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 July 31, 1997
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 26,262,906 shares
(Class) (Outstanding at August 26, 1997)
<PAGE>
CASEY'S GENERAL STORES, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated condensed balance sheets -
July 31, 1997 and April 30, 1997 3
Consolidated condensed statements
of income - three months ended
July 31, 1997 and 1996 5
Consolidated condensed statements of
cash flows - three months ended
July 31, 1997 and 1996 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. 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K. 12
SIGNATURE 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
July 31, April 30,
1997 1997
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,242,775 3,097,741
Short-term investments 4,234,011 6,898,294
Receivables 2,885,259 2,701,740
Inventories 38,010,914 36,522,960
Prepaid expenses 5,645,637 5,452,646
---------- -----------
Total current assets 58,018,596 54,673,381
---------- ----------
Long-term investments 4,101,287 3,561,865
Other assets 1,242,316 1,341,062
Property and equipment, net of
accumulated depreciation
July 31, 1997, $164,656,956
April 30, 1997, $158,097,550 381,817,120 367,468,283
----------- -----------
$445,179,319 427,044,591
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
<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 $ 2,000,000 2,800,000
Current maturities of
long-term debt 9,931,389 11,795,806
Accounts payable 41,650,840 37,207,819
Accrued expenses 18,164,737 17,549,230
Income taxes payable 9,007,626 4,433,626
----------- ----------
Total current liabilities 80,754,592 73,786,481
----------- ----------
Long-term debt, net of
current maturities 78,889,382 79,685,011
----------- ----------
Deferred income taxes 41,329,000 39,579,000
----------- ----------
Deferred compensation 2,187,056 2,102,642
----------- ----------
Shareholders' equity
Preferred stock, no par value --- ---
Common Stock, no par value 65,128,957 64,886,032
Retained earnings 176,890,332 167,005,425
----------- -----------
Total shareholders' equity 242,019,289 231,891,457
----------- -----------
$445,179,319 427,044,591
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
1997 1996
---- ----
<S> <C> <C>
Net Sales $320,653,915 286,907,949
Franchise revenue 1,367,444 1,457,402
----------- -----------
322,021,359 288,365,351
----------- -----------
Cost of goods sold 254,281,041 228,804,922
Operating expenses 42,389,830 37,421,313
Depreciation and
amortization 7,161,490 6,374,870
Interest, net 1,324,060 1,513,544
----------- -----------
305,156,421 274,114,649
----------- -----------
Income before income taxes 16,864,938 14,250,702
Federal and state
income taxes 6,324,000 5,380,000
----------- ----------
Net income $ 10,540,938 8,870,702
=========== ===========
Earnings per common
and common equivalent
share $ .40 .34
=========== ===========
Weighted average number
of common and common
equivalent shares
outstanding 26,305,842 26,293,424
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CASEY'S GENERAL STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operations:
Net income $ 10,540,938 8,870,702
Adjustments to reconcile
net income to net cash
provided by operations:
Depreciation and amortization 7,161,490 6,374,870
Deferred income taxes 1,750,000 2,000,000
Changes in assets and liabilities:
Receivables (183,519) (328,291)
Inventories (1,487,954) (1,649,656)
Prepaid expenses (192,991) 2,701,382
Accounts payable 4,443,021 2,091,660
Accrued expenses 615,507 (449,075)
Income taxes payable 4,574,000 3,374,000
Other, net 900,089 129,732
Net cash provided by operations 28,120,581 23,115,324
Cash flows from investing:
Purchase of property and equipment (22,162,890) (19,595,966)
Purchase of investments (3,553,428) (2,478,969)
Sale of investments 5,613,923 1,760,204
---------- ----------
Net cash used in investing
activities (20,102,395) (20,314,731)
---------- ----------
Cash flows from financing:
Payments of long-term debt (2,660,046) (2,135,031)
Net activity of short-term debt (800,000) (6,775,000)
Proceeds from exercise of
stock options 242,925 35,875
Payment of cash dividends (656,031) (655,544)
---------- ----------
Net cash used in
financing activities (3,873,152) (9,529,700)
Net increase (decrease)in cash
and cash equivalents 4,145,034 (6,729,107)
Cash and cash equivalents at
beginning of the year 3,097,741 12,673,855
---------- ----------
Cash and cash equivalents at
end of the quarter $ 7,242,775 5,944,748
========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
<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 be
read in conjunction with the Company's most recent
audited financial statements and notes thereto. In the
opinion of management, the accompanying consolidated
condensed financial statements (unaudited) contain all
adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial
position as of July 31, 1997, and the results of
operations for the three months ended July 31, 1997 and
1996, and changes in cash flows for the three months
ended July 31, 1997 and 1996.
