stores have been
equipped with non-corroding fiberglass USTs, including many with double-wall
construction, over-fill protection and electronic tank monitoring, and the
Company has an active
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<PAGE>
inspection and renovation program with respect to its older USTs. The Company
currently has 1,767 USTs, of which 1,401 are fiberglass and 366 are steel.
Management believes that its existing gasoline procedures and planned capital
expenditures will continue to keep the Company in substantial compliance with
all current federal and state UST regulations.
Several of the states in which the Company does business have trust
fund programs with provisions for sharing or reimbursing corrective action or
remediation costs incurred by UST owners, including the Company. These programs,
other than the State of Iowa, generally are in the early stages of operation and
the extent of available coverage or reimbursement under such programs for costs
incurred by the Company is not fully known at this time. In each of the years
ended April 30, 1996 and 1995, the Company spent approximately $718,000 and
$2,137,000, respectively, for assessments and remediation. During the six months
ended October 31, 1996, the Company expended approximately $351,000 for such
purposes. Substantially all of these expenditures have been submitted for
reimbursement from state-sponsored trust fund programs and as of October 31,
1996, approximately $4,000,000 has been received from such programs. Such
amounts are typically subject to statutory provisions requiring repayment of the
reimbursed funds for noncompliance with upgrade provisions or other applicable
laws. The Company has accrued a liability at October 31, 1996 of approximately
$2,600,000 for estimated expenses related to anticipated corrective actions or
remediation efforts, including relevant legal and consulting costs. Management
believes the Company has no material joint and several environmental liability
with other parties.
Management of the Company currently estimates that aggregate capital
expenditures for electronic monitoring, cathodic protection and overfill/spill
protection will approximate $1,000,000 in fiscal 1996 through December 23, 1998,
in order to comply with the existing UST regulations. Additional regulations, or
amendments to the existing UST regulations, could result in future revisions to
such estimated expenditures. Such expenditures are expected to be funded as
described above, and are not expected to adversely affect liquidity.
Three Months Ended October 31, 1996 Compared to Three
Months Ended October 31, 1995
Net sales for the second quarter of fiscal 1997 increased by
$43,055,907 (17.7%) over the comparable period
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<PAGE>
in fiscal 1996. Retail gasoline sales increased by $30,472,955 (23.1%) as the
number of gallons sold increased by 13,247,104 (10.6%) while the average retail
price per gallon increased 11.3%. During this same period, retail sales of
grocery and general merchandise increased by $10,998,178 (12.0%) due to the
addition of 68 new Company Stores and a greater number of stores in operation
for at least three years.
Cost of goods sold as a percentage of net sales was 79.1% for the
second quarter of fiscal 1997, compared to 77.2% for the comparable period in
the prior year. The gross profit margins on retail gasoline sales decreased
(8.2%) during the second quarter of fiscal 1997 from the second quarter of the
prior year (11.5%) due to the increase in wholesale gasoline costs during the
quarter. The gross profit margin per gallon also decreased (to $.0958) in the
second quarter of fiscal 1997 from the comparable period in the prior year
($.1211). These factors were partially offset by an increase in gross profits on
retail sales of grocery and general merchandise (to 42.2%) from the comparable
period in the prior year (41.4%).
Operating expenses as a percentage of net sales were 13.6% for the
second quarter of fiscal 1997 compared to 14.6% for the comparable period in the
prior year. The decrease in operating expenses as a percentage of net sales was
caused primarily by an increase in the average retail price per gallon of
gasoline sold (11.3%).
Net income increased by $103,005 (1.2%). The slight increase in net
income was attributable primarily to the increase in retail sales of grocery and
general merchandise, an increase in the number of gallons of gasoline sold and
an increased number of stores in operation for at least three years.
Six Months Ended October 31, 1996 Compared to Six Months
Ended October 31, 1995
Net sales for the first six months of fiscal 1997 increased by
$76,967,102 (15.5%) over the comparable period in fiscal 1996. Retail gasoline
sales increased by $52,693,005 (19.4%) as the number of gallons sold increased
by 24,413,692 (9.8%) and the average retail price per gallon increased 8.8%.
