"Our board thoroughly considered the offer in consultation with our legal and financial advisors, and recommended that shareholders not tender their shares," said CFO Bill Walljasper. "Casey's has significant growth opportunities, a strong balance sheet [image-nocss] and real-estate position, a differentiated business model, exceptional operations, including our self-distribution system, and we are executing well on our strategic initiatives. We believe Casey's will deliver far more value to shareholders than Couche-Tard's $36 per share offer."
To underscore those statements, Casey's executives detailed its growth plans for the next 12 months and, at times, even sounded like Couche-Tardwell known for preferring acquisitions over new-store growth.
"The reason we're tracking to acquisitions is acquisitions are accretive immediately," said Casey's president and CEO Robert Myers. "There's a process of maturity with a new-store build, anywhere from one to three years, and in some cases even longer. And so with an acquisition, you have an established customer base and you have a group of friendly employees that need only to be retrained on our processes."
For its new fiscal year, Casey's has penciled in store growth of 4% to 6%, or 60 to 90 stores. "In addition, we plan to replace 20 stores and perform 20 major remodels, all incorporating the features of our successful new-store design," Walljasper said, noting that the company also plans to remain opportunistic. "The company remains well-positioned to increase its store capacity and may revisit our store expansion goal during the year as opportunities present themselves."
Key to Casey's growth goals are plans to expand into new markets and states. For more than a year, the company has reviewed contiguous markets in Arkansas, Michigan and Tennessee, and it will make the first jump into Arkansas before the end of the year.
"We now have contracts secured in the state of Arkansas to begin construction. I would look for those to open toward the later end of the fiscal year,' Walljasper said. "We have four or five under contract, that's certainly an area we're penetrating.... There are quite a few rural, Midwest-type communities [in northern Arkansas], and through them we think there's a lot of opportunity having gone down there and looked at the level of competition, as well as the opportunity for penetration of the c-store saturation in general."
Casey's also has brought in additional help to speed the growth process. "In anticipation and in movement to ramp up store growthwe've actually quadrupled the number of outside realtors to assist in bringing sites, not only for new-store construction, but also acquisitions, to the table," Walljasper said.
For its fiscal 2010, Casey's set a goal to grow by about 60 stores. In the fiscal year, which ended April 30, it actually acquired 37 stores and completed 18 new-store constructions.
(See complete summary of Casey's quarterly report in this issue of CSP Daily News. Andclick here for ongoing coverage of the Casey's and Couche-Tard saga.)
Casey's General Stores Inc., based in Ankeny, Iowa, has 1,513 corporate stores in 11 states.
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