3. The Company's financial condition and results of
operations are affected by a variety of factors and
business influences, certain of which are described in
the Cautionary Statement Relating to Forward-Looking
Statements filed as Exhibit 99 to the Quarterly Report
on Form 10-Q for the fiscal quarter ended January 31,
1997. These interim consolidated condensed financial
statements (unaudited) should be read in conjunction
with that Cautionary Statement.
<PAGE>
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.
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 July 31, 1997, the Company's ratio of current assets to current
liabilities was .72 to 1. The ratio at July 31, 1996 and April 30, 1997, was .79
to 1 and .74 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 $5,005,257 (21.7%) in the
three months ended July 31, 1997 from the comparable period in the prior year,
primarily as a result of a larger net income and a larger increase in accounts
payable. Cash flows from investing and financing in the three months ended July
31, 1997 increased, primarily as a result of a smaller decrease of short-term
debt and the sale of investments. 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
<PAGE>
respond to competitive challenges and increase operating efficiencies. During
the first three months of fiscal 1998, the Company expended $22,162,890 for
property and equipment, primarily for the construction and remodeling of Company
stores, compared to $19,595,966 for the comparable period in the prior year. The
Company anticipates expending approximately $75,000,000 in fiscal 1998 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 July 31, 1997, the Company had long-term debt of $78,889,382,
consisting of $19,500,000 in principal amount of 7.70% Notes, $30,000,000 in
principal amount of 7.38% Notes, $11,654,367 of mortgage notes payable,
$13,182,283 of unsecured notes payable and $4,552,732 of capital lease
obligations.
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
twenty-eighth day of June and December in each year, commencing June 28, 1996,
and at maturity, at the rate of 7.38% per annum. The 7.38% 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 in 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
<PAGE>
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 inspection and renovation program with respect to its
older USTs. The Company currently has 1,851 USTs, of which 1,495 are fiberglass
and 356 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. In each of the
years ended April 30, 1997 and 1996, the Company spent approximately $579,000
and $718,000, respectively, for assessments and remediation. During the three
months ended July 31, 1997, the Company expended approximately $100,000 for such
purposes. Substantially all of these expenditures have been submitted for
reimbursement from state-sponsored trust fund programs and as of July 31, 1997,
a total of approximately $4,100,000 has been received from such programs since
their inception. 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 July
31, 1997, of approximately $1,600,000 for estimated expenses related to
anticipated corrective actions or remediation efforts, including relevant legal
and
<PAGE>
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 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 July 31,1997 Compared to Three
Months Ended July 31,1996
Net sales for the first quarter of fiscal 1998 increased by $33,745,966
(11.8%) over the comparable period in fiscal 1997. Retail gasoline sales
increased by $21,480,764 (13.3%) as the number of gallons sold increased by
20,499,929 (15.1%) while the average retail price per gallon decreased 1.6%.
During this same period, retail sales of grocery and general merchandise
increased by $13,695,573 (13.2%) due to the addition of 69 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 79.3% for the first
quarter of fiscal 1998, compared to 79.7% for the comparable period in the prior
year. The gross profit margins on retail gasoline sales increased (9.4%) during
the first quarter of fiscal 1998 from the first quarter of the prior year
(9.1%). The gross profit margin per gallon also increased (to $.1104) in the
first quarter of fiscal 1998 from the comparable period in the prior year
($.1077). The gross profits on retail sales of grocery and general merchandise
also increased (to 39.7%) from the comparable period in the prior year (38.9%).
Operating expenses as a percentage of net sales were 13.2% for the
first quarter of fiscal 1998 compared to 13.0% for the comparable period in the
prior year.
<PAGE>
Net income increased by $1,670,236 (18.8%). 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 for 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 or
contamination, 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.
Item 5. Other Information.
On February 10, 1997, the Company executed a Term Note in favor of UMB
Bank, n.a., in the principal amount of $15,000,000. The Company also entered
into a new revolving Master Note with UMB Bank, n.a., effective as of February
7, 1997, replacing the prior note dated January 13, 1995. Copies of such
instruments are being filed as Exhibit 10.30 to this Form 10-Q.
On August 25, 1997, the Board of Directors of the Company approved of
an Amendment to Article II, Section 2, of the Amended and Restated Bylaws,
relating to special meetings of shareholders. A copy of the Amendment is being
filed as Exhibit 3.2(a) to this Form 10-Q.
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.
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
<C> <S>
3.2(a) Amendment to Amended and Restated By-Laws
4.2 Rights Agreement 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)
10.30 Term Note and Master Note with UMB Bank,
n.a.