During this same period, retail sales of grocery and general merchandise
increased by $21,663,147 (11.7%) due to the addition of 68 new Company stores
and a greater number of stores in operation for at least three years.
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<PAGE>
Cost of goods sold as a percentage of net sales was 79.4% for the first
six months of fiscal 1997 compared to 78.1% for the comparable period in the
prior year. This result occurred because the gross profit margins on retail
gasoline sales decreased (8.6%) during the first six months of fiscal 1997 from
the comparable period in the prior year (10.8%) due to the increase in wholesale
gasoline costs during the period. The gross profit margin per gallon also
decreased in the first six months of fiscal 1997 (to $.1017) from the comparable
period in the prior year ($.1174). However, gross profits on retail sales of
grocery and general merchandise increased (to 40.5%) from the comparable period
in the prior year (40.1%).
Operating expenses as a percentage of net sales were 13.3% for the
first six months of fiscal 1997 compared to 14.2% during the comparable period
in the prior year. The decrease in operating expenses as a percentage of net
sales was caused primarily by an increase in the average retail price per gallon
of gasolilne sold (8.8%).
Net income increased by $1,061,227 (6.3%). The increase in net income
was attributable primarily to the increase in retail sales of grocery and
general merchandise, an increase in the number of gallons of gasoline sold, and
an increased number of stores in operation at least three years.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company from time to time is a party to legal proceedings arising
from the conduct of its business operations, including proceedings relating to
personal injury and employment claims, environmental remediation
activities or contamination-related claims, disputes under franchise
agreements and claims by state and federal regulatory authorities relating
to the sale of products pursuant to state or federal licenses or permits.
Management does not believe that the potential liability of the Company
with respect to such proceedings pending as of the date of this Form 10-Q is
material in the aggregate.
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<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of shareholders held on September 20, 1996, eight
directors were elected for a term of one year. Each of the nominees so elected
previously has served as a director of the Company.
The votes cast or withheld for each nominee were as follows:
For Withheld
Donald F. Lamberti ........................ 23,612,452 610,691
Ronald M. Lamb ............................ 23,605,204 617,939
Douglas K. Shull .......................... 23,610,602 612,541
John G. Harmon ............................ 23,608,082 615,061
John R. Fitzgibbon ........................ 23,956,731 266,412
Patricia Clare Sullivan ................... 23,737,016 486,127
Kenneth H. Haynie ......................... 23,224,160 998,983
John P. Taylor ............................ 23,971,270 251,873
With respect to the other proposal voted upon at the Annual Meeting,
votes were cast as follows:
Proposal 2 - Amendment of Restated and Amended Articles of
Incorporation to Increase the Number of Authorized Shares of
Common Stock:
For Against Abstain
18,245,515 5,817,787 159,841
Proposal 2 received the affirmative vote of a majority of the
outstanding shares of Common Stock and was therefore approved.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are filed with this Report
or, if so indicated, incorporated by reference:
Exhibit
No. Description
3.1(a) Restatement of the Restated and Amended Articles of
Incorporation of Casey's General Stores, Inc.
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<PAGE>
4.2 Rights Agreement dated as of June 14,
1989 between Casey's General Stores,
Inc. and United Missouri Bank of
Kansas City, N.A., as Rights Agent(a)
and amendments thereto (b),(c),(d)
4.3 Note Agreement dated as of February 1,
1993 between Casey's General Stores,
Inc. and Principal Mutual Life
Insurance Company and Nippon Life
Insurance Company of America (e) and
First Amendment thereto (f)
4.4 Note Agreement dated as of December 1,
1995 between Casey's General Stores,
Inc. and Principal Mutual Life
Insurance Company (f)
11 Statement regarding computation of per
share earnings
27 Financial Data Schedule
- --------------------
(a) Incorporated by reference from the Registration
Statement on Form 8-A (0-12788) filed June 19, 1989
relating to Common Share Purchase Rights.
(b) Incorporated by reference from the Form 8 (Amendment No.
