Caseys General Stores, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the second quarter fiscal year 2021 Casey's General Stores earnings conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. Brian Johnson, Senior Vice President of Investor Relations and Business Development

Before we begin, I'll remind you that certain statements made by us during this investor call may constitute forward-looking statements within the meaning 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 related sources or needs, the company's supply chain, business and integration strategies, Plans and synergies, growth opportunities, performance at our stores, and the potential effects of COVID-19. 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 the integration of the Buchanan Energy Acquisition, our ability to execute on our strategic plan or to realize benefits from the strategic plan, The impact and duration of COVID-19 and related governmental actions, 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. In cases this claims 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 for having me. Good morning, everyone. We're really excited to share our second quarter results with you. First, our team deserves all the credit for our continued growth and positive performance. Despite the pandemic and changing environment, over 40,000 team members are serving our guests and ensuring our stores have what they need to be there for our communities. Our team is winning, together, and I'm grateful for their dedication. In addition to being a top convenience retailer, we're a part of the fabric of the communities that we operate in, where we know each other by name and show up for each other when in need. As our purpose states, we're here to make life better for our communities and guests every day. Casey's charitable giving aims to have an impact by supporting fundamental needs through three pillars, education, hunger, and community servants. Today, I'd like to share some areas where CACES is having a meaningful impact. During the month of September, with the help of our team members and generous guests, we raised money for over 15 million meals for 58 local food banks in our communities, which has seen increased demand since the onset of the pandemic. First, we jump-started our support with a donation to Feeding America's COVID-19 Relief Fund in May, and then we integrated it into our annual plan. Through an in-store giving campaign in partnership with Coca-Cola and Feeding America, we funded much-needed meals that will feed children and families in our neighborhoods. Then, in October, Casey's announced its first-ever grant program as part of our Cash for Classrooms initiative. Our work in education focuses on helping local K-12 schools and the people they serve, students, teachers, and families. This grant program is currently in progress and we look forward to sharing news of the grantees in March. Thank you to our vendor partners, each Casey's team member that asks for donations at our registers, and especially to our guests who truly do good when they shop at Casey's. Now let's discuss the quarter's results. As you've seen in our press release, we had a tremendous second quarter. Diluted earnings per share rose 36% to $3 per share. The results of this quarter were quite well balanced, driven by both stronger fuel margin and higher inside sales volumes and profits than a year ago. We also recently announced an agreement for the largest acquisition in our company's history. I'll discuss the Buchanan Energy acquisition a little later, but suffice it to say that we believe it will be a tremendous strategic fit, and we look forward to welcoming the Bucky stores and their employees to the Casey's family. Our innovation around digital guest engagement is expanding as we continue to add members to Casey's Rewards, and we're beginning to use it to affect consumer behavior. Finally, our board voted to raise the dividend at the December meeting as a sign of confidence and optimism for our future. I would now like to go over our results and share some of our details in each of the categories. During the second quarter, we continued to experience a favorable fuel margin environment. Fuel gross profit was up 45% compared to the prior year, with a fuel margin of $0.353 per gallon. Same-store gallons sold were down 8.6% compared to prior year due to continued traffic disruption from the pandemic, though we did see sequential improvement from the first quarter. The average retail price of fuel during this period was $2.07 a gallon compared to $2.47 a year ago. Total gallons sold for the quarter were down 6%, to 578 million gallons. Our fuel team continues to do a great job driving performance and we're pleased with our fuel results relative to the industry and publicly available information. The team is using real-time data to drive pricing decisions and has been incredibly successful at maximizing gross profit dollars at our stores. With respect to fuel procurement, we currently have 64% of our gallons under contract near our optimal levels. Our free card program has over 8,600 accounts. With over 21,000 active cards in the market, our commercial business now represents approximately 11% of our total gallons. Same store inside sales were up 3.5% for the quarter, with an average margin of 41%. The company experienced sequential sales improvement of 400 basis points versus the first quarter. Like the first quarter, We continue to see larger basket size more than offset the lower inside guest traffic. The grocery and other merchandise category continues to shine, with same store sales up 6.6% for the quarter and an average margin of 33.3%. Beer and alcohol continue to perform well. We've also experienced growth in both packaged beverages and tobacco due to larger pack size demand, higher Marlboro loyalty redemptions, and improved in-store executions. Total prepared food and fountain sales were down 3% to $289 million in the second quarter. Same store sales were down 3.6%. The average margin for the quarter was 60.1% versus 60.9% from a year ago. We had sequential sales improvement of 620 basis points versus the first quarter, and our margins improved sequentially as well. That being said, This area of our business continues to be the one most impacted by lower guest counts from the pandemic, especially in the morning day part where many of our guests continue to work from home or deal with virtual schooling arrangements. Bakery and dispense beverages, especially coffee, are the categories most adversely impacted, though both showed volume improvements versus first quarter. Conversely, whole pies are continuing to perform exceptionally well, with units up 17% compared to the same quarter a year ago Aided in part by our digital efforts. Digital sales are up 127% and make up over 50% of total whole pie orders. I would now like to turn the call over to Steve to go into some details on the financial statements.