11 Statement regarding computation of per
share earnings
27 Financial Data Schedule
99 Cautionary Statement Relating to Forward-
Looking Statements (g)
</TABLE>
- --------------------
(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.
<PAGE>
(e) Incorporated by reference from the Current Report on
Form 8-K filed February 18, 1993.
(f) Incorporated by reference from the Current Report on
Form 8-K filed January 11, 1996.
(g) Incorporated by reference from the Quarterly Report on
Form 10-Q for the fiscal quarter ended January 31,
1997.
(b) There were no reports on Form 8-K filed during the
quarter for which this Report is filed.
<PAGE>
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: September 5, 1997 By: /s/ Douglas K. Shull
Douglas K. Shull,
Treasurer
(Authorized Officer and Principal
Financial Officer)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
<C> <S>
3.2(a) Amendment to Amended
and Restated By-Laws
10.30 Term Note and Master
Note with UMB Bank, n.a.
11 Statement regarding
computation of
per share earnings
27 Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 3.2(a)
AMENDMENT TO
AMENDED AND RESTATED BYLAWS OF
CASEY'S GENERAL STORES, INC.
Pursuant to action of the Board of Directors of Casey's General Stores,
Inc. on August 25, 1997, the Amended and Restated Bylaws of Casey's General
Stores, Inc., in the form adopted on March 3, 1997, are hereby amended in the
following respects:
1. By deleting Article II, Section 2 thereof and by
inserting, in lieu thereof, the following provision as a new
Article II, Section 2:
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed
by statute or by the Restated and Amended Articles of Incorporation, as
amended, of the Corporation (the "Restated Articles"), may be called by
the Chief Executive Officer, Chief Operating Officer, President or
pursuant to a resolution adopted by a majority of the entire Board.
Business transacted at any special meeting of the shareholders shall be
limited to the purpose stated in the notice of the meeting.
2. The foregoing Amendment shall be in full force and effect from and
after August 25, 1997, the date of the Board of Directors' approval thereof.
CASEY'S GENERAL STORES, INC.
By: /s/ John G. Harmon
John G. Harmon, Corporate
Secretary
(SEAL)
<PAGE>
Exhibit 10.30
TERM NOTE
$15,000,000 Kansas City, Missouri
And Interest February 10, 1997
FOR VALUE RECEIVED, the undersigned promises to pay to the order of UMB
Bank, n.a. (hereinafter called "Bank"), at its main office in Kansas City,
Missouri, the principal sum of Fifteen Million Dollars ($15,000,000.00) in
quarterly installments of principal plus interest payable as follows: $625,000
plus accrued interest on the first day of May, 1997 and $625,000 plus accrued
interest on the first day of each succeeding August, November, February and May
through and including November 1, 1999 and a final payment in the amount of
$8,125,000 plus accrued interest on February 1, 2000 until the whole sum is
fully paid with interest from date at the rate per annum of 100 basis points
over the UMB Federal Funds Rate, adjusted on the first day of each calendar
quarter. For purposes hereof, the UMB Federal Funds Rate is that rate which the
Bank states from time to time to be the UMB Federal Funds Rate. If any of said
installments are not paid when due, then all remaining installments shall
immediately become due and payable. Interest hereunder shall be computed on the
basis of days elapsed and assuming a 360-day year. Each installment shall be
applied first to payment of accrued interest and then to reduction of the
principal sum. This Note shall bear interest after maturity at a rate 2% greater
than the rate otherwise payable hereon.
Upon the occurrence of any of the following events: failure of the
undersigned to pay any amount due hereunder when the same is due and payable;
failure of the undersigned to pay or perform any other obligation of the
undersigned to the holder hereof; the dissolution of or termination of existence
of the undersigned; the failure of the undersigned to pay its debts as they
mature; the appointment of a receiver for any part of the property of the
undersigned, and an assignment for the benefit of the creditors of the
undersigned, or the commencement of any proceedings under bankruptcy or
insolvency laws by or against the undersigned, then this Note and all other
obligations of the undersigned to the Bank shall immediately become due and
payable in full without notice or demand.
The Bank's acceptance of the partial payment of any sum due hereunder
after any event of default or after maturity hereof shall not prevent the Bank
from exercising its rights granted in this Note or any other documents or by
applicable law and shall not rescind, waive or otherwise affect any acceleration
or any other exercise by the Bank of any of its rights hereunder or thereunder.
The undersigned agrees that time is of the essence. If any provision of this
Note violates the law or is in any way unenforceable, all other provisions of
this Note shall remain valid.
The undersigned shall furnish to the Bank such information and reports
regarding the undersigned's financial condition and operations, and such other
matters as the Bank may from time to time reasonably request. Specifically, and
without limitation on the foregoing, the undersigned shall provide to the Bank
upon reasonable request, current financial statements for the undersigned
including, but not limited to balance sheets and
<PAGE>
statements of profit and loss.