1 to the Registration Statement on Form 8-A filed June
19, 1989) filed September 10, 1990.
(c) Incorporated by reference from the Form 8-A/A (Amendment
No. 3 to the Registration Statement on Form 8-A filed
June 19, 1989) filed March 30, 1994.
(d) Incorporated by reference from the Form 8-A12G/A
(Amendment No. 2 to the Registration Statement on Form
8-A filed June 19, 1989) filed July 29, 1994.
(e) Incorporated by reference from the Current Report on
Form 8-K filed February 18, 1993.
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<PAGE>
(f) Incorporated by reference from the Current Report on
Form 8-K filed January 11, 1996.
(b) There were no reports on Form 8-K filed during the quarter for
which this Report is filed.
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 12, 1996 By: /s/ Douglas K. Shull
Douglas K. Shull, Treasurer
(Authorized Officer and
Principal Financial Officer)
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<PAGE>
EXHIBIT INDEX
Exhibit No. Description
3.1(a) Restatement of the Restated and Amended
Articles of Incorporation of Casey's
General Stores, Inc.
11 Statement regarding computation of
per share earnings
27 Financial Data Schedule
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<PAGE>
EXHIBIT 3.1(a)
RESTATEMENT
OF THE
RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
CASEY'S GENERAL STORES, INC.
Casey's General Stores, Inc., a corporation duly organized and existing
under the Iowa Business Corporation Act, Chapter 490, Code of Iowa, 1995, as
amended, does hereby restate its Restated and Amended Articles of Incorporation,
as amended to date, pursuant to the provisions of said Act and all amendments
thereto.
ARTICLE I
The name of the corporation shall be Casey's General Stores, Inc. Its
principal place of business shall be in Polk County, Iowa.
ARTICLE II
The corporation's existence shall be perpetual.
ARTICLE III
The purpose which the corporation is authorized to pursue is and includes
the transaction of any and all lawful businesses for which corporations may be
incorporated under the Iowa Business Corporation Act.
ARTICLE IV
A. The aggregate amount of authorized capital stock of this Corporation
shall be divided into two classes: (i) 120,000,000 shares, consisting of one
class designated as Common, and having no par value and no pre-emptive rights,
and (ii) 1,000,000 shares, consisting of one class designated as Serial
Preferred having no par value. The preferences, voting rights, if any,
limitations and relative rights of the Serial Preferred Stock are as follows:
<PAGE>
1. The holders of each series of the Serial Preferred Stock shall be
entitled to receive dividends when and as declared by the Board of Directors at
such rate or rates and on such dates as shall be fixed for each such series by
resolution of the Board of Directors as hereafter provided before any dividends
shall be paid or set apart for payment on the Common Stock. Such dividends on
the shares of each such series shall be fully cumulative from the date of first
original issue of the shares of each such series. Unless dividends at the rate
fixed for each series of the Serial Preferred Stock shall have been declared and
paid in full on the shares of each such series for all past dividend periods and
any dividend period ending on the date of any payment, purchase, redemption or
other acquisition hereinafter referred to, and unless the full amount of all
mandatory redemption and sinking fund payments then required to be made on each
series of the Serial Preferred Stock shall have been made in full, no dividends
shall be declared or paid or set apart for payment upon any shares of the Common
Stock and no purchase, redemption or other acquisition for value of any shares
of the Common Stock shall be made. If the payment of full cumulative dividends
with respect to the shares of any series of the Serial Preferred Stock shall be
in arrears, the Corporation thereafter shall (so long as such arrearage
continues), whenever it shall make any dividend payment with respect to the
shares of any series of the Serial Preferred Stock, make such dividend payment
to the holders of the shares of each series of the Serial Preferred Stock as to
which there shall be an arrearage and to the holders of the shares of each
series of the Serial Preferred Stock as to which a dividend is then payable, pro
rata among each such series in proportion to the full amount of dividends in
arrears or then payable on the shares of each such series of the Serial
Preferred Stock. The holders of the Serial Preferred Stock shall have no rights
to share in any dividend or distribution of the profits or assets of the
Corporation, whether in the form of cash, stock dividend or otherwise, except to
the extent specifically provided herein or in said resolutions of the Board of
Directors establishing the series of the Serial Preferred Stock.
