Caseys General Stores, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the first quarter fiscal year 2021 Casey's General Store Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Brian Johnson. Senior Vice President, Investor Relations and Business Development. Please go ahead, sir.

Thank you, and good morning. Thank you for joining us today to discuss the results from our first quarter ended July 31st, 2020. I am Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today is Darren Rebelez, President and Chief Executive Officer, and Steve Bramlage, Chief Financial Officer. Before we begin, I will remind you that certain statements made by us during this investor call may constitute forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include any statements relating to expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and needs, the company's supply chain, business strategies, growth opportunities, performance at our stores, and the potential effects of the COVID-19 outbreak. There are a number of known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward-looking statements, including but not limited to our ability to execute on the strategic plan, the impact and duration of the COVID-19 outbreak and related governmental actions, or to realize benefits from that strategic plan, as well as other risks, uncertainties, and factors which are described in our most recent annual report on Form 10-K, and quarterly reports on Form 10-Q as filed with the SEC and available on our website. Any forward-looking statements made during this call reflect our current views as of today with respect to future events and Casey disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Now, I'd like to turn the call over to Darren to discuss our first quarter results.

Darren? Thanks, Brian, and good morning, everyone. We're really excited to share with you our first quarter results. First, I'd like to recognize our performance is only possible because of the 38,000 plus team members we have who are running our stores, supporting our stores, working our distribution centers, and creating new ways that Casey's can win each day with our guests. There's no truer reflection of our purpose, to make life better for our communities and guests every day. Thank you to the entire team for your dedication. I also want to share a few comments on something I didn't expect, but in a year of the unexpected, here's another one for the list. On August 10th, a severe storm known as a derecho hit many areas in the heart of the Midwest in Casey's core footprint with little to no warning. Thankfully, Casey's team members were all safe. However, many of them or our neighbors were set back by damage, power outages, or other challenges from the storm. Across the company, Our teams swiftly responded to get our stores running so they could stay open and serve our communities in the wake of the disaster. In addition to keeping our doors open and shelves stocked, our teams prepared and delivered hundreds of pizzas to energy crews pulling long days to restore power. And we sent over 20,000 bottles of water to the local chapter of the American Red Cross. Casey's also donated $10,000 to two local food banks that support eastern Iowa and central Illinois. The areas where the derecho most impacted are neighbors and team members. I'm extremely proud of the efforts by everyone on the Casey's team to support one another, our impacted stores, and our communities. Now, turning to this quarter's results. As you've seen in the press release, we achieved a record first quarter with diluted earnings per share of $3.24, a 40% increase over the prior year. The results were driven primarily by a stronger fuel margin versus the first quarter last year, along with disciplined operating expense control. We ended the quarter with a very strong balance sheet with over $570 million in available liquidity and refinanced our senior notes in early August at very attractive rates. I would now like to go over our results and share some of the details in each of the categories. During the first quarter in the fuel category, We continued to experience a favorable fuel margin environment. Results were also amplified by the utilization of our price optimization and procurement capabilities, which enabled us to post an average fuel margin of 38.2 cents per gallon and drive gross profit dollars up 39% to $210 million. Same store gallons sold were down 14.6% as volumes continued to be adversely affected by the pandemic. Although still currently trending negative, the business did see consistent improvements throughout the quarter on fuel volumes. The average retail price of fuel during this period was $1.98 per gallon compared to $2.63 a year ago. Total gallons sold for the quarter were down 11.2% to 550 million gallons. Our fuel pricing team did an excellent job remaining nimble in an ever-changing environment throughout the quarter and that showed in our financial results. Additionally, our fuel procurement strategy continues to evolve and we are currently at approximately 60% of our total fuel volume under contract. Finally, we went over 8,500 accounts in the first quarter on the fleet card program as we continue to grow our commercial fuel business. Moving to inside the store, total same store inside sales were virtually flat for the quarter, ending down about 40 basis points with an average margin of 39.6%. You probably noticed in the press release that we are calling out inside sales as one category. We believe this allows investors to more accurately compare our business with our peers and also lines up with how we talk about the business internally. We will continue to provide the same level of data on the two categories that make up inside sales, grocery and other merchandise and prepared food and fountain. Like fuel, We experienced improving sales throughout the quarter as self-service restrictions began to loosen. Total sales for grocery and other merchandise were up 6.4% to $731.9 million in the first quarter. Same-store sales were up 3.6%, and the average margin was 32.2% compared to 31.3% for the same period a year ago. Beer and alcohol continued to drive the category, and we're very happy to see the packaged beverage category recover relative to the start of the pandemic driven by strong execution of our summer sales campaign. Total prepared food and fountain sales were down 8.5% to $270.8 million in the first quarter. Same store sales were down 9.8%. The average margin for the quarter was 59.7% versus 62.2% from a year ago. This category has been under the most pressure since the crisis began. Consistent with other quick-serve restaurants who have recently reported, the breakfast day part continues to be the most adversely impacted by the pandemic. We ended the quarter with approximately 200 stores with some sort of food restriction and close to 50 stores with beverage restrictions. By comparison, at the end of the fourth quarter, we had over 700 stores impacted by such restrictions. Offsetting these pressures, Whole Pizza Pies continue to perform well, up over 16% for the quarter. We believe our digital capabilities have supported this category through the crisis. Digital sales are up 162%, and 50% of our pizza orders are now taken via our app, website, or DoorDash Marketplace. I'd now like to turn the call over to Steve to go into some detail on the financial statements. Steve?