The undersigned shall comply with all federal, state and local laws,
statutes, regulations, standards, rules, ordinances and orders pertaining to the
environment, hazardous substances, pollutants or contaminants (hereinafter
referred to as "Environmental Regulations") and shall promptly deliver to the
Bank copies of any notice or other communication received by the undersigned
alleging a violation of, or a failure to maintain any permit or license required
by, any Environmental Regulation if any such alleged violation or failure is
reasonably likely to result in a material adverse effect on the undersigned,
financial or otherwise. For purposes hereof, "material adverse effect" shall
mean an expense, obligation or liability of the undersigned incurred as a result
of or in connection with such alleged violation or failure which is in an amount
in excess of One Million Dollars ($1,000,000.00). The undersigned represents and
warrants that it has obtained and shall keep in force all licenses and permits
required in connection with any operations conducted by it.
The loan evidenced by this Note has been made, and this Note has been
delivered, at the Bank's office indicated above, and such loan, this Note and
the rights, obligations and remedies of the Bank and the undersigned shall be
governed by and construed in accordance with the laws of the State of Missouri.
All obligations of the undersigned, and the rights, powers and remedies of Bank,
expressed herein shall be in addition to, and not in limitation of, those
provided by law or in any written agreements or instruments (other than this
Note) relating to any obligations of the undersigned to the Bank.
To the extent, if any, permitted by applicable law, the undersigned
agrees to pay all expenses of the holder in collecting this Note, including
reasonable attorneys' fees and any and all claims, demands, judgments,
penalties, fines, liabilities, costs, damages and expenses incurred by the Bank
either directly or indirectly in connection therewith. The undersigned warrants
and represents that all loan proceeds of the indebtedness evidenced hereby are
to be used exclusively for business purposes of the undersigned.
Demand for payment, notice of nonpayment, protest, notice of dishonor,
diligence or suit are hereby waived by all parties liable hereon. Any failure by
any holder hereof to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any other time
and from time to time thereafter. No setoff or counterclaim of any kind claimed
by any person liable under this Note shall stand as a defense to the enforcement
of payment of this Note against any such person, it being agreed that any such
setoff or counterclaim must be maintained by separate suit or action. In the
event of the occurrence of any event of default, the holder hereof may apply all
balances, credits, deposits, accounts or monies of the undersigned held by the
holder in any capacity, whether or not the same are due, toward the payment of
all amounts due and payable under this Note.
CASEY'S GENERAL STORES, INC.
By: /s/ Doug Shull, Treasurer
<PAGE>
MASTER NOTE
UMB BANK, N.A.
1010 Grand Avenue, Kansas City, MO 64106
Loan Number 0015524 79407 TAD
Date: February 7, 1997 Amount: $15,000,000.00
FOR VALUE RECEIVED the undersigned (the "undersigned" means each maker
and each endorser, and if more than one, each shall be jointly and severally
liable hereunder) promises to pay to the order of UMB BANK, n.a., (hereinafter
"Bank") at its main office or at such other place as the holder hereof may from
time to time designate in writing, on demand, but if no demand, on demand, the
principal sum of FIFTEEN MILLION AND NO/100 Dollars ($15,000,000), or such other
lesser amount as shall be noted as the Unpaid Principal Balance on the Schedule
of Disbursements and Payments of Principal included herein or attached hereto
pursuant to the authority set forth herein, together with interest on the unpaid
principal balance hereof from time to time outstanding from date(s) of
disbursement(s) until Maturity (as herein defined) at the rate (the "Loan
Interest Rate") indicated below:
|_| Daily Variable Rate. The Loan Interest Rate shall be adjusted
each day to a rate equal to 75 basis points) above the UMB Fed
Funds (as herein defined) in effect as of that day.
The Bank's Index Rate for this Note is defined as:
Accrued interest shall be payable Monthly. The term "Maturity" shall
mean on demand, or any earlier date on which payment hereunder is due pursuant
to any demand or acceleration rights provided in this Note. The term "Index
Rate", if applicable to this Note, shall mean that rate of Interest per annum
determined from time to time by Bank as its base or index rate for loans to
commercial borrowers. Such base or index rate does not necessarily reflect the
rate that Bank charges its best or most creditworthy customers. If the Bank is
precluded by law or otherwise from using the above base or index rate, the term
"Index Rate" shall mean that substitute index rate selected by Bank in place of
its base or index rate, which substitute index rate shall be comparable to
Bank's base or index rate provided for herein.