<PAGE>
2. In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of shares of each series of the
Serial Preferred Stock shall be entitled to be paid such amount as shall be
fixed by resolution of the Board of Directors for each such series as hereafter
provided before any amount shall be paid on the Common Stock. If, in the event
of any such voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation available for distribution to the
holders of the Serial Preferred Stock shall be insufficient to permit full
payment to the holders of each series of the Serial Preferred Stock of their
respective preferential amounts fixed by such resolution of the Board of
Directors, then such assets shall be distributed ratably among such holders in
proportion to their respective preferential amounts. After the payment to the
holders of the Serial Preferred Stock of all such amounts to which they are
entitled pursuant to said resolutions of the Board of Directors, the remaining
assets and funds of the Corporation shall be divided and paid to the holders of
the Common Stock. Neither the consolidation nor the merger of the Corporation
with or into any other corporation or corporations, nor a reorganization of the
Corporation alone, nor the sale or transfer by the Corporation of all or any
part of its assets, shall be deemed to be a liquidation, dissolution or winding
up of the Corporation for the purpose of this paragraph 2.
3. The price at and terms and conditions on which the shares of each series
of the Serial Preferred Stock may be redeemed shall be fixed for each such
series by resolution of the Board of Directors as hereafter provided. Whenever
the Corporation shall have failed to make any mandatory redemption or sinking
fund payment in whole or in part on the date provided therefor (and so long as
such nonpayment shall be continuing), the Corporation shall thereafter make
mandatory redemption or sinking fund payments on each series of the Serial
Preferred Stock (as to which it shall have failed to make all or any part of
such payment or as to which it has a mandatory redemption or sinking fund
obligation then due) pro rata among each such series in proportion to the sum of
(i) any mandatory redemption or sinking fund payment then due and (ii) the
amount of any previously unpaid mandatory redemption or sinking fund payments,
in each case with respect to each such series of the Serial Preferred Stock.
Redemption obligations of the Corporation shall be cumulative.
4. Each share of Serial Preferred Stock shall be entitled to such
privileges of conversion, if any, as are provided and declared by the Board of
Directors at such time as the issue of which it is part is established by the
Board of Directors.
5. Shares of Serial Preferred Stock shall be entitled to vote only upon
those matters required by Sections 57 and 70 of the Iowa Business Corporation
Act, Chapter 496A, Code of Iowa, as amended, as the same or any substitute
provisions therefor may be in effect from time to time.
<PAGE>
The Serial Preferred Stock may be issued from time to time in series.
Authority is hereby expressly granted to the Board of Directors to establish one
or more series of Serial Preferred Stock and, in the resolution establishing
each such series, to fix and determine the number of shares to constitute each
such series, the distinctive designations thereof and the relative rights and
preferences of the shares of each such series. All shares of the Serial
Preferred Stock shall be identical in all respects, except as to the following
rights and preferences as to which there may be variations as between different
series:
(a) The rate of dividend and the dates on which dividends are payable.
(b) The price at and the terms and conditions upon which shares may be
redeemed.
(c) The amount payable upon shares in the event of involuntary liquidation.
(d) The amount payable upon shares in the event of voluntary liquidation.
(e) Sinking fund provisions for the redemption or purchase of shares.
(f) The terms and conditions on which shares may be converted, if the
shares of any series are issued with the privilege of conversion.
(g) Voting rights, if any.
Any unissued shares of the Corporation may be issued and any treasury
shares of the Corporation may be disposed of from time to time in such amount,
for such consideration and upon such terms and conditions as the Board of
Directors may determine.
<PAGE>
ARTICLE V
A. The number of directors of the Corporation shall be not fewer
than four (4) and not greater than nine (9). Vacancies in the Board of
Directors or new directorships created by an increase in the number of directors
shall be filled by election by a majority of the remaining members of the Board,
though less than a quorum, and the person filling such vacancy or newly-created
directorship shall serve out the remainder of the term for the vacated
directorship, or in the case of a new directorship, the term designated for the
class of directors of which that directorship is a part.
