Company News

Prospering on the Prairie

Casey's sees opportunity for growth while many struggle with the economy
ANKENY, Iowa -- With capital expenditures up $20 million in the second quarter of its fiscal 2009 largely on the back of new-store growth, Casey's General Stores is flexing its financial muscle at a time many retailers are pulling back from spending. As a result, the company is setting the stage to grow by at least 25 new stores per year. "We believe the disparity between buyer and seller expectations is narrowing, which should present more opportunities," said president and CEO Robert J. Myers.

For the quarter, Casey's spent $68.1 million on capital expenditures "due to [image-nocss] increased store growth and construction activity," CFO Bill Walljasper said on a conference call with stock analysts this week. "We anticipate this to grow in future quarters as we accelerate new-store openings and continue to work on additional acquisition opportunities."

He added that the growth will be a combination of new construction-about 20 to 25 sites per year-and acquisitions.

"What makes us a little bit more optimistic [about acquisitions] is the fact that our market area happens to be very fragmented; over two-thirds of the c-store operators in our nine-state marketing area are operators of 10 stores or less. And there's still a fair amount of pressure in the c-store industry," Walljasper said, noting the current credit crisis.

"It's very difficult right now to go out and secure credit, and some credit lines are being pulled back," he said, adding that this will force smaller retailers to look for an exit strategy. "We're fortunate that we do have some flexibility and we do have some financial strength in that regard. So that might bring about some opportunities, as well. We're seeing the multiples come in line, as well, from what they were in the past, and that's another indication that perhaps it might be a little bit more favorable of an environment [for acquisitions]."

Walljasper said he doesn't foresee a large acquisition in the near future, but he also wouldn't rule it out. And if such a deal did become available, he's confident Casey's has the funds to make it work.

"We have about $137 million in cash and cash equivalents on our balance sheet. We do have a $50 million line of credit," he said. "Also I have my fingers on the capital markets and have an understanding of where we could go in the private market to secure [funds]. I do have some of our current note holders approaching me, wanting to offer us more money. So I don't see [financing] as a concern going forward."

In its second quarter, Casey's opened four new-build stores and completed four acquisitions. Year to date, it has acquired 11 stores and built four.

Ankeny, Iowa-based Casey's General Stores has 1,466 stores in nine states.

Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Looking Up: Limited-Time Offers on the Rise

These deals continue to grow in all mealparts, Technomic reports show

Company News

Knowing Growing: QuikTrip Flexes in 2023

C-store chain celebrates 1,000th opening, opens 13th medical clinic, more


Get Creative in Foodservice to Thrive in 2024, Technomic Says

Report: Operators must lean into tech, menu and service innovation, take advantage of existing ingredients and resources


More from our partners