Interest hereunder shall be computed on the basis of days elapsed and
assuming a 360-day year. Each payment received shall be applied first to accrued
interest, and then to a reduction of the principal sum and any expense or other
sums owed under this Note, or in any other order as determined by Bank in Bank's
sole discretion and as permitted by law. Any sum remaining unpaid after Maturity
shall thereafter bear interest at a rate (the "Default Interest Rate") which
shall be at all times TWO AND NO/1000 percentage points in excess of the Loan
Interest Rate (adjusted, if applicable, as provided above) that would have been
applicable but for such Maturity. If not paid at Maturity, interest thereafter
shall be compounded monthly.
<PAGE>
The privilege is hereby reserved to prepay without penalty all or any
part of the outstanding amount due hereunder at any time prior to Maturity. If
at any time prior to Maturity the outstanding principal balance due hereunder is
less than the face amount of this Note, the undersigned, or any of them, may
from time to time until Maturity request, and Bank may in its sole discretion
make, further disbursements hereunder which shall be evidenced by this Note;
provided, however, the aggregate amount of all principal amounts outstanding
hereunder shall at no time exceed the face amount of this Note; and provided
further, that each and every disbursement made under this Note shall be at the
Bank's sole discretion, Bank having made no commitment to make any such
disbursements. The principal amount due hereunder shall be the last amount
stated to be the Unpaid Principal Balance on the Schedule of Disbursements and
Payments of Principal, and the undersigned hereby authorizes any officer of the
Bank to make notations on the Schedule of Disbursements and Payments of
Principal from time to time to evidence payments and disbursements hereunder.
The Bank is hereby directed by the undersigned to credit all future
disbursements, if any, under this Note to account number 987-052-750-2 carried
on the books of Bank in the name of CASEY'S GENERAL STORES, INC., and the
undersigned agrees that the Bank or holder hereof may make disbursements, at its
discretion, upon oral or written instructions of any of the undersigned, or any
other person(s) authorized by any of the undersigned.
Notwithstanding anything contained herein to the contrary, in no event
shall interest accrue under this Note, before or after Maturity, at a rate in
excess of the highest rate permitted by applicable law, and if interest
(including any charge or fee held to be interest by a court of competent
jurisdiction) in excess thereof shall be paid, then the excess shall constitute
a payment of, and be applied to, the principal balance hereof, or at Bank's
option, shall be repaid to the undersigned.
The undersigned warrants and represents that all proceeds of the loan
evidenced by this Note are to be used solely for business or agricultural
purposes, and not for personal, family or household purposes. The undersigned
agrees that if the proceeds are to be used for agricultural purposes, such
proceeds will be used only for the specific operating purposes described to Bank
by the undersigned, and not for the acquisition of fixed assets or capital
expenditures. No collateral security securing this Note will be sold unless Bank
is first notified and approves in writing of such sale.
As security for the payment of all amounts due under this Note and all
renewals and extensions hereof, and for the payment of all other present or
future indebtedness and obligations to the Bank of any party liable hereon,
however and whenever created, arising or evidenced, direct or indirect,
contingent, secured, unsecured, matured or not yet due, the undersigned pledges
and grants to Bank a lien and security interest in all indebtedness of Bank to
any of the undersigned, including (without limitation) any moneys, credit
balances or deposits (general or special) due from or standing on deposit with
the Bank, which belongs to, is in the name of, or is subject to withdrawal by,
any party liable hereon, whether now existing or hereafter arising or deposited,
and in all items, moneys, instruments, certificates of deposit, securities and
other personal property of or in the name of any of the undersigned now or
hereafter in the possession or control of, or in transit to, the Bank for any
purpose and in any capacity (but excluding however from the foregoing any
accounts or deposits held in or by any trust qualified under sections 401 (a) or
408 of the Internal Revenue Code of 1986), including all proceeds and products
thereof and all accessions and accruals thereto and all dividends, rights,
payments, shares and
<PAGE>
property received in respect thereto, the undersigned further agreeing that the
aforesaid indebtedness (if any) of Bank to any of the undersigned may, at any
time that all or any part of this Note remains unpaid (whether before or after
Maturity), be held or applied to the payment of this Note by the holder hereof.
Nothing herein shall in any way limit any of Bank's rights of setoff. This Note
may also be secured by other collateral in which the undersigned or others may
have granted a security interest or lien to Bank, including, without limitation,
the following:
NOT APPLICABLE FOR THIS NOTE.