B. The shareholders may at any time at a meeting expressly called for that
purpose remove any or all of the directors, for cause, by a vote of two-thirds
of the shares then entitled to vote at an election of directors. For purposes of
this Article, removal "for cause" shall mean that the director to be removed has
been convicted of a felony by a court of competent jurisdiction and such
conviction is no longer subject to direct appeal, or that the director to be
removed has been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation by a court of competent jurisdiction
and such adjudication is no longer subject to direct appeal.
C. This Article V may not be amended, altered or repealed without the
approval of two-thirds of the shares entitled to vote at the time such
amendment, alteration or repeal is proposed.
ARTICLE VI
The Board of Directors of the Corporation shall have the power to adopt a
corporation seal which shall be the corporate seal of this Corporation.
ARTICLE VII
The private property of the shareholders of this Corporation shall at all
times be exempt from liability of corporate debts of any kind and this Article
shall not be amended or repealed.
ARTICLE VIII
Stock in this Corporation shall be transferred only by assignment upon the
books of the Corporation, subject to and in accordance with such restrictions as
may be provided in the Bylaws of this Corporation.
<PAGE>
ARTICLE IX
RESERVED
ARTICLE X
A. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for a breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of law, (iii) for a transaction from which the director derives an improper
personal benefit, or (iv) under Section 496A.44 of the Iowa Business Corporation
Act.
If the Iowa Business Corporation Act is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Iowa Business Corporation Act, as so
amended.
Any repeal or modification of this Article X by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
B. (1) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, (a) is or was a director or officer of the Corporation, or (b)
is or was serving (at such time as he or she is or was a director or officer of
the Corporation) at the request of the Corporation as a director, officer,
partner, trustee, administrator, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, partner, trustee,
administrator, employee or agent or in any other capacity while serving as a
director, officer, partner, trustee, administrator, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Iowa Business Corporation Act, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
<PAGE>
amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a person who
has ceased to be such a director or officer and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, (a)
with respect to proceedings seeking to enforce rights to indemnification as
provided in paragraph (2) of this Section B, the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation, (b) in the case of a
proceeding brought by or in the right of the Corporation, any such
indemnification shall be limited as provided in the Iowa Business Corporation
Act and (c) no such indemnification shall be provided to any director or
officer, as applicable, for any proceeding wherein it shall ultimately be
determined by final judicial decision that such director or officer is liable
(i) for a breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) for a transaction from
which the director derives an improper personal benefit or (iv) under Section
496A.44 of the Iowa Business Corporation Act. The right to indemnification
conferred in this Section B shall be a contract right and shall include the
right to be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that if the
Iowa Business Corporation Act requires, the payment of such expenses incurred by
a director or officer in his or her capacity as a director or officer (and not
in any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of the written affirmation of the good
faith belief of such director or officer that he or she has met the standard of
conduct necessary for indemnification, and an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision that such director or
officer is not entitled to be indemnified under this Section B or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
other employees and agents of the Corporation with the same scope and effect as
the foregoing indemnification of directors and officers.
<PAGE>
(2) If a claim under paragraph 1 of this Section B is not paid in full by
the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required affirmation
and undertaking, if any is required, has been tendered to the Corporation) that
the claimant has not met the standards of conduct which make it permissible
under the Iowa Business Corporation Act for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Iowa Business Corporation Act,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(3) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article shall not be exclusive of any other rights which any person may have or
hereafter acquire under a provision of the Restated and Amended Articles of
Incorporation, By-Laws, agreements, vote of stockholders or disinterested
directors or otherwise, both as to action in a person's official capacity and as
to action in another capacity while holding the office. The Corporation may
enter into separate written agreements with directors, officers, employees and
agents of the Corporation and of other enterprises, which agreements expressly
provide for indemnification and reimbursement of such persons to the fullest
extent now or hereafter permitted by this Article or applicable law.