Bank may retain any and all of the above collateral security, irrespective of
the payment in full of the indebtedness evidenced by this Note, until all
indebtedness secured thereby has been repaid and performed in full. It is
intended that the above security interests and liens secure all of each of the
undersigned's existing and future indebtedness to Bank of all types and nature,
including indebtedness unrelated or dissimilar to the indebtedness evidenced by
this Note. If this Note is secured by a mortgage or deed of trust, such mortgage
or deed of trust is dated _____________________ and is a lien on real property
located in the State of _______________ and recorded in such state. The
undersigned agrees to give to Bank upon Bank's request, from time to time, such
other and further security as Bank, in its sole discretion, may deem necessary
or appropriate, such additional security to become collateral security for this
Note under the provisions hereof.
Presentment, demand, notice of nonpayment, dishonor, protest, notice of
protest, notice of dishonor or default, and any and all lack of diligence and
suit are hereby waived by all parties liable hereon. The undersigned and each
endorser, guarantor, surety or other person who may now or hereafter be liable
for the payment of this Note, by executing, endorsing, guaranteeing or assuming
this Note, jointly and severally consent and agree to all of the terms and
conditions herein, and without limitation of the foregoing and without affecting
their liabilities hereunder or under any other document or instrument, agree and
consent without further notice to (i) all renewals, deferrals, extensions and
modifications hereof, (ii) the impairment, alteration, compromise, acceleration,
extension or change in the time or manner of the payment of any of the
undersigned's indebtedness to Bank, (iii) the impairment, substitution, exchange
or release at any time of all or any part of any collateral security or any
guaranty for this Note, (iv) the release of, or impairment of the right of
recourse against, any of the undersigned or any endorser, guarantor, surety or
any other person now or hereafter liable hereon, (v) the substitution of
extension or renewal notes for this Note, and (vi) the modification of any terms
hereof or of any mortgage, deed of trust or other agreement now or hereafter
given in connection with or as security for this Note.
To the full extent (if any) permitted by applicable law, the
undersigned agrees to pay, and to indemnify Bank from and against, all costs,
charges, expenses, judgements, fines, penalties and reasonable attorneys' fees
incurred by the holder in: (a) collecting this Note, (b) enforcing rights with
respect to or realizing upon any collateral security therefor, (c) defending any
action brought against Bank with respect to this Note, any matter relating
thereto or to any relationship or transaction between Bank and any of the
undersigned, or (d) complying with, or failing to comply with, any Environmental
Regulations (as herein defined) including abatement and cleanup costs. Any sums
paid by the holder for any such expenses shall be immediately due and payable by
the undersigned and shall bear interest at the rate then applicable to any
outstanding principal
<PAGE>
hereunder from the date advanced until paid.
The occurrence of any of the following shall constitute an "Event of
Default": (i) default in the payment of any sum due hereunder, or in the payment
or performance of any other obligation of any of the undersigned to Bank or the
occurrence of any default by any of the undersigned pursuant to any obligation
or undertaking under any security agreement, assignment, pledge agreement, deed
of trust, mortgage or other instrument or document governing or relating to the
indebtedness evidenced hereby or granting or providing for a security interest,
pledge or other lien as security for any obligations of any of the undersigned
to Bank (including, but not limited to, the indebtedness evidenced by this
Note); (ii) the occurrence of any adverse development with respect to the
financial condition of any of the undersigned or any other person or entity
("Guarantor") who is directly or indirectly liable for any of the indebtedness
evidenced by this Note, which materially effects the ability of any of the
undersigned or such Guarantor to perform their respective obligations to Bank;
(iii) any material representation or warranty made by any of the undersigned or
any Guarantor to Bank being untrue, inaccurate or incomplete as of the day it
was made or given; (iv) the death, dissolution or termination of existence of
any of the undersigned or any Guarantor or the failure of any of the undersigned
or any Guarantor to pay debts as they mature, the appointment of a receiver for
any part of the property of any of the undersigned or any Guarantor, an
assignment for the benefit of creditors by any of the undersigned or any
Guarantor, or the commencement of any proceedings under bankruptcy or insolvency
laws by or against any of the undersigned or any Guarantor; (v) a levy,
attachment, restraint or other legal process filed against any of the
undersigned or any Guarantor or any collateral security securing this Note; (vi)
as a result of its reasonable determination that any collateral security given
for this Note is impaired or has a value insufficient to adequately secure the
obligations of the undersigned secured thereby, Bank has requested additional
collateral and such additional collateral has not been promptly provided by the
undersigned or a Guarantor, of a type and in the manner satisfactory to Bank;
(vii) that subsequent to the date of this Note (or any predecessor note(s) for
which this Note constitutes a renewal, extension or refinancing) there has
occurred a "change of control" in any of the undersigned that is a corporation
or partnership (for purposes of this Note, a "change of control" is deemed to
have occurred upon the transfer, directly or indirectly, in one or more
transactions, of any general partnership interest or of 10.000% or more of any
class of voting stock of a corporation or the right to vote or control such
stock or partnership interest, or if the percentage of a corporation's issued
and outstanding shares that are held by any one shareholder changes (for any
reason) by more than 10.000 percentage points) or (viii) Bank has deemed itself
insecure with respect to the undersigned's indebtedness under this Note or with
respect to any of the undersigned's other obligations to Bank.
Upon the occurrence of any Event of Default, Bank may, at its sole
option and without limitation on the demand feature of this Note and without
notice or demand: (a) declare the entire principal sum owed hereunder and all
other indebtedness of the undersigned to Bank, immediately due and payable; (b)
appropriate and apply toward the payment of the undersigned's obligations to
Bank (including, but not limited to, the indebtedness evidenced by this Note),
in such order of application as it elects, any or all balances, credits,
deposits, accounts or moneys of or in the name of any of the undersigned then or
thereafter with Bank in any capacity; and (c) exercise, in addition to all other
rights hereunder or under any other applicable agreements and instruments, its
rights under applicable law, including those of a secured party under the
Uniform
<PAGE>
Commercial Code of the State of Missouri. Upon the occurrence of an Event of
Default described in clause (iv) of the immediately preceding paragraph, this
Note shall automatically and immediately become due and payable without notice
or demand. The failure of the Bank to exercise any option or right or remedy
shall not preclude Bank from exercising any other right or remedy Bank may be
entitled to exercise upon the occurrence of any Event of Default hereunder, and
shall not constitute a waiver of such option or any other right at any time
thereafter. Bank's acceptance of a partial payment of any sum due hereunder
after any Event of Default or after Maturity, shall not rescind, waive or
otherwise affect any such Event of Default or Maturity or any acceleration or
any other exercise by Bank of any of its rights hereunder or under any other
documents or applicable law. The undersigned agrees that time is of the essence.
If any provision of this Note violates the law or is unenforceable, the other
provisions of this Note shall remain valid.
The undersigned shall furnish to Bank such information and reports
regarding any collateral security, the undersigned's financial condition and
operations, and such other matters as Bank may from time to time reasonably
request. Specifically, and without limitation on the foregoing, the undersigned
shall provide to Bank upon reasonable request, current financial statements for
each of the undersigned and each Guarantor including, but not limited to,
balance sheets and profit and loss statements.
The undersigned shall comply with all federal, state and local laws,
statutes, rules, regulations, standards, ordinances and orders pertaining to the
environment, hazardous substances, pollutants or contaminants ("Environmental
Regulations") and shall immediately deliver to Bank copies of any notice or
other communication received by any of the undersigned alleging a violation of,
or a failure to maintain any permit or license required by, any Environmental
Regulations. The undersigned covenants, represents and warrants to Bank that any
property now of hereafter or previously owned or operated by any of the
undersigned, has not been, and will not be, used by any of the undersigned, or
to the best knowledge and belief of each of the undersigned, by any prior owner
or operator, to refine, produce, store, handle, process or transport any
hazardous substance, pollutant or contaminant except in full compliance with all
applicable Environmental Regulations, and that any substance disposed of
off-site by any of the undersigned have been, and will be, disposed of in
accordance with all applicable Environmental Regulations. The loan evidenced
hereby has been made, and this Note has been delivered, at Bank's office at the
address indicated above, and such loan, this Note and the rights, obligations
and remedies of Bank and the undersigned shall be governed by and construed in
accordance with the laws of the State of Missouri. All obligations of the
undersigned, and the rights, powers and remedies of Bank, expressed herein shall
be in addition to, and not in limitation of, those provided by law or in any
written agreements or instruments (other than this Note) relating to any
obligation of any of the undersigned to Bank, the loan evidenced by this Note or
any collateral security.
It is the intent hereof that each of the undersigned (if more than one)
remain liable as principal until the full amount of all indebtedness evidenced
by this Note has been paid, notwithstanding any act, omission or event that
might otherwise operate as a legal or equitable discharge or defense with
respect to any of the undersigned.
No set off or counterclaim of any kind claimed by any person liable
under this Note shall stand as a defense to the enforcement of this Note against
any such person, it being agreed that any such set off or counterclaim must be
maintained by separate suit.
<PAGE>
The undersigned and Bank hereby agree to trial by court and irrevocably
waive jury trial in any action or proceeding (including but not limited to any
counterclaim) arising out of or in any way relating to or connected to this
Note, any relationship or transaction between any of the undersigned and Bank,
the origination, administration or enforcement of the indebtedness evidenced or
secured by this Note, or any other matter.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S) AND US (CREDITOR)
FROM MISUNDERSTANDING OR DISAPPOINTMENT. ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
Address: One Convenience Blvd. Borrower: Casey's General Stores, Inc.