(4) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Iowa Business Corporation Act.
<PAGE>
ARTICLE XI
These Articles may be amended, modified, revised and/or restated only by
resolution by the Board of Directors, which resolution is submitted to the
shareholders at an annual or special meeting and receives the affirmative vote
of the holders of a majority of the shares entitled to vote thereon.
* * * *
This Restatement of the Amended and Restated Articles of Incorporation of
Casey's General Stores, Inc., as amended to date, does not contain an amendment
requiring shareholder approval and has been adopted by the Board of Directors
this 9th day of December, 1996.
/s/ Donald F. Lamberti
----------------------------
Donald F. Lamberti,
Chief Executive Officer
ATTEST:
/s/ John G. Harmon
- ------------------------
John G. Harmon, Corporate Secretary
<PAGE>
STATE OF IOWA )
) SS
COUNTY OF POLK )
We, Donald F. Lamberti and John G. Harmon, being first duly sworn on oath,
depose and state that we are the Chief Executive Officer and Corporate
Secretary, respectively, of Casey's General Stores, Inc. and that we have
executed the foregoing Restatement of the Restated and Amended Articles of
Incorporation, as amended to date, of Casey's General Stores, Inc. as the Chief
Executive Officer and Corporate Secretary of Casey's General Stores, Inc., and
that the statements contained therein are true.
/s/ Donald F. Lamberti
---------------------------
Donald F. Lamberti,
Chief Executive Officer
/s/ John G. Harmon
------------------------
John G. Harmon, Corporate Secretary
Subscribed and sworn to before me this 10th day of December, 1996.
/s/ Connie Hatcher
-----------------------
Notary Public in and for
the State of Iowa
<PAGE>
Exhibit 11
CASEY'S GENERAL STORES, INC.
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended
October 31,
1996 1995
<S> <C> <C>
Weighted average number of
common and common equivalent
shares:
Weighted average number
of shares outstanding 26,225,206 26,117,406
Shares applicable to
stock options 58,835 124,202
---------- ----------
26,284,041 26,241,608
Net income $ 8,905,135 8,802,130
========== ==========
Earnings per common and
common equivalent share $ .34 .34
========== ==========
Six Months Ended
October 31,
1996 1995
---------- ----------
Weighted average number of
common and common equivalent
shares:
Weighted average number
of shares outstanding 26,225,206 26,063,698
Shares applicable to
stock options 63,852 145,919
---------- ----------
26,289,058 26,209,617
Net income $17,775,837 16,714,610
========== ==========
Earnings per common and
common equivalent share $ .68 .64
========== ==========
</TABLE>
- 18 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED
OCTOBER 31, 1996 OF CASEY'S GENERAL STORES, INC. AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000726958
<NAME> CASEY'S GENERAL STORES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,306,349
<SECURITIES> 15,478,189<F1>
<RECEIVABLES> 3,535,539
<ALLOWANCES> 0
<INVENTORY> 36,707,342
<CURRENT-ASSETS> 66,413,664
<PP&E> 498,835,064
<DEPRECIATION> 145,066,164
<TOTAL-ASSETS> 425,799,214
<CURRENT-LIABILITIES> 87,399,321
<BONDS> 77,036,660<F2>
0
0
<COMMON> 63,592,717
<OTHER-SE> 159,082,498<F3>
<TOTAL-LIABILITY-AND-EQUITY> 425,799,214
<SALES> 573,198,976
<TOTAL-REVENUES> 576,035,784
<CGS> 455,370,742
<TOTAL-COSTS> 455,370,742
<OTHER-EXPENSES> 89,254,836
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,854,369
<INCOME-PRETAX> 28,555,837
<INCOME-TAX> 10,780,000
<INCOME-CONTINUING> 17,775,837
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,775,837
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
<FN>
<F1>SHORT-TERM INVESTMENTS
<F2>LONG-TERM DEBT, NET OF CURRENT MATURITIES
<F3>RETAINED EARNINGS
</FN>
</TABLE>