Ankeny, Iowa 50021 By: Doug Shull
Title: Treasurer
<PAGE>
Customer ID: 0015524 Loan #: 79407 page ________
Renewal Note: 79407
Loan Amount: $15,000,000.00
SCHEDULE OF DISBURSEMENT AND
PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid
Interest Interest Interest Principal Principal Principal Disbursement
Date Paid to Rate Paid Disbursement Payment Balance Approved By
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
This is the attached Schedule of Disbursements and Payments of Principal
referred to in the Note dated February 7, 1997, made by the undersigned to the
order of UMB Bank, n.a.
Borrower: Casey's General Stores, Inc.
- -------------------------------------------------------------------------
Dated:
- -------------------------------------------------------------------------
Dated:
- -------------------------------------------------------------------------
Dated:
<PAGE>
[Casey's letterhead]
Mr. Terry Dierks
Senior Vice President
UMB Bank, n.a.
P.O. Box 419226
Kansas City, MO 64141-6226
RE: $15,000,000 Term Loan
Dear Mr. Dierks:
Pursuant to your commitment of February 6, 1997, this will set forth
the agreement between Casey's General Stores, Inc. (the "Company") and UMB Bank,
n.a. (the "Bank") with respect to the additional covenants that the Company will
abide by during the term of the $15,000,000 Term Loan extended to the Company by
the Bank as of February 10, 1997.
The Company agrees, for so long as the Loan remains outstanding, to
abide by the covenants set forth in Sections 6.1 through 6.9 and 7.1 through
7.10, inclusive, of the Note Agreement dated as of February 1, 1993 between the
Company and Principal Mutual Life Insurance Company and Nippon Life Insurance
Company of America with respect to the Company's 7.70% Senior Notes due December
15, 2004. The Company also agrees, for so long as the Loan remains outstanding,
to abide by the covenants set forth in Sections 6.1 through 6.11 and 7.1 through
7.10, inclusive, of the Note Agreement dated as of December 1, 1995 between the
Company and Principal Mutual Life Insurance Company with respect to the
Company's 7.38% Senior Notes due February 28, 2020. For the purpose of this
agreement, an Event of Default under the Note Agreements dated February 1, 1993
and December 1, 1995 constitutes an Event of Default with respect to all credit
extended to the Company by the Bank. The Company further agrees to provide the
Bank with copies of any amendments or modifications changing the covenants
listed above. The financial information and reports referred to in the Note
Agreements will be furnished to the Bank at the times and as set forth herein.
Sincerely,
/s/ Doug Shull
Doug Shull
Treasurer
Accepted and agreed to this 10th day of February, 1997.
UMB Bank, n.a.
By: /s/ Terry Dierks
Terry Dierks, Senior Vice President
<PAGE>
Exhibit 11
CASEY'S GENERAL STORES, INC.
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended
July 31,
1997 1996
---- ----
<S> <C> <C>
Weighted average number of
common and common equivalent
shares:
Weighted average number
of shares outstanding 26,249,106 26,225,206
Shares applicable to
stock options 56,736 68,218
---------- ----------
26,305,842 26,293,424
Net income $10,540,938 8,870,702
========== ==========
Earnings per common and
common equivalent share $ .40 .34
========== ==========
</TABLE>
<PAGE>
<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 JULY 31, 1997 OF CASEY'S GENERAL STORES, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000726958
<NAME> CASEY'S GENERAL STORES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUL-31-1997
<EXCHANGE-RATE> 1
<CASH> 7,242,775
<SECURITIES> 4,234,011<F1>
<RECEIVABLES> 2,885,259
<ALLOWANCES> 0
<INVENTORY> 38,010,914
<CURRENT-ASSETS> 58,018,596
<PP&E> 546,474,076
<DEPRECIATION> 164,656,956
<TOTAL-ASSETS> 445,179,319
<CURRENT-LIABILITIES> 80,754,592
<BONDS> 78,889,382<F2>
0
0
<COMMON> 65,128,957
<OTHER-SE> 176,890,332<F3>
<TOTAL-LIABILITY-AND-EQUITY> 445,179,319
<SALES> 320,653,915
<TOTAL-REVENUES> 322,021,359
<CGS> 254,281,041
<TOTAL-COSTS> 254,281,041
<OTHER-EXPENSES> 49,551,320
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,324,060
<INCOME-PRETAX> 16,864,938
<INCOME-TAX> 6,324,000
<INCOME-CONTINUING> 10,540,938
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,540,938
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
<FN>
<F1>SHORT-TERM INVESTMENTS
<F2>LONG-TERM DEBT, NET OF CURRENT MATURITIES
<F3>RETAINED EARNINGS
</FN>
</TABLE>
